China: Selected Guiding Cases

Guiding Cases

  • China is traditionally aligned with civil law system, but in recent years the Supreme People's Courts (SPC) have complied and published over a hundred guiding cases aimed at standardizing legal practice and forming a uniform criterion in adjudication.
  • Of all 112 guiding cases issued by SPC, 20 are IP cases.

Definition of Guiding Case

  • Guiding Cases in China refer to the cases compiled and published as Guiding Cases by SPC and the rulings or judgments in these cases have already come into legal effect. The Guiding cases have tackled complicated legal issues and can be cited in similar cases

Legal effect of Guiding Cases

  • According to Implementing Rules of the "Provisions on Guiding Cases issued by the SPC,
    • Where a case being adjudicated is, in terms of the basic facts and application of law, similar to a Guiding Case released by the Supreme People's Court, the People's Courts at any level should refer to the relevant Guiding Case to render its rulings or judgments.
    • Where the People's Courts at any level cite a Guiding Case when adjudicating a similar case, it should explain the reason for citing the Guiding Case in its adjudication.

Typical Cases and Reference Cases

  • Other than Guiding Cases, the SPC and the Courts at all levels regularly issues Typical Cases or Reference Cases. Unlike the Guiding Cases, the rulings and judgments in the Typical Cases or Reference Cases are not binding and they are supposed to provide reference.

Interpretation of "well-known commodity" in PRC Anti-Unfair Competition Law

Guiding Case No. 47

Ferrero International S.A., Italy ( 意 大利费列罗公司 ) v. Montresor (Zhangjiagang) Food Co., Ltd. ( 蒙 特莎(张家港)食品有限公司 ) and Zhengyuan Marketing Co., Ltd., Tianjin Economic-Technological Development Area ( 天津经济技 术开发区正元行销有限公司 ), An Unfair Competition Dispute

1. The term "well-known commodity/ service" as used in the AntiUnfair Competition Law refers to a commodity/service that has a certain degree of reputation in the market within the territory of China and is known to the relevant public. China protects the distinctive product name, packaging or decoration of the wellknown commodity according to the Anti-Unfair Competition Law, provided that the commodity is well-known to the relevant public within the territory of China. Therefore, in order to determine whether an internationally known commodity is a well-known commodity and can be protected in the Anti-Unfair Competition Law, the court should take various factors into consideration, such as the sales period, sales regions, sales volume, and sales targets of that commodity within the territory of China, as well as the duration, extent and geographical scope of advertisement and promotion that has been carried out for the commodity/services in dispute and the Court should also give appropriate consideration to the reputation of the commodity outside China.

2. The distinctive product name, packaging or decoration of the well-known commodity protected by the Anti-Unfair Competition Law are product name, packaging or decoration of the well-known commodity distinctive enough to distinguish the origin of the commodity.

While it is common practice that one can resort to unfair-competition law for legal protection against copycats when trademark registration was absent, it remains a legal obstacle for foreign IP right holder as to how to meet the criteria set out by the Chinese UnfairCompetition Law for such protection, particularly when facing an adversary which has achieved certain market influence.

Such a problem was addressed and showcased in the Guiding Case No. 47, where the Ferrero chocolates were subject to a controversy between different courts as to how to define "well-known commodity" ( 知名商品 , revised to "commodity with certain influence"( 有一定影响的商品 ) in Chinese Anti-Unfair Competition Law, 2018).

In this case, the plaintiff Ferrero Company encountered the problem of imitation of its Ferrero Rocher chocolate (Chinese name JIN SHA ( 金 莎 ) in Hongkong and Taiwan).

The Plaintiff obtained the registration of the trademark "FERRERO ROCHER" in Latin in 1986, but it did not file the trademark "FERRERO ROCHER" in Chinese " 金莎 " ( pronounced as JIN SHA in Chinese). In 1991, a dairy factory in Zhangjiagang City, Jiangsu Province, China registered the Chinese trademark " 金莎 " on chocolate etc. and transferred the Chinese trademark " 金莎 " to the defendant Montresor Company in 2002. The dairy factory and the Defendant had been producing and selling chocolates named as " 金莎 " (JIN SHA) / " 金 莎 TRESOR DORE" with the trade dress similar to that of the Plaintiff.

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