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China’s Supreme People’s Procuratorate Releases the 48th Batch of Guiding Cases Focusing on IP

On September 14, 2023, the Supreme People’s Procuratorate (SPP) released the 48th batch of guiding cases (关于印发最高人民检察院 第四十八批指导性案例的通知). This batch include 4 cases (Prosecution Cases No. 191-194) with the theme of “Comprehensive Procuratorial Protection of Intellectual Property Rights.”  The cases yielded significant prison sentences for copyright infringement and false copyright litigation.

Guangzhou Mona Lisa Building Materials Co., Ltd., Guangzhou Mona Lisa Sanitary Ware Co., Ltd. and the China National Intellectual Property Administration trademark dispute administrative dispute litigation supervision case

(Case No. 191)

This case involved trademarks for Mona Lisa. 

Both litigants were dissatisfied with an appeal decision made by the Beijing Higher People’s Court after a long and complicated dispute that started in 2012.  Accordingly, even though not a criminal case, the litigants applied for “supervision” from the Beijing Municipal People’s Procuratorate, which eventually led to a retrial.

The SPP explained, in part,

On November 11, 2021, the Supreme People’s Procuratorate lodged a protest with the Supreme People’s Court, believing that the second-instance judgment in this case contained errors in the determination of facts and application of law. The main reason is that the “bathroom (water closet), toilet” products approved for use in the disputed trademark and the “bathroom fixtures” products approved for use in the cited trademark constitute similar products. The disputed trademark and the cited trademark are similar in terms of text composition, name, constituent elements, etc., and constitute similar trademarks….The Supreme People’s Court ordered the Beijing Higher People’s Court to retry the case. On June 14, 2022, the Beijing Higher People’s Court made a judgment that the disputed trademark and the cited trademark constitute similar trademarks used on similar goods…The Beijing Higher People’s Court revised the verdict after retrial and revoked the second-instance judgment and the first-instance judgment in this case.

Zhou XX and Xiang XX and Li XX

Copyright ownership, infringement disputes, etc. series

False litigation supervision case

(Case No. 192)

Since 2008, Hangzhou Meisu Copyright Agency Co., Ltd. has illegally induced some operators in the China Textile City Market in Keqiao, Shaoxing to hand over textile patterns created by others to the company for copyright registration and entrusted the company to protect their rights. Even though Zhou Furen knew that his client did not have the actual copyright, he still instructed Wang Jiangmei and others to make up ideas and instructions for pattern creation, and advanced the creation date one year to help register the copyright as an agent. After discovering that other operators in the market were using this part of the pattern, Meisu Company, under the guise of safeguarding rights, demanded compensation by sending an attorney warning letter and filing a lawsuit on the grounds of infringement of its customer’s copyright. The total amount of fraud amounted to more than RMB 3.4 million. Among them, 64 false lawsuits were involved, and the copyright ownership and infringement dispute case between Zhou XX and Xiang XX and Li XX was one of them.

Prosecutors visit textile market merchants

On September 26, 2022, the Shaoxing Municipal People’s Procuratorate lodged a protest with the Shaoxing Municipal Intermediate People’s Court regarding one case, believing that Zhou XX did not enjoy the copyright to the pattern being litigated, and that he filed the lawsuit by pretending to be the author, and that he had fabricated the facts to file the lawsuit thereby obstructing the judicial order, harming the legitimate rights and interests of others, and constituting a false lawsuit. At the same time, the Shaoxing Municipal People’s Procuratorate lodged a protest against another 11 false lawsuits with similar circumstances, and the Zhejiang Provincial People’s Procuratorate also lodged a protest with the Zhejiang Provincial Higher People’s Court in two cases. Previously, the Keqiao District Procuratorate had issued retrial prosecutorial recommendations to the Keqiao District Court on 50 cases involving false lawsuits on April 28, 2022.

The Shaoxing Intermediate People’s Court issued a civil ruling and ordered the Keqiao District Court to retry the case. On November 28, 2022, the Keqiao District Court issued a civil judgment (2022)浙0603民再67号 adopting the protest opinions of the procuratorial organs, determining that it constituted a false lawsuit, and ruled to revoke the original judgment and reject Zhou’s lawsuit. Retrials for the remaining 63 cases led to conclusions they too constituting false litigation, and the verdicts were changed to reject the plaintiff’s claims in the original trial.

From August to November 2021, the Keqiao District Procuratorate approved the arrest of Zhou, Chen, Yan , Wang and others for fraud. On April 21, 2022, Yang and Wang were released on bail pending trial. On May 5, 2022, the Keqiao District Procuratorate began prosecution in Keqiao District Court against the defendants Zhou, Chen, Yang, and Wang for fraud.

On July 28, 2022, the Keqiao District Court made a first-instance judgment and sentenced the defendant Zhou to 11 years and six months in prison for fraud and a fine of RMB 200,000; sentenced the defendant Chen to three years in prison. year, suspended for five years and fined RMB 80,000; the defendant Yang was sentenced to three years in prison, suspended for five years, and fined RMB 20,000; the defendant Wang was sentenced to three years in prison, suspended for four years, and a fine of RMB 10,000. Further, tools used during the commissioning of crimes were also forfeited including computers, mobile phones and other tools, and the defendants were ordered to jointly compensate the victims for their losses. Zhou, Chen, Yang and Wang appealed. On September 13, 2022, the Shaoxing Intermediate People’s Court ruled to reject the appeal and uphold the original verdict.

The SPP stated,

Pretending to be an author, using works created by others to defraud copyright registration, and using this as the main evidence to file a lawsuit to seek illegitimate benefits, harming the legitimate rights and interests of others and obstructing judicial order, constitutes a false lawsuit.As a preliminary proof of copyright ownership, the copyright registration certificate is one of the most common evidences in copyright ownership and infringement disputes. However, when registering copyright, there is no substantive examination of whether the relevant work was created by the applicant and whether it is original. Objectively, it is difficult to prevent malicious registration of copyright. Deliberately submitting false application materials to defraud copyright registration for other people’s works or works in the public domain, and then using the fraudulent copyright registration certificate to file a lawsuit to seek illegitimate benefits, is a relatively typical false lawsuit in the field of intellectual property. When procuratorial organs handle cases of civil litigation supervision of copyright ownership and infringement disputes, in addition to reviewing the copyright registration certificate, they should also focus on reviewing the creative manuscripts, originals and other evidentiary materials, and investigate and verify whether the work was created by someone else and whether the creation was completed as stated in the registration certificate. 

Liang XX, Wang XX and fifteen others

Copyright infringement case

( Case No. 193)

In 2018 Liang established Wuhan Chain World Technology Co., Ltd. and Wuhan Kuaiyixing Technology Co., Ltd., instructing Wang to hire Wan Mengjun and others to develop and operate the “Renren Film and Television Subtitle Group” website. Liang also hired Xie and others to organize translators to download unauthorized film and television works from overseas websites, translate, produce, and upload them to relevant servers, and provide users with services through the “Renren Film and Television Subtitle Group” website. After investigation it was determined that there were 32,824 unauthorized film and television works on the “Renren Film and Television Subtitle Group” website and related clients, with a total of more than 6.83 million members. From January 2018 to January 2021, the illegal revenue totaled more than 12 million RMB, including more than 2.7 million RMB  in membership fees, more than 8.8 million RMB in advertising fees, and more than 1 million RMB  from selling hard drives containing film and television works.

On November 22, 2021, the Shanghai No. 3 Intermediate People’s Court sentenced the defendant Liang to three years and six months in prison for copyright infringement and a fine of RMB 1.5 million. The defendant Wang Zhenghang and 14 other accomplices were sentenced to fixed-term imprisonment ranging from one year and six months to three years, with probation applicable, and fines ranging from RMB 40,000 to RMB 350,000. After the first-instance verdict, none of the 15 defendants appealed.

A company in Shanghai, Xu XX, Tao XX

Copyright infringement case

(Case No. 194)

A Shanghai company was founded in 2003. In 2016, Tao, as a salesperson of  Shanghai company, found that a company in Nanjing had a large sales volume of C-chips and a high market share, so he obtained genuine C-chips from the market for replication. Xu, as the general manager of the Shanghai company, was responsible for the company’s production and operation and other matters. Knowing that  Shanghai company did not have the authorization of the Nanjing company, he entrusted other companies to crack the C-chip, extract GDS files (graphic data system, an industrial standard data file for integrated circuit chips, which records the chip layer, layer inside the plane geometry, text label and other information), and then organize the production mask tools, wafers and packaging. The Shanghai company then sold G-chips, seeking illegal profits.

From September 2016 to December 2019, the Shanghai company sold a total of more than 8.3 million G-type chips, and the illegal revenue was more than RMB 7.3 million.  Among them, Tao sold more than 7.8 million infringing chips, with an illegal business revenue of more than RMB 6.8 million.

On July 14, 2021, the Yuhuatai District Court sentenced the defendant, the Shanghai company, to a fine of RMB 4 million for the crime of copyright infringement; sentenced the defendant Xu to four years in prison and a fine of RMB 360,000; sentenced the defendant Tao Wei  to three years and two months in prison and fined RMB 100,000. The defendants appealed. On October 28, 2021, the Nanjing Intermediate People’s Court ruled to reject the appeal and uphold the original judgment.

The full original text is available here (Chinese only).

Principal, and Director of China Intellectual Property Practice

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