Civil IP litigation statistics in China

China is famous for its enthusiastic production of statistics and IP is no exception. Chinese civil court IP cases are often touted as evidence of the growing sophistication of the Chinese IP legal system. Below are some published numbers for civil IP cases:

Year - No. of IP cases
2006 - 16,708
2007 - 20,265
2008 - 28,217
2009 - 36,001

The latest release of data states that civil IPR cases jumped nearly 40% last year; specifically in the first 11 months of 2010, the courts heard 32,748 first instance IP disputes. Go back to the early 2000s and the number was just a few thousand. At that level it is the largest civil IP docket in the world. There are probably more patent trials than in Germany or the US now.

In contrast IP Komodo’s home in Indonesia hears around 100 civil IP cases a year at first instance. The renowned specialist CIPIT court in Thailand published that its 2009 docket was 321 civil IP cases. Why is China for far ahead? Some say it’s the enthusiastic use of the courts by local PRC companies.

But IP Komodo has spotted something which calls into question how to interpret these numbers. In a recent Hangzhou Intermediate People's Court copyright case Beijing News alleged that Zhejiang Online had copied over 7700 articles without authorization on its website. The court asked the plaintiff Beijing News to separate the matter into individual 'cases' based on the number of articles copied. The plaintiff would have to file 7700 separate 'cases' for the dispute! It is quite common for some PRC courts to require separation of claims into separate 'cases' in court because it involves different rights, whereas in other countries multiple claims and infringing acts can be combined in the same action. And Judges have an incentive to increase the number of 'cases' as it is one of the elements in their performance appraisal. Esteemed PRC former Judge Zhang Zhipei was critical of the Hangzhou court’s decision in the news reports. While no doubt China has become one of most IP litigious countries, the calculation of numbers of 'cases' may not necessarily match the actual number of disputes.

Guest post by IP Komodo Dragon

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LOIYIR Must Stop Using L'Oréal's Chinese Name and Claiming It's Part of L'Oréal

Already in 2007 there was some confusion among consumers, see the question at Ask Koubei here:

Question: "LOIYIR 是 L'Oréal 的产品吗?" translation: LOIYIR is L'Oréal's product?
Answer: "不是." Translation: no

The confusion was created by Hangzhou LOIYIR Cosmetics and Shanghai Meilianni Cosmetics that used the Chinese name of L'Oréal 欧莱雅 and claimed that LOIYIR's products are from L'Oréal.

Finally in 2009, the case was brought before the Nantong (Jiangsu province) Intermediate People's Court (first-instance judgement). From 1981 to 2001, L'Oréal registered the trademarks L'Oréal, 莱雅 and 欧莱雅, certified to be used on Class 3 goods, i.e. cosmetics, beauty products and perfumes.

The Nantong Intermediate People's Court judged:

- the joint distribution of LOIYIR products by the co-defendants constituted trademark infringement, they have to indemnify L'Oréal by paying jointly 400,000 Renminbi in damages;

- Hangzhou LOIYIR used 欧莱雅 in its trade name, which constituted unfair competition; therefore they have to pay another 100,000 Renminbi in damages.

However, LOIYIR still uses 欧莱雅 in its trade name, see its website here. Maybe they will appeal the judgement.

Source: China IP News

See China Law Edu (Chinese).

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Bust of an Allegedly Pirated DVD Vendor in Hangzhou Night Market: Show or for Real?

A certain msmakara witnessed, recorded it and uploaded a video on YouTube of Hangzhou police who bust an alleged pirated DVD vendor in June 9, 2007. See here.

msmakara wrote as an introduction to the video:
"As I was walking through the market, I heard someone yell out something very loudly. After this, all of the vendors went crazy rushing to hide all of their apparently counterfeit goods. It was a little scary being in the middle of it all--it was a complete frenzy, and I could tell all the vendors were really scared. This video doesn't quite capture the chaotic feeling of the market but they might give you a hint. At first I was surprised that the police allowed me to film them up close. But then I realized that they probably want to show Westerners that they are enforcing their IP laws."

In the end of the video you see the following text:
"New Chinese law states that anyone found with 500 or more counterfeit a/v products can be imprisoned for up to 7 years and fined from one to 15 times the illegal earnings, or from 50 to 200 percent of the business turnover."

Msmakara refers to the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues in the Concrete Application of the Law in Handling Criminal Cases of Intellectual Property Infringement, that went into effect April 5, 2007.

Article 1: “where for profit-making purposes and without the permission of the copyright owner there is reproduction and distribution of a literary work, a musical, cinematographic, television, or video recording work, computer software or other works, and the total quantity of reproductions is 500 units or more, this shall constitute “other serious circumstances” pursuant tot Article 217 of the Criminal Code; where the total quantiy of reproductions is 2500 units or more, this shall constitute “other exceptionally serious circumstances” under Article 217 of the Criminal Code.”

According to Article 217 Criminal Law: “when there are other serious circumstances, the violator is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine; when the amount of the illicit income is huge or when there are other particularly serious circumstances, he is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine.”

Source:TidyTent Intellectual Property Law Firm, see here.

With the last text sentence in the video Msmakara makes clear there is not room for the thought that this raid constituted an effective deterrent:
"Within minutes, the vendors in the market began selling their counterfeit products again."

The question is what happens in reality with the DVD vendor. Will he be back selling his products again the next day or will he really be sanctioned. In other words, was it all a show for public foreign consumption? Is seems that in this case the police took action, but lukewarmly and the pirated DVD vendors felt relatively safe, because they are with many and the police probably only wanted single out one vendor of allegedly pirated DVDs to set an example.

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