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Newsletter on the latest IP developments about China

altChina’s Grass-roots Courts to Handle Patent Dispute

Cases

Recently, more and more grass-roots courts will be allowed to hear patent lawsuits in response to an increasing number of intellectual property disputes in China. A judicial interpretation released recently states that the Supreme People’s Court may, depending on actual circumstances, designate grassroots people’s courts to exercise jurisdiction over firstinstance trials of patent dispute cases.

Restricting the jurisdiction of patent lawsuits to the intermediate and higher people’s courts had played a vital role in standardizing judicial rulings and nurturing specialized judges inthe early days of civil patent rulings, when the number of such cases was small, and judicial expertise and experience hearing these cases was limited, according to a statement released by the Supreme People’s Court on its website. However, with the soaring number of patent disputes in recent years, there have been growing calls to expand the number of grass-roots courts holding jurisdiction over intellectual property case.

Song Yushui, vice president of Beijing’s Haidian District Court, said it is time to allow more judges from grassroots courts to get involved in hearing patent cases and shoulder part of the workload. The Haidian court was one of the three pilot grassroots courts approved by the Supreme People’s Court to hear patent disputes in 2009. Song said, the new stipulation will make patent ruling more efficient and reduce the cost for the public to file such cases, so it will aid in the protection of IP rights in the long run.

In 2012, courts at all levels in the country heard and closed nearly 237,800 civil litigation cases regarding Intellectual Property rights, up over 37 percent year-on-year.

Patent Infringement Dispute on CDMA/GSM Double-mode Mobile Communication Method

Top Ten Chinese Intellectual Property Cases of 2012″ issued by the Supreme People’s Court in late April, 2013, and the case of Zhejiang Holley Telecommunication Group Co. Ltd(hereafter “Holly”) vs. Shenzhen Samsung KejianMobile Technology Co., (hereinafter “Samsung”) was on the list, our firm, entrusted by the defendant Samsung, helped Samsung win the case.

Holley is an exclusive licensee of the patent “ZL02101734.4, entitled CDMA/GSM double-model mobile communication method and equipment”, and Holley alleged that the SCH-W579 cell phone, manufactured by Samsung infringed Holley’s ZL02101734.4 patent, and requested the court order Samsung to stop producing and selling the product and compensate for an economic loss of RMB 50 million to Holley. The first instance court handed down a decision in favor of Holley. After losing the case in the first instance, Samsung entrusted our firm to handle the second instance hearing as well as first instance, second instance and appeal proceedings of subsequent administrative litigation. We fully investigated the details of the whole case, and developed elaborate coping strategies for Samsung, and in response, submitted a request for declaration of invalidity to this patent during the second instance of in-fringement litigation. Finally, we got a rolling victory in the administrative litigation and effectively safeguarded the interests of Samsung. The ZL02101734.4 patent was announced invalid as a whole.

[Significance]

This case is the first one in which an internationally-renowned cell phone manufacturer is sued by its Chinese counterpart for patent infringement,  and the first instance judgment reached a compensation amount as high as RMB 50 million, which has received extensive attention at home and abroad. The Second-instance court actively guides each party to collect and question the evidences, adopts reasonable comparison methods, encourages each party to invite technical experts to explain technical problems, utilizes fact-finding mechanisms such as technical appraisals, and tries the best to apply relevant laws accurately. As a result, the second instance changes the original sentence and rejects all the lawsuit requests, which equally protects the legal rights and interests of all parties, and constructs a fairly competitive market environment.

Resources from: Website of  Supreme People’s Court

Baidu Wins Lawsuit against Qihoo 360

Baidu, the world’s largest Chinese search engine sued Chinese online security software developer Qihoo 360 for unfair competition, Beijing No. 1 Intermediate People’s Court issued a ruling on April 27, 2013, and asked Qihoo 360 to cease all unfair com petition and related activities, feature an apology to Baidu on its homepage for a span of 15 days, and pay RMB 450,000 in damages. Causes of lawsuit are that: 1. Qihoo 360 forcibly distorts Baidu search result page to cause confusions; 2. Qihoo 360 deliberately counterfeits and confuses search results, intercepts Baidu traffic, infringes the plaintiff’s trademark right, and competes unfairly.

Besides, the case sued by Tencent against Qihoo 360’s QGuard for unfair competition was ruled for the first instance on April 25, 2013,  and  the  High  People’s  Court  in Guangdong province issued a ruling that Tencent won the case. The court decided that, Qihoo 360 should pay RMB 5 million for economic losses and reasonable legal costs and other expenses, feature an apol-ogy to Tencent for a span of 15 days on highlight places of websites and newspapers, including but not limited to, Qihoo 360’s  official  website,  Sina,  Sohu, Netease, Legal Daily, and China Intellectual Property News, to eliminate ill effects. This has been the largest compensation in China’s Internet industry, as well as the heaviest sentence for unfair competition in China.

State  Council  Revises Copyright Rules

State Council recently issued the decision on modifying the Copyright Law Implementation Regulations, Regulations for the Protection of Information Network Transmission Rights, Protection of Computer Software  Regulations, strengthening  the administrative sanctions on infringements against copyright. Anyone who provides others’ works through the network shall have to obtain permission otherwise will be punished by the law. Infringing acts with illegal business revenue shall be liable to a fine of 3 to 5 times as much as the entire illegal business revenue. Infringing acts without illegal business revenue or less than RMB 50,000 shall be liable to a fine rising from RMB 100,000 to 250,000.

According to the revised Copyright Law Implementation Regulations, infringing acts given by the copyright law shall be liable to the administrative sanctions to be imposed by copyright administrative authority. The amount of the fine to be imposed for infringements against copyright shall be depending on situation of each  case.  Unlawful  gains  amounted  to RMB50, 000 shall be liable to a fine of 1 to 5 times as much as the entire illegal business revenue. Acts without unlawful gains or gains less than RMB 50,000 shall be liable to a fine of RMB 250,000.

According to the revised Regulations for the Protection of Information Network Transmission Rights, Unlawful gains amounted to RMB 50,000 shall be liable to a fine of 1 to 5 times as much as the entire illegal business revenue. Acts without unlawful gains or gains less than RMB 50,000 shall be liable to a fine less than RMB 250,000.

According to the Protection of Computer Software Regulations, infringements against copyright shall be liable to the administrative sanctions imposed by copyright administrative authority in the form of injunction in relation to the production and distribution of infringing copies, confiscation of unlawful gains and seizure of infringing copies and equipment used for making infringing copies, as well as fine.

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