IP Litigation

IP Litigation:

We have extensive experience of IP litigation.

Our litigation experience includes:

  • patent infringement litigation
  • trade mark infringement litigation
  • copyright infringement litigation
  • trade secret litigation
  • trade name, product packaging and design protection etc., unfair competition civil litigation
  • domain name dispute litigation
  • anti-monopoly/antitrust litigation

IP litigation Case:

In 2018, Lusheng represented a toy manufacturer in appealing against a Shantou Chenghai toy factory regarding a copyright infringement of a robot dog toy. The Appellate Court completely overruled the first instance judgement.

The first instance judgement concluded that although the overall structure of the accused product is similar to the copyright product, it was inspired by a natural dog, and the overall structure of a dog is public material and therefore not protected under copyright law. Moreover, the joints and sphere-shape paws were functional, which should be identified as a “technical expression”, belonging to the “idea”, and therefore cannot enjoy copyright protection. The parts of the accused product had obvious differences with the copyright product and the Court therefore rejected the plaintiff’s claims.

The second instance judgement completely overruled the opinions of the first instance judgement. In particular, the judgement made a breakthrough on the problem of whether the functional elements can enjoy copyright. It identified the principal of “expression limitation”.

That is, the higher the expression limitation attributable to the functional design, the smaller the space for creating, choosing, and arranging the design, i.e. the lower the creativity is. On the contrary, the lower the expression limitation, the bigger the space for creating, choosing, and arranging the design Therefore, the form and content of the expression of idea can be more specific and richer, and the distinction between idea and the expression is clearer and easier to strip.

Based on this, the second instance judgment concluded that the accused product was substantially similar to the copyright product. Based on the evidence submitted by the plaintiff, the Court determined statutory compensation to be RMB 50,000, the maximum amount possible.

IP Litigation Case 2:

New Balance Athletics is a US sportswear company. Its brand is well-known for its signature slanting “N” logo on both sides of its sneakers. The Defendant, New Boom, used similar "NB" and "N" logos on their sneakers and was sued by New Balance for trade mark infringement and unfair competition. New Balance applied for an interim injunction on the Defendants (including producers, sellers and controllers) to stop the production and sale of shoes with the logo “N” and "NB". The Defendants did not promptly implement the injunction and a judicial fine of RMB 1.7 million (US$256,000) was imposed, which is likely the highest judicial fine imposed in an IP civil action to date in mainland China.  

In China, the courts normally grant statutory damages not exceeding RMB 3 million in trade mark infringement and unfair competition civil actions. In this case, New Balance advocated to have the amount of compensation calculated on its losses from the infringement. As a result of the evidence New Balance submitted, the Court granted compensation totalling RMB 10.15 million, including attorney fees of RMB 800,000. This complicated case has gone through several rounds of evidence exchange and hearings. Rouse focused considerable effort on this case and provided a detailed 16-page statement to the Court arguing for awards in excess of the maximum allowable. The case garnered significant press coverage from both the specialised IP media and international news outlets such as the New York Times and the BBC.

IP litigation Case 3:

Crocs are a company that distribute a distinctive and comfortable foam clog shoe in a range of colors. In 2009, CROCS discovered that the Defendants, JSK (owning the brand "COQUI"), were engaged in the manufacture and sale of the products imitating the designs of CROCS shoes.  In addition, JSK had also copied the trade name of CROCS in China (KA LUO CHI), as well as the whole business model, including websites, advertisements and PR releases, cartoon images, store designs etc.  Furthermore, it marketed its products aggressively, not only organizing public events to advertise and display the infringing products, but also building up several companies across China and exporting overseas. Given the bad faith and negative impact caused by the blatant imitation by JSK, CROCS filed litigation in 2013 based on the Anti-Unfair Competition Law. The case involved a comprehensive scope, and to take the elements separately there would be a separate copyright case, trade mark case, design patent case, anti-unfair competition case etc. Rouse brought all these together under the umbrella of Anti-Unfair Competition Law.

The Court found JSK infringed by passing off the unique shoe designs of CROCS, using CROCS' Chinese trade name, and false advertising to create an association with CROCS. They ordered JSK to stop the infringement, pay compensation amounting to RMB 630,000 and make public announcements in newspapers to eliminate the negative effect caused by the infringement (not often seen in IP infringement cases). In addition, the Court also found joint liability of the representative of the JSK companies, who should personally bear joint liability for a portion of the compensation awarded to CROCS.

SPC and Shanghai Higher Court selected this case as one of the leading cases, considering that:

  • It involved CROCS, an international leading brand, which is very reputable in China.
  • It involved the anti-unfair competition protection for product shape design (as special "product decorations" under the Anti-Unfair Competition Law). This is very rare in practice. Usually the "product decorations" would more refer to 2D decorations of the product, rather than the shape design per se. The standard to protect shape design under the Anti-Unfair Competition Law as "product decorations" is very high. Furthermore, there are a number of different shoes involved in the case, it is a challenging issue whether and how to protect them. Usually in anti-unfair competition case for product decorations, the Court would look into each of the products and evaluate them individually. The Court has taken a breakthrough step to extract most of the unique features shared by all the shoes involved, and to recognise the "unique designs" of CROCS. This provides important guidance to future practice.
  • It involved a variety of trade elements, not only the appearance of the shoes, but also the trade name, other trade dress elements etc. It has significant value in how to analyse all these elements and evaluate whether to grant protection under the Anti-Unfair Competition Law.

On the whole, the courts took this judgment as a meaningful guide to regulate the activities of using, taking reference of other's commercial elements, and to facilitate a healthy and competitive market.