Chinese Courts Get Tough on Copycats

A brand can take years to build, but just days to be copied. Chateau Lafite found itself in such a situation in 2015.


The French winemaker discovered that a Shanghai-based firm had been importing and selling wine labeled Chateau Moron Lafitte, similar to its own registered trademark Lafite.


In order to remedy what it saw as a blatant trademark infringement, Chateau Lafite turned to the Shanghai Intellectual Property Court.


In February this year, the court ordered the Shanghai-based company to stop its trademark infringement and compensate Chateau Lafite to the tune of 2 million yuan ($317,000).


"We are glad to see China is working to set up a great IP system and to equally protect rights of brands from China and abroad," said Jean-Guillaume Prats, CEO of Les Domaines Barons de Rothschild (Chateau Lafite), at a recent meeting.


From 2014 to 2017, Shanghai courts received 1,244 and concluded 1,219 civil first instance IP cases involving foreign parties, accounting for 3.3 percent of total civil IP cases handled.


Yang Jing, deputy director of the administration office of the Beijing IP Court, said, "IPR trials create fair market competition for both Chinese and foreign companies."


In 2017, Chinese courts concluded more than 200,000 IPR cases, increasing 40 percent year-on-year, according to the Supreme People's Court.


"China is increasingly using legal tools to help stimulate innovation," said Yang Boyong, chief judge of a tribunal in the Beijing High People's Court.


In recent years, compensation for IPR violation has been set to match the market value of the IP, sometimes breaking the statutory upper limit provided in related laws, according to Yang.


"Violators should pay the price they deserve," he said.


In a series of typical IPR cases the Beijing court announced in late April, two tech companies violating a software patent were required to pay compensation of 3 million yuan, higher than the 1 million statutory compensation cap stipulated by China's patent law.


The court passed its judgment based on the fact that the profit the two companies made from illegally using the software had far exceeded 1 million yuan.


In another case involving German software corporation SAP SE, handled by the Shanghai IP court, the judge decided that a Chinese training agency had used SAP SE software and textbooks for commercial purposes without authorization.


The compensation was set at 1.55 million yuan, higher than 500,000 yuan, the statutory upper limit for compensation provided in copyright law.


"We are very impressed with the Shanghai IP Court's unbiased respect for a multinational company's IPR, as well as the determination to protect IPR in China," said Karen Williams, vice-president of SAP's anti-piracy department, in a letter of gratitude to the court.


Lawmakers in China are modifying IPR protection laws to raise the compensation cap.


"The State Intellectual Property Office will actively push to raise the compensation limit, and introduce penalties to significantly raise the violation costs," said Shen Changyu, commissioner of SIPO.



Source: Xinhua