On September 14, 2023, China’s Supreme People’s Court (SPC) released the 2023 People’s Courts Typical Anti-Monopoly and Anti-Unfair Competition Cases (2023年人民法院反垄断和反不正当竞争典型案例) in conjunction with the 2023 China Fair Competition Policy Publicity Week. A total of 10 typical cases were released this time, including 5 typical anti-monopoly cases and 5 typical anti-unfair competition cases. A translation of the IP-related case case summaries from the SPC follows.
6. Case on Disputes over Counterfeiting and Confusion of “Siemens” — Determination of Counterfeiting and Confusion
[Case No. 最高人民法院（2022）最高法民终312号〔西门子股份公司、西门子（中国）有限公司与宁波奇帅电器有限公司、昆山新维创电器有限公司等侵害商标权及不正当竞争纠纷案〕
[Basic Facts] The registered trademark “Siemens” as approved and registered on washing machine products at issue is the exclusive right of Siemens Joint Stock Company (“Siemens”) and Siemens (China) Co., Ltd. (“Siemens China Company”), and has a high reputation after long-term use. The brand name “Siemens” of Siemens AG and Siemens China AG also had a certain impact. Ningbo Qishuai Electric Appliances Co., Ltd. (hereinafter referred to as “Qishuai Company”) used the logo of “Shanghai Siemens Electric Appliances Co., Ltd.” in the production and sale of washing machine products, product packaging and relevant publicity activities, while Kunshan Xinweichuang Electric Appliances Co., Ltd. (hereinafter referred to as “Xinweichuang Company”), a sole proprietorship, sold the aforesaid alleged infringing products. Siemens Corporation and Siemens China Corporation filed this action on the ground that the aforesaid acts of Qishuai Company and Xinweichuang Company had infringed upon their exclusive right to use registered trademarks and constituted unfair competition, and requested compensation of 100 million RMB for economic losses and 163,000 RMB for reasonable expenses. The Higher People’s Court of Jiangsu Province held in the trial of first instance that the acts of Qishuai Company and Xinweichuang Company constituted trademark infringement and unfair competition, and fully supported the compensation claims of Siemens AG and Siemens China. Qishuai Company appealed.
After a second-instance hearing, the Supreme People’s Court held that Qishuai Company’s use of “Shanghai Siemens Electric Appliance Co., Ltd.” in washing machines, commodity packaging and publicity activities constituted trademark infringement of Siemens’ rights and unfair competition as prescribed in items (2) and (4) of Article 6 of the Anti-unfair Competition Law. Considering that Qishuai Company refused to provide the financial materials related to the infringement in the litigation, it was not improper for the court of first instance to take media coverage as the basis for calculating the total sales amount, and calculate the proportion of sales amount of the allegedly infringing products on the basis of 15%, and then determine the amount of damages. Although the existing evidence could not prove the profits from the infringement and the losses from the infringement, it was sufficient to determine that Qishuai Company’s benefits from the production and sale of the alleged infringing products obviously exceeded the statutory maximum amount of compensation as prescribed in paragraph 4 of Article 17 of the Anti-unfair Competition Law. Considering that the enterprise names of Siemens have relatively high popularity, Qishuai Company had obvious subjective malice, the scale of infringement, the duration of infringement, and in consideration of the profit margin of washing machine products and other factors, the amount of compensation determined in the trial of first instance was not inappropriate. After the second-instance judgment of the Supreme People’s Court, the appeal was dismissed and the original judgment was sustained.
[Significance] This case is a typical case of cracking down on the act of counterfeiting and causing consumer confusion. In this case, the people’s court has determined that the use of a mark which is identical with or similar to the trade name and registered trademark of an enterprise name with a certain level of influence as a trade name and the business operations conducted by the enterprise constitute an act of unfair competition as prescribed in Article 6 of the Anti-Unfair Competition Law. At the same time, under the circumstance that the existing evidence cannot prove the profits from the infringement and the specific amount of actual losses, the people’s court has specified the considerations for determining the amount of compensation. The judgment of this case is of exemplary significance to the determination of confusion, calculation of compensation amount, and other issues concerning the application of law.
7. Dispute over infringement upon trade secret of “general liquid of photostimulated chemiluminescence analysis system” — determination of technical scheme constituting technical secret
[Case No. 最高人民法院（2020）最高法知民终1889号〔科美博阳诊断技术（上海）有限公司与程某、成都爱兴生物科技有限公司侵害技术秘密纠纷案)
[Basic Facts] Kemei Boyang Diagnostic Technology (Shanghai) Co., Ltd. (hereinafter referred to as “Boyang Company”) was a trade secret right holder of “General Liquid of Photostimulated Chemiluminescence Analysis System.” After leaving his post, Cheng, a former employee of Boyang Company, joined Chengdu Aixing Biological Technology Co., Ltd. (hereinafter referred to as “Aixing Company”) and disclosed the aforesaid trade secret to Aixing Company, which then used the aforesaid trade secrets to produce and sell in vitro diagnostic kits. Boyang Company instituted this action on the ground that the aforesaid acts of Cheng and Aixing Company constituted an infringement upon their rights and interests in trade secrets. In the trial of first instance, the Shanghai Intellectual Property Court ordered Cheng and Aixing Company to stop infringing upon the trade secrets involved and jointly compensate Boyang Company 1 million RMB for its economic losses and 300,000 RMB for its reasonable expenses for rights protection. Cheng and Aixing Company appealed.
The Supreme People’s Court held in the second instance that trade secrets are usually embodied in such technical materials as drawings, technical rules, quality standards, operating guidelines, and experimental data, and the trade secret holders prove the existence and content of technical secrets, and generally summarize and extract the trade secret information that needs to be protected on the basis of the documents embodying the trade secrets, and the trade secrets may be either complete technical plans or part of the technical information constituting the technical plans. When summarizing, generalizing or distilling secret information from the documentation such as their technical materials, the holders shall be allowed to combine their confidential information with the prior art and common knowledge to form a complete technical solution for protection. The technical solutions reasonably extracted by the holder from such technical documents as the technical procedures, quality control standards, etc. that are not known to the general public may be protected as trade secrets as long as they are not widely known and easily obtained by the general public. Boyang Company claimed that the eight complete technical plans should be protected as trade secrets. Upon examination, the CV value of fine particles, the particle size and other technical information in the technical documents all have corresponding records. By combining the existing technologies and common knowledge in the field, Boyang Co. could reasonably summarize and extract the aforesaid technical solutions, and may protect them as trade secrets. The Supreme People’s Court, as the court of second instance, dismissed the appeal and sustained the original judgment.
[Significance] This case is a typical case to stop misappropriation of trade secrets. In the trial of a case involving infringement on trade secrets, the trade secrets are unknown to the public, which makes the problem of finding out the contents of trade secrets a difficult problem in judicial practice. In this case, the people’s court has specified that the technical solutions constituting trade secrets claimed by the right holders may be the technical solutions reasonably summarized and extracted on the basis of the technical information recorded in multiple different technical documents and unknown to the public. The judgment of this case has exemplary significance in reasonably allocating the burden of proof for cases involving infringement on trade secrets and effectively enhancing the judicial protection of the legitimate rights and interests of trade secrets.
The full list of cases and summaries is available here (Chinese only).