CHINA VIRTUAL INTELLECTUAL PROPERTY LAW NEWSLETTER
Vol. 1, No. 23 - August 22, 2000
Lehman, Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
(formerly known as the L&A Law Firm)
mail@chinalaw.cc
Contact Our Other Offices:
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Adobe Wins Against Local Software Infringer
Adobe Systems recently sued Shanghai Nianhua Computer Company in Shanghai, claiming that Nianhua illegally used Adobe software in its computers. An investigation of Nianhua revealed that when selling computers to their customers, Nianhua copied software, including Adobe Pagemaker 6.5 and Photoshop, onto a CD. The CD was given to the customer along with the hardware.
The Court recently issued a verdict that required the defendant to cease its infringing activity and compensate Adobe RMB 150,000 for its losses. The copyright theory used in the case involved the "Regulations on Protection of Computer Software," which provides protection for foreign software distributed within China.
Nianhua's chief defense was that they had been instructed to install the software by their clients. However, the court found that Nianhua, as a computer company, was certainly aware of the illegality involved in installing software without the proper licenses. Moreover, there was little if no evidence supporting Nianhua's claim that they had been instructed to install the software and, moreover, the fact that all of the CDs included Pagemaker and Photoshop certainly did not bolster their claim.
P&G Wins in Changsha
Wholesalers of several kinds of counterfeit cleansers and cosmetics in Changsha were recently sentenced to "labor reeducation" for a year and a half. Proctor and Gamble, in conjunction with the Changsha Quality and Technology Supervision Bureau and the Changsha Public Security Bureau, investigated counterfeits at the Gaoqiao Market of Changsha. A large number of counterfeit consumer products of well-known trademarks were found, including some sales records. The manager of one of the stalls, Kang Xide, together with his wife, were taken into custody by authorities on site.
As the investigation progressed, it became clear that Kang Xide was a notorious counterfeiter with a large volume of sales. The reason why Kang Xide had been able to sell his counterfeit products without being discovered was that he was able to successfully destroy accounting books, sales records and other relevant evidence.
The Public Security Bureau requested "labor reeducation" for Kang Xide, which was granted by the Changsha Labor Reeducation Administration Committee for a period of one and a half years. (Source: China Light Industry News)
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SAIC Campaign Publishes Mid-year Statistics
Results of a special program adopted by China's State Administration of Industry and Commerce against counterfeiting were recently unveiled. According to the SAIC, the anti-counterfeiting program was undertaken during the first six months of 2000 and included the investigation and confiscation of counterfeit commodities in particular industries. The results were reported as follows:
1. The counterfeit products mainly focus on cosmetics, beverages, wine, tobacco, garments, shoes, sound and visual recordings, medicine and material for agricultural production.
2. Individual businesses were found to be the major source of manufacturing counterfeit goods of inferior quality.
3. Daily-use commodities, home electrical appliances and telecommunication appliances, tobacco, wine and beverages rank the first among commodity complaints. Complaints with respect of building materials, medical devices and agriculture production materials were also prominent.
4. Problems with respect to infringement of rights in service industries were also prominent and have recently increased rapidly. It is estimated that the number of cases in this area in the first six months amounted to 93,010, among which commodities accounted for 50,121 and service consumption accounted for 42,889. The fact that these figures are not very far apart is troubling authorities, who have not seen such parity in the past few years. The service cases included: telecommunications 5,439, food and drink 3,274; washing and dying 2,883, and home electrical appliance repair 2,699. (Source: www.saic.gov.cn)
Online Infringer Had Duty to Verify Authorization
China Economic Information company, the authorized distributor of Xinhua News Agency's economic news, last year sued China Scientific and Technological Information Research Institute (CSTIR) for infringing China Economic Information's copyright by publishing online economic news composed by Xinhua. In June 2000, the Beijing Haidian District People's Court ruled in favor of China Economic Information, demanding the defendant compensate the plaintiff's losses amounting to about RMB 17,000. CSTIR has appealed to the Beijing Intermediate People's Court.
The court found that although CSTIR purchased information from the Hongxun Information Counseling Center, that information provider had not previously obtained a license from the proper distributor, making the posting of that information an infringement. The court found that CSTIR had a duty to verify that Hongxun had the authority to distribute such information, and that they had failed to do so. (Source: Science & Technology Daily)
Criminal Violations Found in Copyright Case
Two young men illegally printed a traffic map of Shanghai and sold the map, making profits of RMB 1.67 million. The original publisher of the map sued them on the basis of violating the Criminal Procedure Law. On July 14, the Shanghai Zhabei Court sentenced one infringer to two years in prison, while the other received a sentence of one and a half years.
Early this year, the Shanghai Mapping Institute and the Shanghai Technology Publishing Company found that a traffic map of Shanghai jointly published by them was not meeting sales goals. They found out two individuals, Xue Muoquan and Huo Chongguang, had published the map independently. Based on this information, the two companies reported the infringement to the relevant authorities and brought a lawsuit in a Shanghai court under a copyright theory. Under Chinese intellectual property law, some kinds of IP infringement, including copyright, may rise to the level of criminal offenses. The two plaintiff companies sought such penalties from the court.
During the trial, the court found out that, from October 1999 to April 2000, Xue and Huo illegally printed more than 170,000 counterfeit maps. By selling 112,900 counterfeit maps, they obtained more than RMB 110,000 (roughly US $13,250). According to the relevant provision of China's Criminal Law, Article 217, and the judicial explanation of of this provision by the Supreme Court, criminal penalties for copyright violations are applicable to gains of over RMB 200,000 for individuals and RMB one million for enterprises. The defendant should be punished by either a fine or a sentence of 3 years or less in jail." The Shanghai Zhabei Court, in a ruling that reportedly assessed the first criminal verdict for a violation of copyright in Shanghai, sentenced Xue to two years and Huo to one and a half years in jail in addition to fines and confiscation of all ill-gotten gains.
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"Don't be Cruel!" Cries CD Pirate to HK Police
After confiscating over 5,000 CDs from a suspected pirate's music store in Hong Kong, police were only able to prove that 359 were counterfeits. The remainder of the recordings, which made up many of the suspect's private collection, were scheduled to be destroyed. The pirate, who apparently failed to make a timely claim that not all of the seized goods were contraband, had surrendered his claims on the legitimate merchandise.
The dealer's main concern is not the value of the merchandise, however, but of the sentimental value of his private collection, which includes thousands of recordings of Elvis Presley, the Beatles, Pat Boone and others collected over a period of 40 years. As quoted in the South China Morning Post, the dealer, 53-year-old Leung Kwokhung, said: "When I was a 10-year-old, I listened to the song 'Love Me Tender' and I fell in love with the golden oldies."
Leung was sentenced to seven months in prison for selling pirated CDs, but the loss of his collection may be the better deterrent against future infringing activities. (Source: South China Morning Post)
APBL Goes After Beer Market with IP Purchase
Singapore-based Asia Pacific Breweries Ltd. (APBL) announced on August 7 the acquisition of two beer trademarks, Aoke and Kronen, for US $12.2.
APBL purchased the marks from Kuala Lumpur-listed Hap Seng Consolidated Berhad in a deal that includes the closure of the Hap Seng brewery in Hainan, China.
APBL has characterized the move as a way to further dominate market share in Hainan, which it estimates at 80% as a result of the deal with Hap Seng. APBL's portfolio also includes the popular Heineken and Tiger brands in China. (Source: Agence France Presse)
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Lehman, Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
(formerly known as the L&A Law Firm)
Suite 188, Beijing International Club
21 Jianguomenwai Dajie, Beijing 100020 China
Tel.: (86)(10) 6532-3861
Fax: (86)(10) 6532-3877
mail@chinalaw.cc
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Contact Our Other Offices:
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The China Virtual Intellectual Property Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
