Countering ever more complex intellectual property infringement

By Rose Xu, Chang Tsi & Partners; Tom Wang, Kohler
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Intellectual property infringement and protection in China are becoming more and more complex. On the one hand, infringers have significant professional legal knowledge, concealing their illegal infringement through such means as lawful application for patents and trademarks; and, on the other hand, rights holders are also required to use various means, such as negotiations, administrative means and judicial means, in tandem, to halt infringement and safeguard their lawful rights and interests. Below, by taking a case in which the second author was personally involved as an example, we wish to share some insights with readers.

徐瑞红 Rose Xu 铸成律师事务所 合伙人 Partner Chang Tsi & Partners
Rose Xu
Partner
Chang Tsi & Partners

The overall design of a smart toilet exhibited at a kitchen and bathroom exhibition in Shanghai by a certain sanitary ware company from Taizhou was identical to that of Kohler’s hi-tech patented product, the Numi toilet, without a licence from the latter, and it additionally used the trademarks with the words “The bold look of Coma” and “Yue Mi” (both with associated Chinese characters), similar to Kohler’s well-known trademark with the words “The bold look of Kohler” and the registered trademark with the words “nu mi” (and associated Chinese characters). The infringing products were widely sold by large distributors in Beijing, Shanghai, Shenyang, etc. Additionally, the Taizhou company applied for a design patent and trademark in respect of its product.

Complete victory for Kohler

NUMI Logo

numi-Eng Logo In response to the serious infringement by the Taizhou company, Kohler formulated and implemented a multi-pronged rights protection plan, crossing swords with the Taizhou company on a number of occasions. After completing its evidence gathering, Kohler formally sent a lawyer’s letter to the Taizhou company, and following communications, the Taizhou company agreed to stop using “The bold look of Coma” (with associated Chinese characters), but refused to halt its patent infringement.

YUE MI LogoSubsequently, Kohler sent lawyer’s letters to the Taizhou company’s distributors and issued take-down complaint applications to the markets in which the distributors were located. Kohler submitted an application to the Trademark Office, opposing the Taizhou company’s imitation trademark, and Kohler and the Taizhou company each sought to have the other’s patent invalidated. Following its examination, the Patent Re-examination Board upheld the validity of Kohler’s patent and invalidated the Taizhou company’s later patent. Kohler then instituted a legal action in the Shenyang intermediate court against the Taizhou company, and its distributors, for design patent infringement.

王涛 Tom Wang 科勒公司 高级知识产权律师 Senior IP Attorney Kohler
Tom Wang
Senior IP Attorney
Kohler

Through the work of Chang Tsi & Partners, Kohler scored a series of victories in the above-mentioned legal rights protection actions. The Shenyang intermediate court found the infringement by the Taizhou company to be tenable and ordered it to cease the infringement and compensate for Kohler’s economic losses in the amount of RMB800,000 (US$130,000). The Liaoning high court then upheld the judgment at first instance. Kohler ultimately prevailed in the case and the measure of damages was by far the largest that has been awarded in similar infringement cases, thus strongly protecting the lawful rights and economic interests of Kohler’s hi-tech products in China.

Multi-pronged strategy

In the face of ever more complex IP infringement, rights holders need to dedicate a great deal of thought to formulating multi-pronged rights confirmation and protection strategies that are genuinely practicable.

  1. Apply for trademarks and patents as soon as possible to secure a greater scope of protection. In line with the “first to file principle”, a trademark application should be made as soon, and as broad, as possible. Furthermore, with respect to design patent applications, the amended Patent Law of 2009 brings in the concept of associated designs, which permits numerous similar designs for one product to be subsumed into one design patent application. It is recommended that rights holders fully utilise the conveniences offered by the law, and when applying for a design, consider several similar designs or implementation plans, then combine them into a single application to better avoid and respond to various forms of infringement.
  2. Establish a rigorous market monitoring system. Once the hi-tech products of well known enterprises hit the market, one quickly sees the imitators crawling out of the woodwork. In the face of complex and varied infringements, rights holders need to establish rigorous market monitoring systems to permit them to stay on top of infringements in the market.
  3. Promptly gather evidence of infringement. Before acting against an infringer, it is necessary to promptly gather evidence of the infringement to carry out the preparatory work for subsequent actions. Once these actions alert the infringer, its infringement will become more covert, further increasing the difficulty of evidence gathering.
  4. Invalidating the other party’s trademark or patent right. Once an infringer’s trademark has been registered, it is necessary to first have it invalidated by the trademark authority (either the Trademark Office or Trademark Review and Adjudication Board) before action can be taken against the infringer’s infringement. In contrast with trademarks, a court will not first request that the administrative authority (the Patent Re-examination Board) declare the defendant’s later duplicated patent invalid before trying the infringement dispute; instead, it will proceed with the trial of the infringement dispute directly. However, in an internet service provider (ISP) complaint or administrative complaint, the other party will often object on the basis of the certificate for its later patent, causing the ISP or administrative authority to hesitate in dealing with the matter out of apprehension that such party has a patent. Accordingly, thinking in the long term, the rights holder needs to promptly request that the Patent Re-examination Board declare the infringer’s later duplicated patent invalid.
  5. Workable and effective action plan. Infringement can only be halted if a specific action plan directly addressing the specific facts of the infringement by the infringer is formulated. For example, issuance of a lawyer’s letter followed by negotiations between the parties, investigation and handling by the administrative authority, lodging of a complaint, investigation and handling by the public security authority, criminal action or civil action, etc.
  6. Full preparation before a legal action. In a design patent legal action, a search report on the patent in question should be submitted to evidence its novelty and patentability, so that even if the defendant requests invalidation, the court can be convinced not to suspend the proceedings. Evidence of the degree of notoriety of the plaintiff’s product, the extent of the defendant’s infringement and the bad faith in the defendant’s infringement can also go a long way in influencing the judges’ determination of the measure of damages in a patent infringement action.

 

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