In late November 2023, the CNIPA issued the third batch of guiding cases on the administrative protection of intellectual property rights (Guiding Cases No. 9-11). This article is about the introduction and significance of guidance in these cases.
Guidance Case No. 9
Beijing Intellectual Property Office Handles Patent Infringement Dispute over “System for Repositioning Teeth and Method for Making the System” Invention Patent
Highlights of the case
During the trial of an administrative ruling case, after the patent administrative department under the State Council has decided to invalidate the patent in question, the department administering the patent work may rule that the request for administrative ruling be rejected. If the party concerned files an administrative lawsuit against the decision to invalidate the patent right, the right holder may re-file the request for administrative adjudication after the People’s Court’s judgment to revoke the decision has come into effect.
Basic facts of the case
Shanghai Youhui Investment Consulting Co., Ltd. (hereinafter referred to as the Petitioner) is the patentee of the invention patent entitled “System for Repositioning Teeth and Method for Making the System” (Patent No. ZL201180028187.0). On 1 November 2022, the Petitioner filed a request for an administrative ruling on the patent infringement dispute with the Beijing Intellectual Property Office, claiming that Beijing Ruicheng Hospital Management Co., Ltd., Aichi (Sichuan) Medical Equipment Co., Ltd. and Ruitai Stomatological Hospital Branch of Beijing Ruicheng Hospital Management Co., Ltd. are suspected of infringing the patents above. After examination, the Beijing Intellectual Property Office opened a case on the same day.
On 11 January 2023, about the invalidation request made by the respondent, Aichi (Sichuan) Medical Equipment Co., Ltd., for the patent in question, the CNIPA decided to declare the patent invalid in its entirety. At this time, the administrative ruling case was still under trial.
On 1 February 1, 2023, the Beijing Intellectual Property Office ruled rejecting the Petitioner’s request for an administrative adjudication, given that the patent rights in question had been declared invalid.
Decision
Article 47(1) of the Patent Law stipulates that a patent right declared invalid shall be deemed to have ceased to exist from the beginning. After the CNIPA decided to declare all patent rights in the case invalid, the Beijing Intellectual Property Office decided to reject the Petitioner’s request for administrative adjudication, and at the same time, pointed out that if there is evidence proving that the decision of the review of the demand for declaration of invalidity of the patent rights in the case has been revoked by a practical administrative judgment, the Petitioner may re-file a request for administrative adjudication; If the party does not accept the decision, it may file a lawsuit with the Beijing Intellectual Property Court within 15 days from the date of receipt of the decision.
Significance of Guidance
To improve the efficiency of administrative adjudication of patent infringement disputes, the department managing the patent work, in the process of dealing with patent infringement disputes, may first reject the request for administrative adjudication if the patent right in question has been declared invalid by the patent administrative department of the State Council. The Beijing Intellectual Property Office adopted the method mentioned above of “rejecting first and requesting separately” to expeditiously close the case, which safeguarded the legitimate rights and interests of the right holders while avoiding the impact of the instability of the patent right on the relevant parties and the public. It embodied the characteristics of administrative protection that takes into account both efficiency and fairness.
Guidance Case No. 10
Chongqing Yuzhong District Administration for Market Regulation (Intellectual Property Office) investigated and dealt with the infringement of the exclusive right of “Dongzi” and other registered trademarks
Highlights of the case
In investigating and handling cases of disputes over infringement of the exclusive right to use registered trademarks, if it is found that the violation has been established, the department responsible for trademark law enforcement may mediate the dispute over the infringement of trademarks and the amount of the relevant compensation, and take the mediation agreement and its fulfillment as factors to be considered in the “elimination or mitigation of the harmful consequences of the illegal act on its initiative” as stipulated in the first subparagraph of Article 32 of the Law on Administrative Punishments, and impose a lighter or mitigated penalty by the law.
Basic facts of the case
Wang Mou is the trademark registrant of the trademark “Device” (Registration No. 3278749) and the trademark “Dongzi” (Registration No. 18634764), and the exclusive right to use the registered trademarks in question was lawful and valid at the time of the complaint.
Wang Mou complained to Chongqing Yuzhong District Administration for Market Regulation (Intellectual Property Office) (hereinafter referred to as Yuzhong District Bureau), claiming that Chongqing Dong Taste Fresh Old Hot Pot Co., Ltd. (hereinafter referred to as the party) used the “Device” logo on the signboard of the shop, and printed the words “Dongzi” on the order menus and aprons of the staff, which was suspected of infringing the registered trademarks of “Device” and “Dongzi” owned by the company in the good of “Restaurants” and other services in Class 43. On 11 August 2022, the Yuzhong District Bureau filed a case for investigation. During the study, the right holder requested the Yuzhong District Bureau to mediate the dispute over the trademark infringement and the amount of compensation.
On 6 September 2022, the Yuzhong District Bureau organized mediation between the two parties. It issued a mediation letter after both parties agreed that the party concerned would stop using the trademark in question in catering service activities and compensate the trademark registrant with RMB 10,000.
Decision
On 21 October 2022, the Yuzhong District Bureau determined that the party’s unauthorized use of another person’s registered trademark in services constituted an infringing act as stipulated in Article 57(1) of the Trademark Law; the party took the initiative to stop the use of the trademark in question in the course of the investigation of the case, and took the initiative to fulfill the obligations specified in the mediation agreement, which conformed to the situation of “actively eliminating or mitigating the harmful consequences of the illegal act” as stipulated in Article 32(1) of the Administrative Penalty Law. When applying the provisions of Article 60(2) of the Trademark Law to impose administrative penalties on the party’s trademark infringement, the Yuzhong District Bureau, by the law, set a lighter sentence by ordering the party to stop the infringing behavior and fining it RMB 3,000.
Significance of Guidance
The case was handled through “administrative penalty + administrative mediation”, which regulated the market order while responding to the rights holder’s demand for lawful civil damages in the administrative procedure and avoided “punishment instead of mediation” or “mediation instead of punishment”. In such cases, the parties concerned took the initiative to stop the infringing acts in the administrative conciliation compensated the right holders. The amount of compensation can be taken into account as factors for the discretionary range of administrative penalties and the amount of specific fines, and the above behaviors are in line with the circumstances stipulated in the Administrative Penalties Law for the parties to take the initiative in eliminating or mitigating the harmful consequences of the illegal behaviors.
Guidance Case No. 11
Tianjin Heping District Administration for Market Regulation (Intellectual Property Office) investigated and dealt with the trademark infringement case of Tianjin Myshop Commercial Management Co., Ltd.
Highlights of the case
As a market manager, the organizer should take necessary measures to stop selling infringing goods. The market organizer did not take the required measures after repeated notifications, objectively failed to perform its management duties actively, subjectively had the intention of letting the sale of counterfeits take place, and, provided the business premises for the sale of infringing goods, which is an infringement of the provisions of Article 57(6) of the Trademark Law.
Basic facts of the case
Myshop Leisure Plaza under Tianjin Myshop Commercial Management Co., Ltd (hereinafter referred to as Myshop Plaza) is a large-scale commercial complex dealing in cosmetics, apparel, accessories, catering, and entertainment.
On 16 July 2020, the Tianjin Heping District Administration for Market Regulation (Intellectual Property Office) (hereinafter referred to as the Heping District Bureau) received a report that the informant claimed that the merchants in Myshop Plaza were selling goods infringing on the exclusive right to use registered trademarks. The law enforcement officers investigated and dealt with the merchants involved and required Myshop Plaza to implement the primary responsibility. From July 2020 to April 2021, the Heping District Bureau imposed 18 administrative penalties on 18 merchants within Myshop Plaza and conducted interviews with Myshop Plaza. After two discussions and notifications by law enforcement officers, Myshop Plaza knew that the operators in the market were committing trademark infringement and still did not take the necessary measures to stop them.
On 7 April 2021, the Heping District Bureau filed a case against Myshop Plaza for investigation. It was found that Myshop Plaza had signed a contract with the relevant merchants on the use of cabinets, and the contract specified the breach of contract responsibility for violating the provisions on intellectual property rights and other aspects. During daily business activities, Myshop Plaza failed to fulfill its obligation of inspection and monitoring due to inadequate management. It was unable to take necessary measures to stop the market tenants from infringing on the exclusive right to use registered trademarks after being informed and interviewed. On 21 May 2021, Heping District Bureau, by the provisions of Article 57(6) of the Trademark Law, Article 75 of the Regulations for the Implementation of the Trademark Law, and the Standards for Judgment of Trademark Infringement, determined that Myshop’s behavior constituted trademark infringement.
Decision
Heping District Bureau, by Article 60(2) of the Trademark Law, the parties were fined RMB 40,000 as an administrative penalty.
Significance of Guidance
The case is a guidance case of market organizer’s negligence in performing its management duties, knowing, or should have known that the operators in the market had committed trademark infringement but did not stop, which constituted infringement of the exclusive right to use registered trademarks. In this case, the market organizer, as an operator engaged in the management of the commodity market, failed to take necessary measures to stop the infringing acts of the merchants in the market after being informed of the infringing actions and being interviewed several times. About the determination of necessary measures, the relevant authorities shall consider the management responsibilities of the market organizer as stipulated in laws and regulations, contractual agreements, and other factors in determining whether it has taken the necessary measures that it can take within the scope of its duty capacity to stop the infringement. Essential steps include notification, warning, suspension (termination) of the contract, or pursuing liability for breach of contract. In this case, the market organizer did not take any necessary measures, subjectively to help, the result of the infringer and the infringer to implement the trademark infringement of the damage caused by the result of the unity of its behavior was ultimately found to constitute the Trademark Law, Article 57(6) of the infringing acts.