Akeso, Summit tie-up over lung cancer therapy
CATEGORIES: Out-licensing; biopharmaceutical
LEGAL COUNSEL: Sidley Austin represented Akeso.
KEY POINTS: Akeso, a China-based developer and manufacturer of innovative and affordable antibody drugs, struck a USD5 billion licensing deal with Summit Therapeutics, in which the US company would develop and commercialise ivonescimab, Akeso’s potential first-in-class breakthrough bispecific antibody treatment for lung cancer in the US, Canada, Europe and Japan.
Under the agreement, Akeso will receive a USD500 million upfront payment, with a total potential deal value of up to USD5bn. Akeso will also receive a low double-digit percentage of royalties on net product sales of ivonescimab.
AMEC sues Lam Research over trade secret
CATEGORIES: Trade secrets; semiconductors
LEGAL COUNSEL: Jincheng Tongda & Neal (JT&N) represented AMEC from initial lawsuit to final hearing.
KEY POINTS: After 13 years, the technical secret infringement litigation initiated by Advanced Micro-Fabrication Equipment China (AMEC) against Lam Research, a US wafer fabrication equipment supplier, reached a conclusion at the Shanghai No. 1 Intermediate People’s Court, which held that Lam did, by unfair means, obtain trade secrets related to AMEC’s etching machine. Lam was ordered to immediately destroy the photos containing the trade secrets, not to reveal, use or allow others to use the stolen technology, and pay damages of RMB1 million (USD139,000) plus legal fees and reasonable expenses set at a further RMB900,000.
The case established the principle of “compensation for future losses”. AMEC had no evidence that Lam Research used the disputed trade secret in its operations, or took reference from it during R&D. Nevertheless, JT&N was able to prove that Lam had obtained the trade secret by unfair means and will eventually profit from it, causing AMEC to lose competitive advantage and suffer losses, which was upheld by the court.
Notably, etching machines are a highly technical field with inadequate competition, with only around 10 manufacturers of such machines globally. This feature, along with Sino-US friction and rivalry in the high-tech field, put the case under the spotlight.
Ansjer Electronics counters US patent infringement allegation
CATEGORIES: Patents; electronics
LEGAL COUNSEL: Kangda Law Firm represented Ansjer Electronics.
KEY POINTS: Singapore-based Portus and its US subsidiary filed a lawsuit against Uniden America, a wireless electronics manufacturer, at a Texas federal court, accusing it of selling wired and wireless cameras that infringe on Portus’ US patents. Besides demanding a cessation of infringement and compensation of legal fees, Portus sought punitive damages at three times the amount of losses.
Ansjer Electronics, based in Zhuhai, was the manufacturer of the products in dispute, and according to the agreement it signed with Uniden, it would bear joint and several liability for all IP infringements. If an infringement were affirmed, Ansjer would be liable for an overwhelming amount of compensation, and its US-marketed products, with tens of millions of dollars in annual sales of similar goods to the US, would be likewise compromised.
After analysing the exemplary Graver Tank case heard by the US Supreme Court, which concerns determination of patent infringement, as well as the resultant function-way-result method and doctrine of equivalents, Kangda confirmed that the disputed products were substantially different from the patented technologies claimed by the plaintiff. Accordingly, Kangda adopted a strategy of affirmative defence, and set a firm goal of product non-infringement.
The case ended with Portus withdrawing its claims and the court issuing a dismissal with prejudice, which means the plaintiff cannot refile the same claim in that court.
BNIC, Ford China lawsuit over Cognac indication
CATEGORIES: Trademarks; beverages; automotive
LEGAL COUNSEL: Wanhuida Intellectual Property represented BNIC. Suotong Law Firm (now the Chongqing office of SGLA Law Firm) and Grandall Law Firm represented Ford China.
KEY POINTS: The Bureau National Interprofessionnel du Cognac (BNIC), a French organisation responsible for promoting and safeguarding the geographical indication of “Cognac”, filed a civil lawsuit against the Chinese affiliates of Ford Motor due to the car maker’s use of “Cognac” in its tagline and “Cognac brown” in a description of vehicle interior colour.
The BNIC challenged the use on the basis of Cognac’s geographical indication (GI) registration but, in the absence of a specific GI law in China, resorted to base the action on the Anti-unfair Competition Law.
In the first instance of the hearing, the Suzhou Intermediate People’s Court determined that Ford China’s actions constituted unfair competition, ordered cessation and awarded damages of RMB2 million (USD280,000). The Jiangsu Provincial High People’s Court later upheld this verdict after appeal.
The case confirms that GI product registrants may act based on the Anti-unfair Competition Law, and considerably extends the concept of competitive relationship, in the sense that products or services concerned do not need to be similar, and simple “association” in the mind of consumers can trigger protection.
Christian Silvain sues Ye Yongqing for art plagiarism
CATEGORIES: Copyright; art
LEGAL COUNSEL: Duan & Duan Law Firm and Yingke Law Firm represented Christian Silvain.
KEY POINTS: Christian Silvain, a Belgian artist, accused Ye Yongqing, a celebrated Chinese contemporary painter, of infringing on the copyright of his works. In the first-instance verdict, the Beijing Intellectual Property Court (BIPC) determined that Ye did infringe Silvain’s copyright, including the rights of attribution, modification, reproduction and distribution. Ye, ordered to issue a public apology and pay EUR650,000 (USD700,000) in damages, has filed an appeal.
Duan & Duan conducted detailed comparison against 176 infringing artworks spanning 25 years, the results of which were condensed in a 500-page document and presented to the court, who agreed with the counsel’s opinion that the infringing work were essentially identical to Silvain’s work. While there were a few visual differences, they proved far from sufficient to establish any expression of “originality”.
The lawsuit was originally initiated by Silvain in 2019. At one point, Ye could not be reached for the purpose of service of process, so the BIPC issued a public announcement to that effect. Ye subsequently raised an objection on jurisdiction, but this was dismissed. Afterwards, the case saw further delay due to the pandemic.
In the meantime, Silvain also sued Sotheby’s and Christie’s, two auction houses that sold Ye’s infringing works, which ended with settlements.
Drone maker sues four companies
CATEGORIES: Trademark; aviation
LEGAL COUNSEL: JunZeJun Law Offices represented DJI.
KEY POINTS: DJI Technology, a leading manufacturer of unmanned aerial vehicles, sued Runkangyuan Technology, Xinkechuang Precision Machinery, Eternal (Guangdong) Tech Electric, and Runlongqing Technology for the unauthorised use of the “大疆” trademark on consumer electronics products including head, neck and eye massagers, fascia guns and warming belts. Collected evidence put the profits from infringement as high as RMB260 million (USD36 million). DJI demanded the defendants cease infringements and pay RMB10 million in damages.
There were immediate obstacles to DJI’s action. For one thing, the infringing products were not aircraft. To meet the standard for cross-class protection of trademarks, DJI would need to be recognised as a well-known trademark. Complicating the issue, Runkangyuan had pre-emptively applied for the “大疆” mark, granting it a potential “prior rights” defence. In addition, DJI sought punitive damages, a rare move in trademark disputes and which called for exceptionally compelling evidence.
The case is currently in second-instance hearing, following a first-instance verdict favourable to DJI. According to JunZeJun, courts have generally been prudent when it comes to offering cross-class protection of well-known trademarks. This rare occurrence, coupled with the punitive damages, sounded the alarm for trademark infringers across the market.
‘Envy’ apple at root of Enzafruit rights dispute
CATEGORIES: Plant variety rights; fruit
LEGAL COUNSEL: Lusheng Law Firm represented Enzafruit.
KEY POINTS: Enzafruit, a New Zealand-based breeder and grower of fruit and vegetables, scored a victory in a plant variety rights (PVR) infringement case in China over the most expensive apple variety in New Zealand, known as Scilate and branded as “Envy”.
The Lanzhou Intermediate Court of Gansu province awarded Enzafruit’s full claim by applying punitive compensation, marking the highest infringement damages regarding vegetative plants on record.
Lusheng’s IP litigation team collected evidence from several orchard sites in China to capture the necessary propagation materials and conduct DNA analysis to be presented as evidence in court.
The case followed a revision to China’s Seed Law in March 2022 that strengthened protection for the rights of breeders of varieties and now extends protection to both fruit and propagation material in any protected variety.
First AI image copyright infringement in China
CATEGORIES: Copyright; artificial intelligence; art
LEGAL COUNSEL: Tian Yuan Law Firm represented Li Yunkai, the plaintiff. Li is an associate at Tian Yuan, but did not act as legal counsel.
KEY POINTS: Li Yunkai, a lawyer and AI art enthusiast, discovered that an image he generated using Stable Diffusion was appropriated in an article posted on Baijiahao, Baidu’s content sharing platform. He then filed a lawsuit against the user. In the first-instance verdict, the Beijing Internet Court ordered the defendant to issue a statement to eliminate adverse effects and pay damages at RMB500 (USD70), which Li has renounced.
This was the first copyright infringement case in China involving AI-generated images. Tian Yuan comprehensively researched and illustrated the process of image generation, whether it constitutes as “work”, and whether the plaintiff enjoys its copyright. In the end, the court determined that the defendant infringed on the plaintiff’s rights of attribution and communication on information networks.
Furthermore, the court held that although the plaintiff did not physically draw the lines or guide AI’s hand, he nevertheless led to the creation of the image after multiple iterations of prompt-feeding and parameter adjustments, which constituted an expression of individuality. Therefore, the image was considered a “work”, and subject to the protection of the Copyright Law.
Gilead, Kawin prodrug indirect patent dispute
CATEGORIES: Patents; biopharmaceuticals
LEGAL COUNSEL: Jincheng Tongda & Neal represented Kawin Technology and, together with Yuzhi Law Firm, represented KawinGreen Biotech.
KEY POINTS: Gilead Sciences, a US biopharmaceuticals company, filed a lawsuit against Kawin Technology and KawinGreen Biotech on the grounds that the sofosbuvir tablets developed, used and marketed by the defendants inevitably metabolises in the patient’s body to produce the pharmacologically active ingredient GS-461203, which falls under the scope of Gilead’s patent. Gilead believed the production and use of the ingredient constituted direct infringement, while the provision of the tablet to patients constituted indirect infringement.
This was the first prodrug indirect patent infringement case in China. Indirect patent infringement is complex and legally ambiguous, as the concept is absent from China’s current laws and regulations. While interpretations contain substantive provisions for abetting and assisting patent infringement, there is no consensus on the criteria of determining joint infringement on such basis.
After combing through the legal basis, categorisation and practice of indirect patent infringement systems in various jurisdictions, defendants’ counsel summarised how the “singular subject principle” of the US, the “realising goal of invention” standard of Germany, the “tool theory” standard of Japan, and adjudication criteria behind prominent global cases concerning prodrug and metabolite patent infringement can be applicable in China.
In the end, the Beijing IP Court dismissed any accusation of direct or indirect infringement. The case delineated the scope of protection for innovative drug developers concerning the active ingredients produced by the parent drug, which not only reserved breathing room for domestic prodrug developers, but also kept the affordable sofosbuvir available to China’s low-income hepatitis C patients.
Golden-Elephant, Hualu Hengsheng melamine dispute
CATEGORIES: Trade secrets; chemicals
LEGAL COUNSEL: King & Wood Mallesons represented Golden-Elephant.
KEY POINTS: Sichuan-based Golden-Elephant Sincerity Chemical, a melamine producer and owner of the leading technology of “producing melamine with a pressurised gas phase quenching method”, filed a lawsuit against the Shanghai-listed Hualu Hengsheng Chemical, a former employee that brought trade secrets to Hualu, along with a design institute and a consulting company that helped design the infringing plant for Hualu using the trade secrets.
The dispute proceeded on two prongs: patent infringement and trade secret infringement. Combined, the two cases resulted in damages payable to Golden-Elephant at RMB218 million (USD30 million), the highest amount for IP infringement within a single project.
The case set an example on determining infringement based on documentary evidence only – designing document and safety evaluation report – without inspecting physical evidence, as it involves large industrial equipment.
Subsequently, Golden-Elephant launched a separate melamine-related trade secret lawsuit against the same defendants, demanding RMB600 million in damages. A settlement amounting to RMB440 million was reached.
Goufangtong trademark unfair competition dispute
CATEGORIES: Trademarks; unfair competition; real estate
LEGAL COUNSEL: W&H Law Firm represented Goufangtong. Baijus Law Firm represented Huanjutang.
KEY POINTS: Goufangtong, a real estate information platform jointly operated by Chengdu Goufangtong Technology and Ruixiaobo Technology, has a presence in Chengdu, Nanjing and Hangzhou. Since June 2021, Huanjutang, a competitor, began providing similar services on WeChat, websites and elsewhere using the “Goufangtong” mark, causing confusion among real estate companies, brokers and users. Therefore, Goufangtong launched an unfair competition lawsuit against Huanjutang.
One of the most significant challenges faced by Goufangtong is that it did not obtain the registered trademark exclusive right related to “Goufangtong”, and a prior attempt to register this trademark was turned down by the China National Intellectual Property Administration (CNIPA) for not being distinct enough. Taking advantage, Huanjutang claimed that the mark did not constitute a trademark “with certain influence”, as defined under article 6 of the Anti-unfair Competition Law.
In the end, the first-instance court determined, based on evidence such as Goufangtong’s market performance, industry article citations, and we-media recommendations, that it was influential in Chengdu. While the trademark was not distinct, its function of indicating a source of services in Chengdu should not be overturned by the fact that these same words may have been used by others at one point.
Huanjutang was ordered to cease infringement, compensate for damages, and issue a public statement to eliminate any ill effects. The verdict was upheld after appeal.
Hengrui, Merck exclusive licence for PARP1 inhibitor
CATEGORIES: Out-licensing; biopharmaceutical
LEGAL COUNSEL: Cooley advised Hengrui Pharma.
KEY POINTS: Hengrui Pharmaceuticals struck an exclusive licensing agreement with Merck to develop, manufacture and commercialise its HRS-1167 and SHR-A1904 treatments worldwide (outside of mainland China), as well as co-promote them in mainland China.
HRS-1167 is a selective, highly active and orally available PARP1 small molecule inhibitor, while HR-A1904 is an antibody-drug conjugate (ADC) targeting Claudin 18.2, both developed by Hengrui.
According to the agreement, Merck will provide Hengrui an upfront payment of EUR160 million (USD172 million). Hengrui will also receive payments for technology transfer, as well as an option exercise for the Claudin 18.2 ADC for up to EUR90 million. Hengrui is further eligible to receive royalty payments on net sales of such products, subject to achievement of certain milestones, driving the total potential payment up to EUR1.4 billion.
Hutchmed, Takeda license therapy outside China
CATEGORIES: Licensing; biopharmaceutical
LEGAL COUNSEL: Ropes & Gray advised Hutchmed, while Mayer Brown represented Takeda.
KEY POINTS: Hutchmed, a Hong Kong-based biopharmaceutical company focused on targeted therapies for cancer treatment, entered into an exclusive licensing agreement with Takeda, under which the Japanese company will develop and commercialise fruquintinib worldwide (excluding mainland China, Hong Kong and Macau).
Fruquintinib is a highly selective and potent medicine that received regulatory approval in China in 2018 to treat patients with metastatic colorectal cancer, the third-most common type of cancer worldwide.
Hutchmed will receive USD400 million upfront, and is eligible to receive up to USD730 million more, subject to milestones, as well as royalties on net sales. The deal was processed in parallel with applications for approval with major regulatory agencies around the world.
Hytera, Motorola trade secret theft via poaching dispute
CATEGORIES: Trade secrets; copyright; telecommunications
LEGAL COUNSEL: Steptoe, Commerce & Finance Law Offices, Perkins Coie, Calfee Halter & Griswold, Finnegan, Morgan Lewis, Smith Gambrell Russell, Duane Morris, Cohen & Gresser, Honigman, and MinterEllison represented Hytera, the defendant. Kirkland & Ellis and Crowell & Moring acted for Motorola, the plaintiff. Greenberg Traurig represented Texas Instruments, a third-party defendant. JGBLaw advised the Dealers Industry Viability Group, the amicus.
KEY POINTS: Motorola continues its global campaign against Hytera Communications, which began in 2017 when it accused the Shenzhen-listed company of hiring three Motorola engineers who allegedly secretly took about 10,000 documents containing key technology, which allegedly enabled Hytera to build its own line of handheld radios.
This tussle takes place on multiple fronts, including the US, China, Germany, Australia and the UK. In February 2020, a federal jury in Chicago found Hytera guilty of stealing trade secrets and copyright infringement, awarding Motorola total damages at USD765 million (later reduced to USD544 million). Hytera was also ordered to pay USD49 million in royalties for sales that had occurred, and was subsequently found in civil contempt for not paying.
Elsewhere, the Federal Court of Australia found, in December 2022, that certain Hytera products did infringe Motorola’s copyright and patent rights, while dismissing the other claims. The Court of Appeals Dusseldorf modified in May 2023 a first-instance verdict from 2018 and fully dismissed Motorola’s patent infringement complaint.
In the UK, Motorola applied for a freezing order against Hytera, which was subsequently set aside on appeal. Motorola’s continued attempt to appeal was dismissed by the UK’s Supreme Court, concluding the English proceedings.
The saga continues as a US criminal trial examining Motorola’s trade secret theft allegations against Hytera is set to begin, with a Federal indictment unsealed in an Illinois court on 7 February 2024.
Jingu, Xingye series dispute over trade secret
CATEGORIES: Trade secrets; chemicals
LEGAL COUNSEL: DHH Law Firm and Zhiwuhe Law Firm represented Jingu Group, the plaintiff. Wincon Law Firm represented Xingye Group, the defendant.
KEY POINTS: Zhejiang Jingu is the Chinese market agency for eco-pickled surface (EPS), a patented process to replace acid pickling of flat rolled steel developed by The Material Works (TMW), a US toll processor. Jingu entered into an EPS equipment sale contract with Xingye Group, and supplied the latter with instruction manuals on the operation and maintenance of the equipment.
Subsequently, Jingu discovered that a company named Green Steel Environmental Technology submitted an invention patent for “mixed jet scale removal system”, and accordingly filed a lawsuit against Xingye for leaking the technical secrets contained in the manual to Green Steel.
Wincon argued that EPS is a technically mature product commercially licensed for the Chinese market, and had been both on sale and in use around the world for many years, making it a widely known technology. Furthermore, the firm argued that Jingu, fully knowing that EPS was no trade secret, filed a malicious lawsuit to compromise Xingye’s interests, and launched a counterclaim.
In its first-instance verdict, the Qingdao Intermediate Court upheld Wincon’s view and dismissed all of Jingu’s claims, further ordering Jingu to pay RMB100,000 (USD14,000) in reasonable expenses. Jingu filed an appeal but later withdrew.
Compared with patent rights, technical secrets, such as in this case, have no clear basis or boundary of rights, which means that it can be easy for plaintiffs to file a lawsuit by abusing their rights, but on the other hand incredibly burdensome for the defendant to deal with the aftermath.
Lacoste, Nanji dispute over ‘crocodile’ mark
CATEGORIES: Trademarks; apparel
LEGAL COUNSEL: Wanhuida Intellectual Property represented Lacoste. Dacheng Law Offices, Hiways Law Firm and DeHeng Law Offices represented Nanji E-commerce and Cartelo.
KEY POINTS: The battle between two left-facing crocodiles concluded before the Beijing High Court with Lacoste prevailing in the retrial and second-instance proceedings initiated by Nanji E-commerce, which acquired Cartelo Crocodile in 2016.
Nanji E-commerce sought a retrial to reverse court decisions that invalidate Cartelo’s standalone left-facing crocodile registrations, but the applications were dismissed in September 2023, which brought the trademark dispute to a close.
The court held that the two parties’ “crocodile” trademarks are similar and unlikely to be distinguished by the general consumers. Despite the history and use status of both Lacoste and Cartelo, to draw a clear distinction between the two parties’ trademarks, it would be appropriate to rule that Cartelo’s disputed trademark violated the Trademark Law.
Both companies entered the mainland Chinese market in the 1990s, and their first litigation over the crocodile image can be dated to a 1969 civil suit in Osaka. The High Court notably determined in a 2000 lawsuit that, due to Cartelo’s trademark consisting of more than the crocodile, the two were substantially different and did not confuse consumers. The latest reversal of this opinion reflects the evolution of trademark awareness and judgment standards.
Lepu, Keymed exclusive licence to AstraZeneca
CATEGORIES: Out-licensing; biopharmaceutical
LEGAL COUNSEL: Zhong Lun Law Firm acted as legal counsel at Lepu Biopharma. Sidley Austin represented Keymed Biosciences.
KEY POINTS: Hong Kong-listed Lepu Biopharma, Keymed Biosciences and AstraZeneca entered into a global exclusive licensing deal in relation to CMG901, a potential first-in-class Claudin 18.2 antibody drug conjugate (ADC). Under the agreement, AstraZececa obtained the exclusive licence to develop, manufacture and commercialise CMG901 globally.
CMG901, the first Claudin 18.2-targeted ADC approved for clinical trial in both China and the US, is owned by KYM Biosciences, a 70%-30% joint venture between Lepu and Keymed.
KYM will receive an upfront payment of USD63 million on the transaction closing, and additional development and sales-related milestone payments of up to US$1.1 billion, as well as tiered royalties of up to low double-digits.
Liangxin Electrical nationwide rights defence campaign
CATEGORIES: Trademarks; electrical appliances
LEGAL COUNSEL: Ronly & Tenwen acted as legal counsel for Liangxin Electrical.
KEY POINTS: In view of widespread counterfeiting of its company name and trademarks, the Shenzhen-listed Liangxin Electrical launched a holistic rights defence campaign targeting dozens of companies across the nation, with many lawsuits launched or planned.
The numerous infringers, spread across Zhejiang, Jiangsu, Wuhan, Beijing and elsewhere, are great in number and diverse in the manner of their infringement, which proved challenging for Liangxin. In a few standout cases, the infringement was well disguised under legitimate acts; infringing products extended to the upstream and downstream of the industry chain, making it difficult to capture; the infringement began so long ago that it risked exceeding the statute of limitation; and the regional court, favouring the local infringer, imposed only minor penalties.
In view of these obstacles, Ronly & Tenwen successfully established that the upstream and downstream circuit breakers constitute similar products with new energy charging stations, convincing the court to support the claim for RMB3 million (USD417,000) in compensation.
In another case, beside proving that the defendant profited from infringement, the legal team showed that it bid for land, paid high land use fees and built a factory, indirectly proving that it enjoyed good returns during the early stages of infringement, which, combined with referential data such as gross profit margin, led the second-instance court to raise an originally low amount of damages to RMB2 million.
Loongson, CIP United instruction set copyright dispute
CATEGORIES: Copyright; semiconductors
LEGAL COUNSEL: Jingtian & Gongcheng represented Loongson Technology, while Mayer Brown advised it on Hong Kong law. Global Law Office represented CIP United.
KEY POINTS: The dust settles following years of dispute between the Star Market-listed Loongson Technology and CIP United over possible infringement of the former’s instruction set on the latter’s MIPS set.
The MIPS instruction set was developed by the California-based MIPS Technologies. In 2011, Loongson obtained the full license of the MIPS instruction set. However, CIP United later claimed that it had received the MIPS technology licensing contract from MIPS Technologies in 2019. As Loongson and CIP did not directly enter into any contract, CIP claimed that Loongson had, without authorisation, used and modified the MIPS technologies and underpaid royalties.
In February 2023, the Beijing IP Court issued a verdict that dismissed CIP’s claims that Loongson’s LoongArch instruction set and 3A5000 processor infringed on the MIPS instruction set and constituted unfair competition. During appeal, the Beijing High Court upheld the original decision.
CIP also launched an arbitration against Loongson at the Hong Kong International Arbitration Centre (HKIAC), submitting seven claims that focus on more than RMB27 million (USD3.2 million) in unpaid royalties stemming from the MIPS technology licensing contract between the two, six of which were dismissed by the HKIAC in June 2023.
In January 2024, the HKIAC determined Loongson as the winner, supporting its claim of arbitration fees at RMB41 million, but also requested it to pay accrued royalties at RMB24 million, as well as deferred payment of expenses, to CIP.
The case paved the way for setting review standards for instruction set-related copyright infringement, which may facilitate the handling of similar cases in the future.
Snap-on, Mitchell against Autel over alleged data theft
CATEGORIES: Trade secrets; data security; automotive
LEGAL COUNSEL: Morrison & Foerster represented Snap-on and Mitchell 1, while AnJie Law Firm advised them on PRC law. Fish & Richardson and Greenberg Traurig advised Autel, while Broad & Bright acted as PRC counsel. AnJie and Broad & Bright have since merged to become AnJie Broad.
KEY POINTS: High-end toolmaker Snap-on and automotive repair solutions provider Mitchell 1 brought a lawsuit against Shenzhen-based Autel Intelligent Technology and its US subsidiary, accusing them of hacking into the handheld diagnostic computers and data servers to steal proprietary data relating to vehicle repair and diagnostics, and setting up accounts under false names to access that data.
Faced with forensic evidence of its misconduct, Autel stipulated to a temporary injunction – which was subsequently converted to a preliminary injunction – agreeing to refrain from using or disclosing the data that it obtained. The case was then brought before JAMS to determine the arbitrability and then proceeded to arbitration.
The case involved claims for misappropriation of trade secrets, violation of the Digital Millennium Copyright Act, and violation of the Computer Fraud and Abuse Act and state anti-hacking statutes. Exporting data from China to be used in arbitration and litigation required assessment of material under China’s Personal Information Protection Law and the Data Security Law, including processing export applications through various regulators.
Sunny Optical, AAC Optics series patent dispute
CATEGORIES: Patents; optics
LEGAL COUNSEL: Lifang & Partners represents Sunny Optics. JunZeJun Law Offices and Grandall Law Firm represent AAC Optics.
KEY POINTS: Sunny Optics, a leader in the optics manufacturing industry, initiated lawsuits against its competitor, AAC Optics, starting a patent dispute that lasts to this day and bringing AAC’s listing on the Star Market to a halt.
Both Sunny Optics and AAC Technologies, the controlling shareholder of AAC Optics, are Hong Kong-listed companies. Just as AAC Optics, a spinoff of AAC Technologies, was gaining momentum for a public listing, it and five affiliates were hit by a total of 17 patent infringement lawsuits from Sunny Optics. Days later, ACC hit back with 10 more lawsuits against Sunny and four other companies.
The ensuing series of actions marked the largest patent infringement dispute in the global optics market, as well as the largest domestic patent dispute since Huawei v Samsung. As of the deadline for this award, five patent infringement claims brought up by Sunny Optics have been dismissed.
Tesla, Zhongyin trademark and unfair competition dispute
CATEGORIES: Trademarks; automotive; food & beverage
LEGAL COUNSEL: Lusheng Law Firm represented Tesla. PW & Partners Law Firm represented Zhongyin.
KEY POINTS: Tesla initiated a lawsuit against Guangdong-based Zhongyin Food due to the latter using the “TESLA”, “TESLA MOTORS”, “特斯拉”, and other figurative trademarks that were identical or highly similar to Tesla’s on their soda and beer products. Zhongyin applied for and was assigned more than 50 trademarks identical or similar to Tesla, and used images of Tesla vehicles on its posters.
The Shanghai IP Court determined in its first judgment that Tesla’s six class-12 trademarks are recognised and well-known trademarks, supported Tesla’s claim of RMB5 million (USD700,000) in full, and ordered Zhongyin to publish a statement in Legal Daily to eliminate any adverse effects on Tesla. After appeal, the Shanghai High Court upheld the verdict.
One of the most challenging issues is that Zhongyin applied for the “TESLA MOTORS 特斯拉” trademark in 2013 to be used on beer, preceding Tesla’s own application. Lusheng argued that Zhongyin’s infringement acts with the trademark were not only used on beer, and that it obtained it in bad faith, which was supported in court.
TikTok, Stitch Editing trademark bout in the US
CATEGORIES: Trademarks; short videos
LEGAL COUNSEL: Dorsey represented TikTok and ByteDance. Mintz represented Stitch Editing.
KEY POINTS: UK-based video editing company Stitch Editing launched a lawsuit at the US District Court for the Central District of California against TikTok and its developer, ByteDance. Stitch Editing claimed that TikTok’s “stitch” feature, which allows users to clip up to five seconds from an existing video and stitch it together with a second video clip, infringed on their own US-registered trademark of “STITCH EDITING” and common law trademark rights in the term “STITCH”, requesting USD116 million in damages.
After two years, the federal jury found that the TikTok feature did not violate the trademark rights of Stitch Editing, furthering rejecting the argument that it caused any confusion among consumers, or any impression that the companies were affiliated.
Weinian, Li Ziqi's dispute over contract, trademark
CATEGORIES: Trademarks; influencers; e-commerce
LEGAL COUNSEL: Kangda Law Firm and JunHe represented Weinian.
KEY POINTS: After two years, the RMB600 million (USD83.5 million) battle over corporate control and trademark between Li Ziqi, a popular video blogger and internet celebrity, and Weinian Brand Management, a multi-channel network (MCN) company, ended in the form of a settlement and re-entering into a co-operation agreement.
The dispute concerned control over Ziqi Culture Communication, a joint venture between the two parties, of which 51% was originally held by Weinian, and 49% by Li. Following the settlement, Li is now a 99% stakeholder, and its video channel resumed activity after more than 500 days of hiatus. Other than video blogging, Li is also engaged in the production, sale and export of luosifen (snail rice noodle) herbal cough syrup and other traditional foodstuff, all in her namesake.
Weinian, which began as an internet celebrity management company, began its co-operation with Li in 2016. The company has gradually steered its focus to online retail, and the decoupling with Li accelerated this process.
In view of the special corporate nature, Weinian’s counsel took business logic and factors into heavy consideration when making their argument. For example, to mitigate the effects of interim measures, Kangda communicated with the court about how seizure, impounding and freezing of assets would materially affect its operations.
The case drew considerable attention due to the involvement of a top brand in the new economy sector, as well as complex legal issues such as crossover of criminal and civil lawsuits, unfair competition and trademark rights. The final settlement and recommitment to co-operation set a valuable precedent to the industry, particularly in terms of brand-manager relationship.
Youkeduo infringement over source code
CATEGORIES: Trade secrets; software engineering
LEGAL COUNSEL: Jincheng Tongda & Neal (JT&N) represented Huaer Zhanfang.
KEY POINTS: Huaer Zhanfang, a Shenzhen-based integrated online operation solutions provider, brought a trade secret infringement lawsuit against its partner, RockySaaS, due to the latter uploading the source code of the WeChat mini program, Youkeduo, independently developed by Huaer, onto GitHub, leading to it being copied by many users.
In the first-instance hearing, the Shenzhen Intermediate Court affirmed that the technical information in question was a trade secret and ordered RockySaaS to pay damages, plus reasonable expenses, of RMB5 million (USD695,000). After appeals from both sides, the verdict was upheld by the Supreme People’s Court.
For litigation strategy, JT&N opted for a civil lawsuit, but operated with a criminal lawsuit mindset. Although there was no way to reveal the natural person identity of the leaker, significant suspicion of unlawful disclosure was attributed to the company by analysing the information embedded in the source code, thereby listing the company as the defendant.
The case was selected among the “IP court exemplary cases” by the Supreme People’s Court. Jurisdiction was given to the court at the place of infringement results, the domicile of the infringer, who was pinpointed using the “preponderance of evidence” standard and citing daily life experience.
GitHub is an overseas platform, which means there was no way to directly prove that the uploader worked for RockySaaS, who lacked motivation or profit prospects for the act. Therefore, the firm submitted evidence that not only located Rocky’s domain name, website link and other publicly accessible information in the source code, but also certain parameters only in its possession, for which Rocky failed to provide a reasonable explanation.
Youku sues Kuaishou over infringement of TV series
CATEGORIES: Copyright; television; short videos
LEGAL COUNSEL: Ronly & Tenwen represented Youku and Cool Young.
KEY POINTS: Youku (Beijing) and Cool Young (Kunshan) launched an infringement lawsuit against popular short video sharing platform Kuaishou in relation to Young Marshall, a TV series depicting the early days of Manchurian warlord Zhang Xueliang.
The plaintiffs found a significant number of infringing clips of Young Marshall circulating on Kuaishou, which diluted the show’s audience base and imposed on their legitimate interests, causing economic losses.
Given that Young Marshall was an award-winning and well-known series, that Youku had previously issued other infringement notices to Kuaishou (albeit not specifically about this show), and that Kuaishou had a special hashtag dedicated to Young Marshall, the court held that Kuaishou, as the beneficiary of video hits and ad revenue, failed to exercise due management and care, therefore constituting assisting infringement. Kuaishou was ordered to compensate economic losses and bear reasonable legal expenses of RMB1.4 million (USD194,500).