Stanford Law School has just released eight new guiding cases, including including five IP and unfair competition cases covering trademarks, unfair competition, and software copyright. The cases were determined to be guiding cases earlier this year by the Supreme People’s Court, and are available here. Dr. Mei Gechik. the Founder and Director, China Guiding Cases Project, also has analytic reports on the CGC Project here.
Regarding IP-related matters, Dr. Gechik notes “the SPC’s confidence in providing guidance in intellectual property and unfair competition through GCs seems to have grown. Five out of the eight GCs released in 2015 Q2 cover these two areas. Of particular note, the SPC went beyond patent law to release cases that address issues in trademark law, as well as copyright law as applied in the protection of computer software.”
These guiding cases appear to me to be part of an increasing interest in developing a system of case precedent in China, particularly since the establishment of China’s IP courts, and the keen interest in developing precedent expressed by the Beijing IP courts, including a national conference on this topic on September 22, 2015 which set forth the role of the Beijing IP court as a national center for research on case guidance (案例指导研究基地).
The prospects for Chinese case law, and IP case law in particular, was discussed at a recent IP judicial conference sponsored by the Federal Circuit Bar Association in Shanghai, which included a large turnout of both Chinese and US judges. Among issues discussed included the role of case law in adjudicating cases, the possibilities of introducing amicus briefs, the role of en banc decisions in making or reversing precedential cases, the binding effect of local court decisions and other issues involved in handling cases that are intended to have greater legal impact than determining only the rights of the parties involved in the law suit.
Of course, the development of precedent could be especially valuable to developing “transparency and predictability” for business people seeking greater legal predictable in their complex decision making processes, which would appear to be an important goal of an effort to enhance commercial rule of law between the US and China.
Interestingly these five cases were decided as long as eight years ago. In addition, only one of these cases was decided by the Supreme People’s Court. The remainder were adjudicated by local Higher People’s Courts. From a common law perspective, this may not look like a system of precedent as we know it. For example, if the cases are to have binding effect, how can past cases be recognized as precedential? How/why should local cases affect decisions from other provinces? Or are the cases primarily intended for other purposes, such as education of the judiciary and public or to assist in development of a more limited body of case law? Nonetheless, whatever the role of case law will be in China, its development is overall a positive step that should be encouraged and Stanford Law School/Dr Mei Gechik are making a very important contribution to that effort.
Here is a quick summary of these five important cases, with links, that is drawn from the translation and analysis on the Stanford website. All errors in my summary are of course, my own:
Shi Honglin v. Taizhou Huaren Electronic Information Co., Ltd. This dispute over computer software copyright infringement involved circumstances regarding reversal of burden of proof when defendant refuses to release source code in a software copyright infringement case.
Beijing Jingdiao Co., Ltd. v. Shanghai Naikai Electronic Science and Technology Co., Ltd. This computer software copyright infringement dispute involved use of technological protection measures (TPM) to restrict machines from reading the data stored in a file format, thereby ensuring that the machine bundled with computer software possesses a competitive advantage in the market. The court determined that use of a TPM by this means is not a type of act taken by a copyright owner to protect its software copyright under the Copyright Law.
Ferrero International S.A. in Italy v. Montresor (Zhangjiagang) Food Co., Ltd. and Zhengyuan Marketing Co., Ltd. This unfair competition dispute is one of a few well known and widely commented cases involving Ferrero on trade dress and design protection in China. This case holds that in order to determine whether a commodity is well known as used in the Anti-Unfair Competition Law, the court should consider a combination of various factors that demonstrate the circumstances under which the known commodity is protected — including sales period, sales regions, sales volume, and sales targets of that commodity within China, as well as the duration, extent, and geographical scope of publicity that has been carried out.
Shandong Lu Jin Industrial Co., Ltd. v. Juancheng Lu Jin Crafts Co., Ltd. and Jining Lizhibang Home Textiles Co., Ltd. This trademark infringement and unfair competition dispute involved a determination that “Shandong Brocade” (Lu Jin) had already become a generic name for textile products that possessed regional characteristics. According to the court, a generic name can be an appellation established by the industry norm or it can also be the abbreviated name used as a convention by the public. The court noted that Shandong Brocade has a history of over a thousand years and that Shandong Brocade has been generally recognized by the State mainstream media, various kinds of specialized newspapers, and the news media of Shandong Province. Reference books on arts and crafts and fine arts have confirmed that “Shandong Brocade” is a type of cotton folk textile product that is hand made in Shandong. The case’s decision implicates not only what constitutes a generic geographical term, but also the role of traditional knowledge/intangible cultural heritage in defining whether a term is generic and how to handle the relationship between these terms and the trademark system.
Beijing Baidu Netcom Science and Technology Co., Ltd. v. Qingdao Aoshang Network Technology Co., Ltd. et al. This unfair competition case addressed acts by Aoshang Network Company and Unicom Qingdao Company which involved their advertising popping up when network users log onto the Baidu website to conduct keyword searches through the Internet access service provided by Unicom Qingdao. The court determined that this practice violated the good faith and business ethics and was within the scope of prohibited acts under Article 2 of the Anti-Unfair Competition Law.