Because of that “China” cigarette violation of “Trademark Law”, such as lawyers Wang Shi Administration for Industry and Commerce Trademark Review and Adjudication Board (hereinafter referred to as “TRAB”) taken to court, required ordered to withdraw “Chinese” trademark. Yesterday morning, a city in Court that the law is not retroactive, rejected the prosecution lawyers, such as Wang Shi.

>> Plaintiff

Packing violation of relevant laws

Last year, the Shanghai Chinese lawyer Wang Shi found printed on the packaging of cigarettes, “Chinese” “Tiananmen Square”, “Chinese table” and other names and designs. Promulgated in 1993, “Trademark Law” prohibits the same or similar name with the State, or with the specific locations where the central state organs, the name or the name of landmark buildings, the same graphics text and graphics appear on the label, so “China” mark should be removed. As to the Trademark Office for the revocation, apply for a review to TRAB rejected, Wang Shi such as commercial judges to court, and the Shanghai Tobacco as a third defendant.

Wang stone such as that under the cigarettes prohibited commodities in recent years, and “China” “Tiananmen Square”, “Chinese table” and other signs on behalf of the Chinese national spirit and national image, is used in cigarettes, harmful to socialist morals, adverse effects on society, so it should be revoked.

>> Defendant

Registered earlier in the “Trademark Law”

Commercial judges, said the Chinese trademark registration in the “Trademark Law” before the enactment, but also has great influence is a trademark, it should not be revoked.

Shanghai Tobacco said, “China” brand was founded in 1950, applied for registration in February 1952, officially registered in 1979, while China’s first “Trademark Law” was enacted in 1982, according to the law is not retroactive previous principle, “Trademark Law” and relevant provisions of the disputed trade mark is not retroactive.

>> Court

“Trademark Law” non-retroactivity

Case involved trademark disputes took place in the “Trademark Law” before the implementation of the existing “trademark” trademark dispute is whether the retroactive dispute in this case the main content.

Investigation, the court confirmed that China was founded and registered trademark in February 1952, due to national authorities to clean up on trademarks, re-issued trademark registration, on approval of the registration is October 31, 1979. Later, after the renewal of trademark disputes, and its exclusive right period to 2013.

From the disputed trade mark registration date, the legal system of trademark registration in China has gone from 1963 by the State Council promulgated the “Trademark Management Regulations”, first promulgated in 1982, “Trademark Law”, the first revision in 1993 “Trademark Law” and amended again in 2001, “Trademark Law” process.

Which, in 1982, 1993 and 2001 “Trademark Law” stipulated the “before the implementation of this Act continue in force a registered trademark.” The Court therefore finds that the Chinese lawyer Wang Shi claim trademark violation as existing “Trademark Law” provisions of Article X of the reasons for the lack of legal basis, and rejected his decision to prosecute.

Web link: http://breakingnewschina.com/a-lawyer-to-sue-for-rescission-of-the-chinese-cigarette-trademark-was-rejected

The “seller’s defense of legitimate source” appears in the third paragraph of Article 56 of China Trademark Law.

It provides that “Selling goods without awareness of such goods’ infringement upon the exclusive right to use a trademark shall be exempted from liability for compensation insofar as the seller is able to prove that the goods were lawfully obtained and can indicate the supplier’s identity.” Pursuant to the provision, if the seller is unaware of the fact that the goods on sale are infringing the exclusive rights of others’ registered trademarks, and is able to prove the goods were properly and lawfully obtained and indicate the identity of the supplier, then the seller is not liable for any compensation claims arising from the sale. As a matter of fact, the provision has become a last-resort guarantee of exemption from compensation liabilities for sellers entangled in disputes involving infringement upon the exclusive rights of registered trademarks.

In trademark infringement disputes, sellers allegedly selling infringing goods often make every effort to furnish all the information of suppliers in order to obtain exemption from liability for compensation. Items which may exclude the seller include Value Added Tax(VAT) invoices, commercial invoices, purchase contracts, proof of payment; some provide payment receipts, delivery lists, storage lists and other materials, while others provide business licenses, sales qualifications and other documents. Some judges also tend to focus on the basis of materials furnished by sellers, on review of whether separate evidential materials support each other and form a complete evidence chain, and direct the focus to discussions of their authenticity, legitimacy and relevance. However, this manner of evidence review still remains an examination of facts of infringement for only certain types of goods. For some special goods, judges and lawyers need to pay further attention to the issue of the applicability of the “seller’s defense of legitimate source.”

The production and distribution of food, medicines, health food, fireworks, chemical products and other goods generally relate to the safety of users’ lives, therefore, China often sets out strict provisions in their production, hygiene, quality, transportation and sales, and imposes various qualification requirements for businesses engaged in the production, transportation and sales. Accordingly, laws and regulations also make provisions on the conduct of the relevant parties. If the special goods are involved in a trademark infringement dispute, the relevant laws and regulations should serve as key appraisal criteria in determining whether the seller has “legally obtained” the goods.

Take health food for example; in accordance with the Food Hygiene Law, China’s Ministry of Health promulgated Provisions on the Administration of Health Food in 1996 with specific provisions on the definition of health food, approval, production and operation, labeling, specifications and advertising, supervision and management, encompassing requirements in areas of production, marketing, monitoring and evaluation. In the last 10 years or so, the Ministry of Health has consecutively released a series of regulatory documents and technical standards, such as Provisions on the Declaration and Acceptance of Heath Food by the Ministry of Health, Notice of the Ministry of Health on Further Regulating Management of Raw Materials for Health Food, Provision on Labeling of Health Food, Good Manufacturing Practices of Health Food and Technical Standards of Inspection and Evaluation of Health Food. With the transfer of administrative authority from the Ministry of Health to the State Food and Drug Administration (SFDA) and promulgation of the Administrative Licensing Law, Trial Provisions on the Administration of Registration of Health Food formally entered into force on July 1st, 2005, detailing rules on the application, approval, raw materials and auxiliary materials, labeling and specifications, tests and inspections, re-registration, review and legal liabilities.

Moreover, laws and regulations not only set strict health food requirements for manufacturers, but also make provisions on obligations upon sellers over their obligations regarding the examination incoming goods. For example, Zhejiang Province released Provisions of Zhejiang Province on Production Quality Supervision and Management and Provisions of Zhejiang Province on Investigating Production and Distribution of Counterfeit and Shoddy Goods. Article 7 of Provisions of Zhejiang Province on Administration of Certificate Claims in Food Procurement expressly provides that in procurement of special nutritional food, health food and new resources food, the product approval certificate shall be claimed together with inspection certificates or laboratory test results.

Considering that the relevant laws, local regulations and department rules have imposed strict requirements for the production and sales of health food, stricter requirements should be set accordingly in the application of the “seller’s defense of legitimate source” as provided in the third paragraph of Article 56 of China Trademark Law. In other words, a seller should not only demand sales certificates from the supplier but also examine the supplier’s qualifications, which include business licenses and production permits, products’ authentication marks, marks for fine quality products and other quality marks, and manufacturer’s production permits, use licensing, inspection reports, certificates and trademark registration certificates. In many disputes involving well-known trademarks of a famous pharmaceutical enterprise represented by the author, the infringing products were all disguised as “health food” on sale mainly in supermarkets, chain drug stores and health care products firms. Manufacturers were varied, but the majority of them were “shell” companies. Because manufacturers have inherent deficiencies, sellers can provide neither the manufacturers’ production permits registered and recorded with SFDA, nor the trademark registration certificates consistent with those of the infringed registered trademarks. Pursuant to the aforesaid requirements on certificate claims by purchasers, the purchase of the seller, of course, does not fall into the “legitimate” category, because no certificate has been claimed during the procurement, thus violating the mandatory requirements imposed by laws and regulations. In this regard, the “seller’s defense of legitimate source” is not applicable to the seller as provided in the third paragraph of Article 56 of China Trademark Law, even though the seller is able to provide the relevant payment receipts and purchase vouchers, and indicate the supplier of the infringing goods.

For a better understanding, take a more familiar and relevant case for example: opium is a medical drug whose production and distribution is strictly controlled. If it is planted and produced in private, the subsequent procurement is certainly illegal and will in no way become legal just because the purchaser has made the payment.

Furthermore, in determining whether the seller has fulfilled the obligation of certificate claims, its business scope and scale should also be taken into account and treated differently. For example, drug enterprises specializing in pharmaceutical wholesales or chain sales should, of course, shoulder more obligations in certificate claims than private food stores and have a greater burden of proof. In trademark infringement cases, some people tend to believe that as long as the seller can prove the source of goods, the seller may be exempted from compensation liabilities. At this point, the wording “legal” has been intentionally or unintentionally ignored. However, this author holds that if judges and lawyers are able to accurately grasp the special requirements in the production, distribution and procurement of special goods, and make an accurate conclusion over the conduct of the seller in accordance with relevant laws, regulations or provisions, justice will be done in the protection of legitimate rights of trademark holders. In the meanwhile, the seller will not be bogged down in trademark infringement disputes if it strictly complies with the relevant provisions on certificate claims.

Web link: http://www.chinaipmagazine.com/en/journal-show.asp?id=758

I. Facts
The plaintiff: Bai Guangcheng

The defendant: Beijing Daoxiangcun Foodstuff Co., Ltd. (“Daoxiangcun”)

Beijing Bristle Doll (“Zongren”) is a traditional folk art of Beijing. It was included into the list of the intangible cultural heritage of the city in June 2007. Bai Guangcheng and his brother Bai Dacheng are the only successors of the art. The Donkey Dance is a traditional product of the art. In May 2007, Bai Guangcheng completed his work of the Donkey Dance, and inscribed on its seat “Beijing Zongren Bai” in Chinese characters. The work, which was exhibited for many times in public, was the subject matter disputed in the existing case.

In September 2009, Bai Guangcheng bought a case of “Old Beijing”-branded Guangdong-style moon cakes at the unit price of 146 Yuan, which was manufactured by Daoxiangcun. The above work was used on the packaging box and the handbag of the product as follows: (1) It was used one time at the upper left on one side of the handbag. This side of the handbag also included another three pictures of “Old Beijing Leather Shadow Puppet,” “Old Beijing Winter Grasshopper” and “Old Beijing Opera;” (2) It was used one time at the middle left of the packaging box. This side of the box also included six pictures of “Old Beijing Leather Shadow Puppet,” “Old Beijing Winter Grasshopper,” “Old Beijing Opera,” “Old Beijing Rabbit,” “Old Beijing Swallow-tailed Kite” and “Old Beijing Rectangular Courtyard;” (3) Inside the box were 6 separate packets, and the work was used on the outside of each of them four times. The above six pictures were also printed on each packet. Upon comparison, the Donkey Dance work used on the packages was coincident with the work made by Bai Guangcheng.

II. At Trial

The trial court found that Beijing Bristle Doll is a folk art that originated at the end of Qing Dynasty and has been circulated in the Beijing region. It has been included in the list of intangible cultural heritage of Beijing. The handicraft is intangible as it was handed down from generation to generation. As a successor of the art, Bai Guangcheng completed the work of Donkey Dance by incorporating traditional artistic processes and styles. It was a folklore work expressed in a tangible vehicle.

A folklore work may be a subject matter for intellectual property protection. The Copyright Law of China directs that copyright protection measures for folklore works will be separately provided by the State Council, but such measures has not been promulgated so far. In this situation, a folklore work that meets the copyrightable subject matter requirements can be protected under the Copyright Law. In the case at hand, Bai Guangcheng was in possession of the original of the work, which, strengthened by his brother Bai Dacheng’s testimony that plaintiff created the work, is prima facie that plaintiff authored the work. Although the Donkey Dance is a traditional work of Beijing Bristle Doll, there was no evidence that the work of Bai Guangcheng was identical with any pre-existing work on the same subject. Thus, the court found that the work of Bai Guangcheng was original and protected by the Copyright Law. Daoxiangcun used the work of Bai Guangcheng on its moon cake packages, and the Donkey Dance work shown on the packages was coincident with the work of Bai Guangcheng. In so doing, Daoxiangcun did not infringe upon Bai Guangcheng’s right of adaption, but did reproduce the work by converting the three-dimensional work into a two dimensional one.

Daoxiangcun’s claim that the moon cake packaging merely used a picture of the Donkey Dance, but without showing an authorized source of the picture was not admitted in court. To conclude, the defendant used the work created by Bai Guangcheng without permission, without naming the author, and without remunerating the author, and therefore shall be liable for an injunction, apologize to Bai Gangcheng, and compensate for the loss sustained by Bai Guangcheng. In view of the above, in accordance with Articles 10.1.2, 10.1.5, 10.1.6, 47.11, 48.1 and 49 of the Copyright Law of the People’s Republic of China, and Articles 7.1, 25.1 and 25.2 of the Interpretation of the Supreme People’s Court on a Few Issues in the Application of Laws in the Trial of Civil Dispute Cases over Copyright, the court ruled as follows: (1) Effective as of the judgment, Daoxiangcun is enjoined from further using the Donkey Dance work of Bai Guangcheng on the packages of the “Old Beijing”-branded Guangdong-style moon cakes manufactured and sold by it; (2) Within 30 days of the effectiveness of this judgment, Daoxiangcun shall make a public apology to Bai Guangcheng on Beijing Evening News for its unauthorized use of the Donkey Dance work of Bai Guangcheng and for not presenting the name of the author of the work, on the packages of the “Old Beijing”-branded Guangdong-style moon cakes manufactured and sold by it; (3) Within 10 days of effectiveness of this judgment, Daoxiangcun shall pay damages, in the amount of 20,000 Yuan, to Bai Guangcheng for the economic loss sustained by the latter; and (4) The plaintiff ’s all other complaints are dismissed. No party appealed after the first-instance judgment.

III. Different Views

Beijing Bristle Doll is intangible cultural heritage in the category of traditional skills. On February 25th, 2011, the Law on the Intangible Cultural Heritage was adopted, which marked the perfection of the administrative law system or the public law system for the protection of intangible cultural heritage in China. The bristle doll is also a folklore work, but the private law system for the protection of folklore works is still unclear. Only Article 6 of the Copyright Law provides that “Measures for copyright protection of folklore works will be established separately by the State Council.” But, the measures have not been issued up to date. Thus, two opinions prevailed in the trial of this case: One view said that the work concerned was not a work protected by the Copyright Law, because the above measures have not been issued. The court should reject the complaint by the plaintiff in the absence of a legal basis for such complaint. The other opinion said that although the measures have not been issued, Article 6 suggests that folklore works may be protected by copyright, for which special protective measures will be needed, considering the peculiarity of folklore works from common works. From the application of laws, before the issuance of such measures, where a folklore work complies with the requirements for works protected under the Copyright Law, the Copyright Law may be applied to protect such folklore work, with considerations given to the peculiarity of such folklore work. The author agrees with the second opinion, which was adopted finally by the court.

IV. Judge’s Comments

The present case was included by the Supreme People’s Court into the 50 classic cases of intellectual property protection in 2010 in China. The author of this article will analyze this typical case on the following aspects: the principle that a judge shall never refuse to judge a case; whether or not folklore works are protected by the Copyright Law and the required elements for such protection; and how to coordinate between the protection of intangible cultural heritage and the copyright protection when the Copyright Law is applied to the judgment of a case.

1. A court should not refuse to entertain a case on account of the absence of statutory provisions

The delay in the making of the measures for the protection of folklore works is essentially due to the complicated coverage of such works and the great differences in international society on the protection for such works. However, on the modern principle of the rule of law, a judge shall not refuse to judge a case for the absence of statutory provisions. The German jurist Helmut Coing believed that in a country ruled by law, a judge will face three tasks:

a. He must present his argument on a valid claim he faces, but should not refuse it on the pretext of the absence or unclarity of relevant legal provisions;

b. He must obey the law, and render his judgment on the complaint placed before him in accordance with the law;

c. He must make his judgment in accordance with the law in a just and fair manner. Moreover, the codes of law of France and Switzerland both provide that a judge shall not refuse to judge a case on account of the absence of relevant legal provisions.

This principle determines that where a dispute is raised over a folklore work, a judge should not reject the claims of a party simply on the grounds that no relevant legal provisions are available, but should employ legal construction approaches to correctly apply relevant laws and sufficiently discuss the issues disputed, so that the justification of the judicial determination can be manifested and the legislative deficiency in the protection of folklore works can be made good.

2. Folklore works are copyrightable

a. Folklore work defined

Folklore was defined in the Tunis Modal Law on Copyright for Developing Countries, jointly adopted by UNESCO and WIPO in Tunis in 1976 (“Tunis Modal Law”) as “all literary, artistic and scientific works created on national territory by authors presumed to be nationals of such countries or by ethnic communities, passed from generation to generation and constituting one of the basic elements of the traditional cultural heritage.” In addition, the concept of “expressions of folklore” was developed in the Model Provisions for National Laws on the Protection of Expressions of Folklore Against Illicit Exploitation and other Forms of Prejudicial Action, jointly adopted by UNESCO and WIPO in 1982, which means productions consisting of characteristic elements of the traditional artistic heritage developed and maintained by a community of a country or by individuals reflecting the traditional artistic expectations of such a community. The term “expressions of folklore” instead of “folklore work” was used to distinguish folklore (expressions) from traditional copyrighted works. In the traditional copyright system, copyright is granted to individual authors; to receive copyright protection, a work must be fixed and creative; and the protection is limited to a certain period. These required properties, however, can not be satisfied or satisfied insufficiently by, or are unsuitable to, folklore (expressions). In Chinese language, the concept of “folklore works” is the same as that of the “expressions of folklore” or “folklore,” and is not restricted to folklore works qualifying for the protection of the Copyright Law.

Compared with folklore works, the concept of “intangible cultural heritage” has come from the Convention for the Safeguarding of the Intangible Cultural Heritage, adopted by UNESCO on October 17th, 2003. In China, Article 2 of the Law on the Intangible Cultural Heritage defines it as various expressions of traditional culture, and their related physical things and places, passed from generation to generation by all ethnic groups, and deemed as constitutive elements of their cultural heritage by such ethnic groups, including: i. traditional oral literature and the languages that are used as the vehicle for such literature; ii. traditional fine art, calligraphy, music, dance, opera, quy and acrobatics; iii. traditional skills, medicines and calendars; iv. traditional rituals, festivals and other folk customs; v. traditional sports games and entertainments; and vi. other intangible cultural heritage.

Pursuant to these provisions, folklore works are covered by the intangible cultural heritage.

b. Whether folklore works can be copyrightable subject matter

Regarding whether or not folklore works can be protected by copyright, one opinion is for the idea. The legislations of Tunis, Angola and Togo expressly state that folklore works are protected by their copyright laws. The other opinion is against the idea, stating that folklore works are incompliant with the copyright system and that substantial conflict and insurmountable hurdles exist between the two. Thus, a separate and special right for folklore works (for instance, the folklore work right) should be established side by side with copyright. In Russia, the Law on Copyright and Neighboring Rights (1993) expressly states that folklore works are not protected by copyright. The two opinions are both justifiable. The author of this article argues that the issue can be studied from a theoretical basis, legislative mode and a judicial application of laws.

First, from theoretical basis, the existence of folklore works is expressed as “works,” sourced from traditional culture passed from generation to generation. The proponent of the above idea believes that a folklore work unique of an ethnic group or a region is distinctively ethnic or regional from that of other ethnic groups or regions. This makes the folklore work creative. The creativity is community based, and is common creativity within the community. The traditional copyright system builds on personal rights, and the creativity of a work comes from an individual’s creative effort. Thus, due to the required creative element of copyright protection, it is impossible to include all folklore works under the protection of the traditional copyright law.

But the author of this article argues that folklore works that have specific successors and works that derive from folklore works can be protected by the Copyright Law. In the former’s case, each successor may imbue his personal characteristics, understanding and improvements into his work, which satisfies the requirement of creativity for copyright protection. In the latter’s case, new deductive works are made by collecting, sorting and rearranging folklore works. In light of the above, it is probable and feasible for the traditional copyright system to incorporate folklore works into its protection. However, due to the peculiarity of folklore works, the Copyright Law can protect only part other than all of the folklore works, and the folklore works unprotected by copyright will need protection by special legal provisions. That is, the copyright in special folklore works is peculiar, and is of a type and exercised in a way different from the traditional copyright. Professor Zheng Chengsi proposed that for a folklore work, the author can be granted the rights of reproduction and translation, but no right of adaption.

Second, from legislative mode, the Law on the Intangible Cultural Heritage can be applied as administrative protection for folklore works. In private law protection, in addition to the Copyright Law, a separate regulation has been expressly proposed. On one side, the separate legislative proposal is made with consideration for the peculiarity of folklore works. It will be a special regulation in relation to the Copyright Law. The usual copyright system has to be adjusted partially to accommodate folklore works. On the other side, the consideration has also been given to the balance of the system of the Copyright Law. The proposed legislation will be on the basis of the Copyright Law, and the two will work together to make the private law protection system for folklore works. The Copyright Law will be applicable in the absence of relevant provisions in the proposed legislation.

Last but not least, from judicial application of laws, the Copyright Law should be applied to protect works qualifying for its protection, before the separate regulation for folklore works is issued. The challenge and key is to what extent that the Copyright Law should protect folklore works. When courts are dealing with disputes (over folklore works), it is very possible that they include into the private domain things that belong to the public domain, or vice versa. It will be wrong, if they are too lenient or too stringent. They can hardly find the true course to follow. In the present case, Beijing Bristle Doll, as a traditional skill, has specific successors. As one of the successors, the plaintiff imbued his characteristics into the work concerned, improved it in certain ways, and expressed it in a tangible form. These elements fully complied with the requirements of works protected under the Copyright Law.

The copyright of the work concerned should be protected in accordance with the Copyright Law. However, as the work concerned was intangible cultural heritage, the bench has to consider how to preserve, protect, spread, succeed and develop the heritage, and in determining infringement and awarding damages, balance the relationship between the copyright protection of the successor’s private rights and the preservation, protection, spreading, succeeding and development of the heritage.

c. Reducing a three-dimensional work to a two-dimensional one is reproduction

According to the Copyright Law, the right of reproduction means the right to produce one or more copies of a work by printing, photocopying, lithographing, making a sound recording or video recording, duplicating a recording, or duplicating a photographic work or by any other means. There are three types of reproduction: the first type is to reproduce a work by keeping its medium, or by changing its medium but keeping the way of its expression; the second is to reproduce a work that does not have a medium by adding a medium to it; and the third is to reproduce a work by reducing it from three-dimensional to two-dimensional or vice versa. In the present case, defendant used the work concerned by printing such work on its packages. The work, which was a handicraft, was reproduced by defendant by reducing it from three-dimensional to two-dimensional.

Web link: http://www.chinaipmagazine.com/en/journal-show.asp?id=752