Trade Name Infringement by Guangzhou Estee Lauder Cosmetics Ltd.

In March 2004, the Joint Working Group established by the National Office of Rectification and Standardization of Market Economic Order and the State Administration for Industry and Commerce supervised and urged the handling of the case of trade name infringement by Guangzhou Estee Lauder.

Guangzhou Estee Lauder Cosmetics Ltd. was a private enterprise registered in Guangzhou in August 2000. Its main line of business was cosmetics and beauty and hair care products. The aforementioned company used “Estee Lauder”, an international brand name legally registered in China, as the main part of its trade name, and produced identical or similar products, to which the foreign party of the case reacted strongly. The Joint Working Group and the law enforcement team of the Guangzhou Bureau of Industry and Trade detected, in their field investigation, the following wordings and expressions in Guangzhou Estee Lauder’s promotional materials: “Estee Lauder”, “Our company has close association with internationally renowned brand names”, and “It demonstrates the landing, rooting and budding of a world-famous brand name in China.” It was quite evident that the intention was to cheat and misguide consumers. The law enforcement team checked and detained 12,170 copies of trademark labels suspected of infringement and falsified promotion materials.

Pursuant to relevant provisions of the Regulations on the Administration of Enterprise Name Registration and the Implementing Measures on the Administration of Enterprise Name Registration, the Guangzhou Bureau of Industry and Commerce ordered the aforementioned enterprise to change its name, to delete the words of “Estee Lauder” from its product labels and promotional materials, and not to replace them with any similar Chinese names. Meanwhile, according to the Implementing Rules of the Trademark Law of the People’s Republic of China, the company was charged a fine of RMB 200,000. Prior to that, the company had received administrative penalties for being suspected of counterfeiting the products of Estee Lauder in October 2001, November 2001, May 2002 and October 2003 respectively.

 

Registered Trademark Counterfeiting of LV by Two Shenzhen Companies

In March 2003, the Shenzhen Bureau of Public Security, together with relevant industry and commerce authorities, investigated and solved a case of trademark counterfeiting of LV, and seized 387 cases of 4000 counterfeited LV luggage and bags, a large number of semi-finished products, and equipment for producing counterfeits, involving a total value of over RMB 40 million.

LV is a world famous brand name, and has registered in China. LV bags are produced only in France and Spain. On March 22, 2004, Louis Vuitton Malletier reported to the Shenzhen Public Security Bureau that several enterprises in the Bao’an District that produced counterfeited LV luggage and bags were going to ship a batch of such products out of Shenzhen for customs declaration and export. Upon receiving the information and on that very night, Shenzhen Public Security Bureau, together with relevant industry and commerce authorities, conducted lawful check on Shenzhen Wenhong Co. Ltd. and Honghui Leather Products Co. Ltd., of which the former was engaged in the packaging and shipping of counterfeited bags, and the latter was the producer of semi-finished products, seized counterfeited LV luggage and bags, semi-finished products and equipment for producing counterfeits, and arrested two suspects, Tang and Luo.

 

Registered Trademark Counterfeiting of Cisco by a Gang of
Counterfeiters in Dongguan,Shenzhen

In October 2003, the Public Security Bureau, the Industry and Commerce Administration, and the Bureau of Quality and Technical Supervision of Shenzhen, and the police force of Dongguan carried out a joint action, unearthed a gang of producers of counterfeited computer modules, sealed up 11 locations in Shenzhen and Dongguan for producing counterfeited goods, detained 20 suspects, and confiscated case-involved articles of over RMB 20 million.

Prior to the action, based on reports from the public, the Economic Crime Investigation Squad of the Shenzhen Bureau of Public Security had made painstaking investigations, learned the criminal facts of this gang of counterfeiters’ producing and selling counterfeited Cisco computer modules in Shenzhen and Dongguan, as well as other specific information regarding the people involved in the criminal activities, underground workshops producing counterfeits, transit warehouses, storage warehouses, packaging locations, distribution outlets, vehicles, etc. On the afternoon of October 13th, over 100 policemen from both Shenzhen and Dongguan and the law enforcement team from the Bureau of Quality and Technical Supervision and the Bureau of Industry and Commerce of Shenzhen carried out a joint action in Shenzhen and Donguan respectively, and seized 11,609 integrated circuit modules bearing the words of “CISCO SYSTEMS” and the trademark pattern of “Shuangfeng”, over 100,000 counterfeited CISCO labels, 26,887 package boxes, 4,749 copies of specifications,3,205 hubs, 625 front board, 2 routers, 2 barcode machines and a Jetta. Main suspects of the case, namely, Zhu, Li, Zheng, Lu and Wang, confessed to the crimes, and have been put under criminal detention according to law.

 

Registered Trademark Counterfeiting of Adidas in Shanghai

In this case solved by the public security bureau in Songjiang District, Shanghai in June 2004, which involved infringement of the “Adidas” trademark, 827 cartons or 9,924 pairs of counterfeit Adidas sports shoes, 150 bags or 30,000 pairs of shoe uppers, 35 bags or 35,000 pairs of shoe cushions, 48 shoe molds and one packer with a total worth of over 5 million RMB were brought into seizure.

On June 16, 2004, the bureau followed the lead provided by its investigation division that an illegal production facility in Xiaokunshan Township in its jurisdiction was making counterfeit Adidas sport shoes with a daily production of over 3,000 pairs for exports. A special taskforce on the case was immediately formed of competent investigators and policemen and a meticulously thought-out operation plan was developed. The taskforce was divided into two teams. One team was sent directly to the illegal production facility. Some members went into the production facility posing as mobile population registrants. The others stayed on alert outside the facility, waiting for further calls. At the same time, the other team found and secretly surrounded the temporary residence of the prime suspect. In further actions, the team members who went into the facility undercover discovered ongoing illegal production and inventory of counterfeit goods on the site. They called their colleagues in right away, who seized the above-mentioned list of items. On the other scene, the other team had taken Zhang Hai, the prime suspect, under arrest. After interrogation, Zhang, formerly a private shoe-maker, confessed that he was hired in February 2004 by his Wenzhou boss, a man by the name of Pan, to take charge of illegal production of Adidas sport shoes while material supply and distribution were remote-controlled by Pan.

Zhang and Pan were respectively sentenced to 7 and 9 months of imprisonment and each fined 20,000 RMB.

 

Registered Trademark Counterfeiting of “Lacoste” by SUE Clothing
Company of Yangzhou

On February 23, 2004, Hanjiang branch of the local Administration of Industry and Commerce in Yangzhou, Jiangsu Province, acting on complaints, launched investigations into the case concerning franchise infringement of the “Lacoste” registered trademark of Lacoste Shirt Co. Ltd of France by “SUE” trademark of Yangzhou SUE Clothing Company. The Administration uncovered a large quantity of shirts, ties, tags and packing boxes bearing “Lacoste” graph juxtaposed with the mark of “SUE”, valued at over 400 thousand RMB yuan.

As later investigation revealed, from April 2002 to February 2004, Yangzhou SUE Apparel Company has produced a total of 6,094 shirts and 580 ties bearing the “Lacoste” graph together with the mark of “SUE”. The majority of the products have been sold or given as gifts. The law enforcement officials confiscated on the spot the remaining 1,822 shirts, 333 ties and 5,000 shirt boxes, 200 gift bags, 900 tie boxes, 3,100 trademarks and 3,400 tags bearing the above mentioned mark and graph.

In accordance with Article 52 of the Trademark Law of PRC and Article 52 of The Implementing Rules of the Trademark Law of PRC, on April 9, 2004, the Jiang Branch of Yangzhou local Administration of Industry and Commerce decided on the administrative penalty for SUE company, including a mandated cease of all infringement activities, confiscation and destruction of infringing products and a fine of 250 thousand RMB yuan.

 

Extremely Severe 9.26 Piracy Case in Nanjing

On 11th Nov 2004, the first instance by the people’s court of Gulou District in Nanjing sentenced Zhong Shan, the defendant, 4 years of imprisonment and a fine of 2 million yuan for copyright infringement crime, and 7 years’ jail and confiscation of 1 million yuan personal property for the crime of illegal business operation. The court decided to execute 10 years’ imprisonment, 2 million yuan’s fine and 1 million personal property confiscation. Zhong Jianei (Zhongshan’s father) was also deemed as a copyright violator and was sentenced 3 years in jail with 5 years on probation and a fine of 2 million yuan. Nanjing Xinhua Jiao Ke Jiao Software Development Co., Ltd. and Nanjing Haoyue Colorful Printing Co., Ltd. were both convicted of copyright violation and illegal business operation and were fined 10 million yuan.

In September 2002, at receiving the report that Nanjing Haoyue Colorful Printing Co, Ltd. was illegally printing High School Literature Textbook published by People’s Education Press, Jiangsu Copyright Bureau immediately organized the law enforcement staff to raid on the factory located in Baixia District in Nanjing together with the provincial porn purging office. At the spot, 105 items and 430,000 volumes of pirated books as well as more than 170 films used for printing were seized with other relevant evidence including computers, thus the bureau preliminarily obtained the fact that Zhong Shan and Zhong Jianei were suspected of engaging in piracy.

In order to investigate the case thoroughly, Jiangsu Copyright Bureau, anti pornographic and illegal publications offices and public security department jointly established a special group on this case. The investigation showed that Zhong Shan was the legal person of Nanjing Xinhua Jiao Ke Jiao Software Development Co., Ltd., and that Zhong Jianei was the responsible person in charge of the production and operation of Nanjing Haoyue Colorful Printing Co. Ltd. Since the end of 2002, Zhong Shan had pirated and illegally copied large quantity of middle and primary school textbooks and supporting teaching materials published by People’s Education Press. These books were sold in many provinces and cities through Xinhua Company without publication qualification. Zhong Shan also published primary and middle school supporting teaching materials in the name of China Youth Press. Through Zhang (dealt with separately), manager of Nanjing Book Joint Wholesale and Distribution Center, he signed contracts on book publication and sales with some publishing houses, traded book numbers, and illegally published books. In just two years, the variety of his publication and printing totaled 300 odd items, involving 15 presses and 28 printers with the sales covering about 100 units in 15 provinces. The time span, involved variety and quantity, scope and complication of this case all bear an unprecedented nature.

 

Cross-Border Sales of Pirated Duplications by Guthrie Criminal Gang

From June to July of 2004, under the direct leadership and guidance of the Department of Economic Crime Investigation (DECI) of the Ministry of Public Security (MPS) and thanks to its close cooperation with ICE of the United States, the Economic Crime Squad of Shanghai Public Security Bureau (PSB) successfully uncovered the case concerning the cross-border selling of pirated duplications headed by U.S. citizen Guthrie, involving as high as more than two million RMB yuan.

As of April 2004, DECI of MPS has forwarded leads underlining the suspected sale of pirated DVDs by Guthrie in Shanghai to the local PSB, having received them from the Beijing Office of ICE. The Economic Crime Squad of Shanghai PSB lost no time in setting up a specific task force to initiate investigations lasting for the ensuing two months, during which sufficient criminal evidences were gathered. On July 1, the task force launched a resolute action, arresting all eight suspects headed by Guthrie, storming three deposit points of pirated DVDs, confiscating 210 thousand pirated DVDs, a large number of mail packages and seven computers among the other criminal utilities and froze the accounts of illegal income valued at 220 thousand RMB yuan and 67 thousand US dollars respectively.

It is learned after interrogation that starting from November 2002, the suspects including Guthrie, based in Shanghai, had been accepting online orders from overseas customers. Each pirated DVD was sold at a price of three US dollars while the overseas buyers effectuated payment through such means as credit card transfer and West Union remittance. By the time the case was unearthed, this criminal gang has sold a total of 186 thousand pirated DVDs to overseas buyers, amassing illegal profit to the tune of 2.02 RMB yuan.

 

Massive Optical Disc Piracy in Liaoning Province, July 15

On March 19, 2004, the Public Security Bureau (PSB) of Shenyang, Liaoning Province has put under arrest criminal suspects of piracy Wang Jinsheng and accomplices Song Chundong and Liu Chunshui. This put an end to the case of optical disc piracy coded “July 15”. With a case value as high as two million RMB yuan, it is the biggest of its sort in northeast China during the recent years.

In June 2003, a business entity operating audio visual products submitted information to the Liaoning Provincial Bureau for Cultural Undertakings, alleging that Shenyang Jinsheng Audio Shop were stocking and selling in large quantity pirated optical discs imprinted with forged serial number of the informing enterprise while already serving as the source of local wholesale distribution. Provincial Bureau of Cultural Undertakings rightly communicated the information to the Economic Crime Squad of Shenyang PSB. The latter gathered substantial evidence proving the criminal activities of the shop owner Wang Jinsheng and other suspects through carefully planned and meticulously executed investigation and collection. On July 15, law enforcement officials initiated search of the Jinsheng Audio Shop and its four warehouses, uncovering and confiscating nearly 500 thousand pirated discs on the spot while arresting Wang Jinsheng’s wife Song and some suspects. Later on, acting on the information confessed by Song, they have unearthed another 70 thousand pirated optical discs that were stashed away in yet another warehouse.

Smelling foul, shop owner Wang Jinsheng and accomplices Sun Chundong and Liu Chunshui took to their heels. While launching emergent searches, the Shenyang PSB reported the development to the Ministry of Public Security (MPS). MPS listed this case into the category mandating ministerial supervision and issued a national arrest warrant for Wang Jinsheng by posting him online as amongst the most wanted escaped criminals. The law’s finely-woven meshwork is ubiquitous and overwhelming. After arduous and earnest efforts by the relevant agencies for public security, the three suspects were captured and transferred to the prosecuting authority in the end.

 

Two Beijing and Tianjin Companies Pirate Microsoft Products

On June 2004, Microsoft Corporation made a complaint to the State Copyright Bureau, accusing Beijing Central Press Union Co., Ltd. and Tianjin Minzu Compact Disc Company of illegally copying the “Legend Operating System Recovery Disk” without authorization from the copyright holder. Microsoft holds the copyright of the “Legend Operating System Recovery Disk”.

Upon receiving the complaint, the State Copyright Bureau immediately started investigation. According the investigation, Beijing Central Press Union, entrusted by Beijing Yanjing Tianbao Film and Culture Centre in the form of contract, made 55,000 copies of the “Legend Operating System Recovery Disk” from November 2001 to June 2003, making illegal profits of RMB10, 405 yuan. Tianjin Minzu Compact Disc Company, entrusted in the form of contract by and receiving the orders from Fang Xiaojun Science and Technological Company, made 4,000 copies of the “Legend Operating System Recovery Disk” in 2002. The above-mentioned two companies copied the compact discs without the authorization from the software copyright holder and thus violated the copyright of Microsoft Corporation.

In accordance with Article 24 under the “Regulation on the Protection of Computer Software”, the State Copyright Bureau gave Beijing Central Press Union an administrative penalty of RMB80, 000 yuan and confiscated all its RMB10, 405 yuan of illegal earnings; gave Tianjin Minzu Compact Disc Company an administrative penalty of RMB10,000 and confiscated all its RMB600 yuan of illegal earnings.

On 5 November 2004, Wu Jun, Han Ming, Wu Xiaojun, etc. who illegally entrusted the companies to copy the discs were convicted of doing illegal business operations and were given penalties ranging from 6 months in detention to 1 year imprisonment. They were also fined RMB 5,000 yuan to RMB 15,000 yuan respectively. Another entrusting person, namely Chen Fuqiang, was also captured and apprehended with approval.

 

The Case of Yibin Grace Co., Ltd. Patent Protection

By Oct 2004, through patent administrative enforcement coordination system, Sichuan Yibin Grace company signed contracts or settlement agreements on patent licensing of application with 5 enterprises including Shandong Weifang Hailong Co. Ltd., that had violated its new patent, and obtained 104.6 million yuan in compensation for patent infringement and licensing implementation. The successful settlement of this case provided helpful experience for China’s patent administrative enforcement coordination.

At the beginning of 2002, Grace found that almost 20 domestic textile enterprises including Shandong Hailong used its patented technology of “semi-continuous centrifugal spinning machine and its control structure” without licensing. The infringing companies formed a trend of group violation, inducing tremendous economic loss on Grace.

Under the circumstances where the warning did not take effect, Grace Co., Ltd. first petitioned the Intellectual Property Office (IPO) of Sichuan Province to look into the patent dispute case it had with Shandong Weifang Hailong Co., Ltd. According to investigation, the IPO of Sichuan Province did not have jurisdiction in the case because neither the residence of the petitioned or the location where the violation took place was within the administrative jurisdiction of Sichuan. However, according to the “Law Enforcement Coordination Agreement of Sixteen Provinces and Municipalities”, Sichuan IPO first accepted the case and then transferred it to the IPO of Shandong Province. With the concerted efforts of the IPOs of the two provinces, the two parties in question reached the following agreement: the petitioner agreed to permit, by way of general licensing, the petitioned to apply the patented technology at an license fee of RMB 3.5 million yuan. After that, Grace Co., Ltd. signed patent licensing contracts or settlement agreements with four other violators. Settlement with other violators is also under way.

2005-02-05

2005-02-05