April 20, 2017, Beijing People’s Higher Court published Top 10 typical judicial protection cases of 2016. Administrative litigation concerning “Wechat” trademark opposition Review and Wen Rui-an Kungfu Novels’ Adaptation Right and Unfair Competition Dispute, both represented by Unitalen, were among the list.

Administrative litigation Concerning “WeChat” Trademark Opposition Review

Attorneys at Law: Hou Yujing, Zhang Yazhou

Case Summary

Chuangbo Asia Pacific Technology (Shandong) Co., Ltd. (hereinafter referred to as “Chuangbo”) applied for registering trademark WeChat in respect of information transmission, and telephone services, etc. in Class 38. A natural person Zhang Xinhe raised opposition to the application on the grounds that 1) the opposed mark violates Paragraph 1 Clause 8, Article 10 of the Trademark Law, with ‘other negative influence’ and 2) the opposed mark violates Article 11 of the Trademark Law for lack of distinctiveness.

Trademark Office decided in 2013 that the opposed mark does not constitute lack of distinctiveness but is apt to mislead consumers and cause negative influence and hence denied the registration of the opposed mark. Trademark Review and Adjudication Board upheld the CTMO decision by stating that,1) whether a trademark will create any negative influence depends on the objective legal effect, other than the subjective state of the perpetrator; and 2) whether a conduct will damage social public interests and public orders depends not only on the de factor status at the time of trademark application but also the time when the decision is made. According to TRAB, although Tencent's WeChat software had not been officially launched when the opposed mark was filed, the registered user accounts of ‘WeChat’ had reached 400 million by July 2013, and many government agencies, courts, schools, banks have launched WeChat public service; the relevant public has associated WeChat with Tencent. If the opposed mark were to be approved for registration, great inconvenience and even losses would be brought to the registered WeChat users as well as the vast number of users of WeChat public service, who would misidentify the services provided by the opposed party under the “WeChat” mark, resulting in negative influences on social public interests and public orders.

While the TRAB decision was further upheld by Beijing IP court, Beijing Higher People's Court made a different ruling that the opposed mark does not violate Paragraph 1 Clause 8 of the Trademark Law, as the application of the opposed mark does not involve social public interests and public orders, but shall be refused for lack of distinctiveness.

On December 27, 2016, the Supreme People’s Court made a final ruling to dismiss the retrial request of Chuangbo. In this ruling, the Supreme Court did not comment on the application of the negative influence clause, but focused on the legality of the second-instance court’s switching to the distinctiveness clause to maintain the ruling of TRAB. The Supreme People’s Court believes that, although the judgment of first instance was focused on the clause of other negative influence only, the TRAB decision did comment on the distinctive clause, so the second-instance court’s ruling based on distinctiveness clause per request by the third party complies with Article 87 of the Administrative Litigation Law concerning the provision of ‘comprehensive review’.

Typical Significance:

This case affirms the judicial ‘comprehensive review’ principle in procedure, namely, in case of judicial review of a TRAB decision, the court shall review not only the grounds raised by the plaintiff but also the other grounds based on which the TRAB decision is made but not challenged by the other party, paying more attention to efficiency and saving judicial resources, so as to solve substantive disputes.

In substance, this case further tightens the scope of application of the "negative influence" clause specified in Clause 8, Paragraph 1, Article 1 of the Trademark Law, limiting the examination of "negative influence" to the trademark itself and its composing elements, instead of the influences that may be caused during actual use

Wen Rui-an Kungfu Novels’ Adaptation Right and Unfair Competition Dispute

Attorneys at Law: Hou Yujing, Run Chunde

Case Summary:

“Four Detectives” is the name of more than 100 Kungfu series novels created by the plaintiff, Wen Rui-an. The mobile card game “Da Zhang Men” developed by the defendant, Beijing Playcrab Technology Co., Ltd. (hereinafter referred to as “Playcrab”) adopted the same five main characters, including characters’ names, characters’ relationship, facial features, backgrounds, personalities, kungfu styles, which infringed on the adaptation right of the plaintiff’s series novels.  In addition, articles were on various game sites trying to associate “Da Zhang Men” with “Four Detectives”, which the plaintiff believed to have constituted unfair competition.

The court supported the plaintiff’s claim based on adaptation right as the five main characters are with high degree of originality and constitute the cornerstone of the ‘Four Detectives’ series novels. The copyright enjoyed by Wen Rui-an over his novels embodies the copyright over the original expression of the novels. The “Da Zhang Men” game presented the images of the five main characters of the ‘Four detectives’ series novels by way of online card game and thus infringed on Wen Rui-an’s adaptation right of his works.

The unfair competition claim, however, was not supported, as the court found the reports about “Da Zhang Men” game were composed by third parties and posted on third-party websites, which is not directly related to Playcrab company.

Eventually, the court made a ruling that Playcrab shall eliminate the influence and compensate Wen Rui-an for 800,000 yuan.

Typical Significance:

This case extends the definition of “expression” in Copyright Law to the character images including their background, martial arts styles, personality characteristics, and appearances, providing stronger protection to the adaptation right of literature against online games in the future.