Table of Contents
1. Severe Infringement of High-Value Trade Secrets Resulting in Maximum Compensation
—— Shengao Chemical Technology Co., Ltd. vs. Chen XX and Jin XX Chemical Co., Ltd. on Trade Secret Infringement
2. Breach of Confidentiality Obligations After Contract Termination Leading to Huge Compensation for Infringement of Traditional Chinese Medicine Trade Secrets
—— Nanjing Hanqi Pharmaceutical Technology Co., Ltd. vs. Di XX Pharmaceutical (Jiangsu) Co., Ltd. on Trade Secret Infringement
3. Rights Boundaries Between Open Source Code Owners and Secondary Developers
—— Wangjing Technology (Suzhou) Co., Ltd. vs. Yi XX Communication Technology Co., Ltd. et al. on Computer Software Copyright Infringement
4. Severe Penalties for Particularly Serious Infringement Activities
—— Panpan Door Industry Co., Ltd. vs. Xin Panpan Door Industry Co., Ltd. et al. on Trademark Infringement and Unfair Competition
5. Comprehensive Protection of Commercial Identifiers of Well-Known Enterprises in Border Areas to Promote the Construction of a National Unified Market
—— Xinjiang Wusu Beer Co., Ltd. vs. Nanjing Bird Su Beer Co., Ltd. et al. on Trademark Infringement and Unfair Competition
6. Providing Commercial Game Boosting Services Constitutes Unfair Competition
—— Tencent Technology (Chengdu) Co., Ltd. and Shenzhen Tencent Computer Systems Co., Ltd. vs. Ai XX Network Technology Co., Ltd. on Unfair Competition
7. Abuse of Intellectual Property to Surround and Block True Rights Holders Constitutes Unfair Competition
—— Shikang Protective Products Co., Ltd. vs. Yuan XX Information Technology Co., Ltd. et al. on Unfair Competition
8. Judicial Recognition of Evidence Validity in Trap Evidence Collection
—— Huang XX vs. Gui XX Home Products Factory on Infringement of Design Patent Rights
9. Criminal Protection of Copyright for Extracurricular Reading Materials for Primary and Secondary Schools such as “Naughty Bag Ma Xiaotiao”
—— Defendant Zhang XX for Copyright Infringement and Sale of Infringing Copies
10. Full-Chain Mechanized Illegal Manufacturing of Well-Known Cigarette Label Identifiers Constitutes a Serious Crime
—— Defendant Wu XX et al. for Illegal Manufacturing of Registered Trademark Identifiers
Case 1
Severe Infringement of High-Value Trade Secrets
Resulting in Maximum Compensation
—— Shengao Chemical Technology Co., Ltd. vs. Chen XX and Jin XX Chemical Co., Ltd. on Trade Secret Infringement
[Case Index]
First Instance: Jiangsu High Court (2019) Su Min Chu No. 34
Second Instance: Supreme Court (2022) Supreme Court Zhi Min Zhong No. 816
[Judgment Summary]
To determine whether the information involved is not known to the public, it is necessary to analyze the differences and similarities between the information and publicly known information, and whether it is a simple combination of publicly known information or general knowledge.
In the trial of trade secret cases, compensation can be determined based on the multiple of the reasonable licensing fee for the technical secret involved at the request of the rights holder.
If the technical secret involved includes technical information related to production equipment, and the infringer uses the technical information to manufacture infringing equipment for infringement, the infringing equipment is both the carrier of the technical secret and the product and tool of the infringement. To eliminate the risk of continued disclosure and use of the technical secret and to maintain the non-public nature of the technical secret, it is necessary to order the infringer to destroy the carrier of the technical secret. “Destruction” does not mean physical annihilation, but refers to substantial modifications to the production line, such as dismantling or altering, to remove the technical secret attached to the equipment, so that the equipment no longer has the attributes of a carrier of the technical secret.
[Basic Case Facts]
Shengao Chemical Technology Co., Ltd. (hereinafter referred to as Shengao) owns the “Nitrobenzene Method Synthesis RT-Peisi Process” (hereinafter referred to as RT-Peisi Process) and “Using RT-Peisi to Produce Rubber Antioxidant 4020 Process” (hereinafter referred to as 4020 Process). Xiang XX Chemical Co., Ltd. (hereinafter referred to as Xiang XX) and its legal representative and actual controller Chen XX stole Shengao’s technical processes by bribing Shengao’s technical personnel and used the stolen technology to modify and build production lines for RT-Peisi and 4020 antioxidant, producing RT-Peisi and 4020 antioxidant. Xiang XX was thus convicted of trade secret infringement and bore corresponding penalties. Subsequently, the company restructured and established Jin XX Chemical Technology Co., Ltd. (hereinafter referred to as Jin XX), which, along with its Lin Yi branch, continued to produce infringing products using the production line and stolen technology in the original Xiang XX factory. During the first instance litigation, Xiang XX applied for bankruptcy liquidation, and Shengao believed that the actions of Chen XX and Jin XX jointly infringed its trade secrets, requesting the court to order them to stop the infringement, destroy the infringing production equipment, and jointly compensate Shengao for losses of 201.54 million yuan and reasonable expenses of 469,542 yuan. During the first instance, the court made a preservation ruling based on Shengao’s application, ordering Chen XX and Jin XX to immediately stop the production and sale of RT-Peisi and 4020 antioxidant, and to seal the production equipment and paper, electronic, and other carriers related to the production technology of RT-Peisi and 4020 antioxidant. Chen XX and Jin XX refused to comply.
[Judgment Content]
The court held that the technical process involved had reasonable confidentiality measures, was not known to the public, and had commercial value, constituting a trade secret. Chen XX’s theft and use of the technical secret constituted infringement, and Jin XX, as the successor of Xiang XX, knowingly obtained and used the infringing equipment manufactured by Xiang XX through bribery and theft of the technical secret, which also constituted infringement; Chen XX, in order to continue his infringing activities, established Jin XX and should bear joint liability for Jin XX’s continued use of the technical secret. The court ruled that Chen XX and Jin XX stop the infringement, destroy the infringing equipment, and fully support Shengao’s claim for compensation (including losses of 201.54 million yuan and reasonable expenses of 469,542 yuan). Chen XX and Jin XX appealed against the first-instance judgment. The second-instance judgment upheld the orders to stop the infringement and compensate for losses, and explicitly required the destruction of the infringing equipment. During the second instance, the court imposed the maximum judicial penalties on Chen XX and Jin XX for refusing to comply with the first-instance court’s preservation ruling.
[Case Value]
This case was rated by the Supreme Court as one of the top ten influential cases in the five years since the establishment of the Intellectual Property Court, characterized by: First, the commercial value of the technical secret is high. The rights holder’s technical secret can significantly reduce pollutant emissions and greatly save operating costs, belonging to world-leading RT-Peisi and 4020 antioxidant technologies, with the rights holder being one of the largest producers of RT-Peisi and 4020 antioxidant globally. Second, the infringement behavior is extremely severe. The infringer not only improperly obtained the rights holder’s technical secrets through bribing employees and stealing drawings, but also applied for bankruptcy afterward, changed names to establish a new company, and used the stolen technical secrets to produce infringing products for huge profits. During the litigation, the infringer also attempted to obstruct the case by applying for investigations with the police under the pretext of bankruptcy jurisdiction and false litigation, and transferring major production equipment, trying to shift assets and evade responsibility. Third, the protection力度 is strong. The court ordered the infringer to stop producing and selling infringing products, destroy the infringing equipment, and fully supported the compensation request of 201.54 million yuan, setting a record for the highest compensation amount in judgments for trade secret infringement. At the same time, the court imposed maximum penalties on those who refused to comply with the court’s preservation ruling. Fourth, the guidance is strong. This case explored key and difficult issues in trade secret infringement disputes, clarified relevant judgment rules, such as the review standards for whether the secret point is not known to the public, and detailed the identification of commonly known and easily obtained situations, as well as the review standards for expert opinions in prior criminal proceedings and the handling of cross-disciplinary cases, especially clarifying the applicable situations and necessary limits for destroying infringing equipment, pointing out that “destruction” does not mean physical annihilation, but refers to stripping the rights holder’s legally protected technical secrets from the infringing equipment, so that the equipment no longer has the attributes of a carrier of the technical secret; in this process, it is also necessary to balance the conflict of interests between the rights holder’s intellectual property rights and the property rights of third parties existing on the infringing equipment.
Therefore, this judgment reflects the value orientation of increasing protection for highly creative technological achievements in China, severely punishing serious infringement behaviors, and making infringers pay a higher price, fully demonstrating the court’s determination and attitude to strictly protect intellectual property rights according to law and stimulate the innovative and creative vitality of the whole society. This case is a benchmark case for the protection of trade secrets and has textbook-like guiding significance.
Case 2
Breach of Confidentiality Obligations After Contract Termination
Leading to Huge Compensation for Infringement of Traditional Chinese Medicine Trade Secrets
—— Nanjing Hanqi Pharmaceutical Technology Co., Ltd. vs. Di XX Pharmaceutical (Jiangsu) Co., Ltd. on Trade Secret Infringement
[Case Index]
First Instance: Nanjing Intermediate Court (2019) Su 01 Min Chu No. 3444
Second Instance: Supreme Court (2021) Supreme Court Zhi Min Zhong No. 2268
[Judgment Summary]
In the trial of trade secret infringement cases, determining whether the information involved is not known to the public should pay attention to the relationship between the overall and the part of the secret point, as well as the relationship between purpose and means, examining the combination, coordination, and dependence of a single secret point with the overall technical information and other information, and should not interpret a single secret point or its details out of context from the entire technical information.
If the rights holder has delivered or disclosed specific technical secret carriers to the accused infringer based on an agreement or transaction, and the accused infringer cannot provide evidence that it had obtained the technical information through other legitimate means before the rights holder delivered the carrier, it should generally be recognized that the party that delivered or disclosed the technical secret is the legitimate rights holder of that technical secret. Whether specific technical information has secrecy or public knowledge should be proven by the party claiming that the technical information is publicly known.
When the parties agree on the amount of damages for infringement, it is a calculation method they reach in advance regarding the benefits obtained or losses caused by future infringement. If there are no legal provisions for invalidity, the court can determine the amount of damages based on that agreement.
[Basic Case Facts]
Nanjing Hanqi Pharmaceutical Technology Co., Ltd. (hereinafter referred to as Hanqi) signed a cooperation contract with Di XX Pharmaceutical (Jiangsu) Co., Ltd. (hereinafter referred to as Di XX), agreeing that the former would provide the latter with the process technology for producing mushroom polysaccharide raw materials and formulations; the latter could only sell the mushroom polysaccharide products, raw materials, and formulations produced to the distributors or manufacturers designated in writing by the former. If it sold independently or entrusted others to sell, it should compensate the former 20 million yuan and other losses. Both parties agreed to keep the project technical results confidential. Hanqi delivered the agreed technical results to Di XX as agreed, and Di XX also obtained the registration approval for the “mushroom polysaccharide” raw materials. After the parties terminated the cooperation contract, Di XX transferred the “mushroom polysaccharide production technology” for 1 million yuan to Ying XX Biopharmaceutical Co., Ltd. (hereinafter referred to as Ying XX), which produced “mushroom polysaccharide” raw materials. Ying XX’s website recorded, “The ‘mushroom polysaccharide’ raw material production line has officially started production… After production, the annual output value will exceed 100 million yuan.” Hanqi sued the court, believing that Di XX’s transfer of its technical secrets to others and profiting greatly constituted infringement of its trade secrets, and requested compensation of 20 million yuan from Di XX as agreed.
[Judgment Content]
The court held that the technical results delivered by Hanqi to Di XX constituted trade secrets. After the termination of the cooperation, Di XX had a statutory or agreed confidentiality obligation, and the technology transferred to Ying XX by Di XX, which Ying XX used to produce mushroom polysaccharides, was substantially the same as the technical secrets delivered by Hanqi to Di XX. Di XX constituted illegal disclosure and allowed others to use the technical secrets involved, infringing Hanqi’s trade secrets. There are no legal prohibitions against parties agreeing on the amount of damages for infringement. The agreement on the amount of damages for future infringement has positive effects such as overcoming evidentiary difficulties, simplifying the determination of compensation amounts, enhancing predictability of actions, and reducing litigation burdens. The agreed amount of compensation in this case is legal and valid and covers the accused infringement behavior. Ying XX’s use of the technical secrets involved gained huge profits, and Di XX repeatedly violated the principle of good faith during the cooperation with Hanqi, so there are no circumstances for reducing the compensation amount, and the compensation amount should be determined according to the agreed standard. Therefore, the court ruled that Di XX should compensate Hanqi for losses of 20 million yuan.
[Case Value]
This case involves the protection of traditional Chinese medicine trade secrets and clarifies the basic ideas and evidentiary rules for the trial of trade secret cases, determining that the infringer should compensate the rights holder 20 million yuan for infringing the trade secrets due to failure to fulfill confidentiality obligations after the contract was terminated, based on the pre-agreed standard for damages. This case is a textbook case for the trial of trade secret infringement cases. First, it clarifies the trial ideas for trade secret infringement cases, focusing on the issues of subject matter, behavior, and responsibility, and clarifying the dialectical relationship between specific secret points and overall technical information, as well as the relationship between related information. It also determines the burden of proof for the infringer to deny secrecy. Second, it promotes the value of integrity and commitment. The judgment emphasizes the independence of confidentiality obligations after the contract is terminated. Violating confidentiality obligations by illegally disclosing and transferring trade secrets to others and allowing others to use them constitutes infringement of others’ trade secrets. In response to the defendant’s repeated serious and intentional breaches, the judgment determined the compensation amount according to the pre-agreed standard of 20 million yuan, reflecting the value orientation of advocating integrity and keeping promises.
Case 3
Rights Boundaries Between Open Source Code Owners and Secondary Developers
—— Wangjing Technology (Suzhou) Co., Ltd. vs. Yi XX Communication Technology Co., Ltd. et al. on Computer Software Copyright Infringement
[Case Index]
First Instance: Suzhou Intermediate Court (2018) Su 05 Min Chu No. 845
Second Instance: Supreme Court (2021) Supreme Court Zhi Min Zhong No. 51
[Judgment Summary]
The subject of the GPL agreement is the program protected by copyright under the GPL agreement and the derivative products or modified versions based on that program, but it cannot be simply assumed that all software related to that program must be open source. The copyright ownership of software developed based on open source frameworks should distinguish different situations. Modifications, optimizations, and developments based on the functions of open source products should determine copyright ownership according to the open source agreement, but if only calling open source products or conducting secondary development based on open source products, and the developer’s creative labor is sufficient to constitute an independent work, the developer enjoys independent copyright.
The secondary developer’s violation of the open source software agreement is independent of whether they enjoy software copyright and whether they can exercise infringement remedies against others; otherwise, it would unreasonably deprive or restrict the software developer’s copyright based on their original contributions.
[Basic Case Facts]
OpenWRT is a system operating control software in the communication field, and its source code is available for free use by software developers, applicable under the “GNU General Public License (Version 2)” (i.e., “GPLv2”). Wangjing Technology (Suzhou) Co., Ltd. (hereinafter referred to as Wangjing) developed the involved “OfficeTen1800” software based on OpenWRT, including the underlying system formed by adding, deleting, modifying, and adjusting the source code corresponding to the OpenWRT system software, as well as the upper functional system formed by the newly added source code corresponding to the specific functions of the involved software. Yi XX Communication Technology Co., Ltd. (hereinafter referred to as Yi XX) recruited former employees of Wangjing to develop similar software that is substantially similar to the involved software by copying and modifying the source code of the involved software, which contained special markings of Wangjing’s source code. Yi XX and Qi XX Company (hereinafter referred to as Qi XX) are closely related in personnel, funds, and project management, and there is a commonality in goals, behaviors, and interests in the software development and copying process. Wangjing sued Yi XX, Qi XX, and some former employees of Wangjing for infringing its computer software copyright, requesting the defendants to stop the infringement and compensate for losses of 3 million yuan.
[Judgment Content]
The court held that Wangjing’s “OfficeTen1800” intelligent gateway software, which was developed based on open source software, has originality and should be protected by copyright. Qi XX’s evidence only proves that the involved gateway software contains open source code, but does not prove that the software is merely using the open source code (adding, modifying, or deleting), and the source code of the involved software is not public, so there is no prerequisite for Qi XX to use third-party open source programs and build derivative software products under the GPLv2 agreement. Whether Wangjing violated the open source software agreement is independent of whether it enjoys software copyright; otherwise, it would unreasonably deprive or restrict the software developer’s copyright based on their original contributions. Even if Wangjing’s software has rights defects due to violating the GPLv2 agreement, or Wangjing has not publicly disclosed the involved software source code for others to obtain and use for free, it does not affect its legal responsibility to claim software copyright infringement against the defendants. Therefore, Yi XX and Qi XX’s copying, modifying, and distributing the involved software infringed Wangjing’s software copyright. In calculating the infringement losses, the originality of Wangjing’s secondary development should be considered in proportion to the overall software work, reasonably stripping the already open source parts from the OpenWRT system software. Considering the high similarity between the accused software and the involved software, and their direct competition in the relevant market, as well as the fact that the developers of the accused software were once employed by Wangjing, it is necessary to eliminate the negative commercial impact of the accused software on the involved software and restore the relevant market’s recognition of the involved software and its operating entity, Wangjing. Therefore, the court ruled that both companies stop the infringement, eliminate the impact, and jointly compensate Wangjing 500,000 yuan. However, it should be noted that the final determination of the accused behavior constituting infringement and the support for part of Wangjing’s claims do not indicate that Wangjing can be exempt from its obligations in potential breach and/or infringement lawsuits in the future.
[Case Value]
This case clarifies the copyright ownership of software developed based on open source software, the control scope of the GPL agreement, the identification of infringement when others use secondary developed works, and the determination of damage compensation, having guiding and industry normative significance. It was rated as one of the top 100 typical cases in the five years since the establishment of the Intellectual Property Court by the Supreme Court. The court’s official WeChat account and the “People’s Court Daily” reported on this case. The adjudication rules for open source software cases are still being explored and developed. Accurately grasping the binding force of open source licensing agreements and reasonably defining the rights boundaries between open source code owners and software secondary developers are of great significance for encouraging innovation and promoting the healthy and standardized development of the software industry. The judgment clearly states that developers enjoy copyright for new works formed by merely calling open source products or conducting secondary development based on open source products that have originality, and whether secondary developers violate open source software agreements is independent of whether they enjoy software copyright and can exercise infringement remedies against others. In determining damage compensation, the proportion of the secondary development part in the overall software work should be considered, reasonably stripping the already open source parts from the prior open source software. The judgment establishes that secondary developed software is relatively independent and is not necessarily and completely bound by mandatory open source rules, fully respecting and protecting the original labor of secondary developers, providing a “sense of security” for software developers.
Case 4
Severe Penalties for Particularly Serious Infringement Activities
—— Panpan Door Industry Co., Ltd. vs. Xin Panpan Door Industry Co., Ltd. et al. on Trademark Infringement and Unfair Competition
[Case Information]
First Instance: Jiangsu High Court (2018) Su Min Chu No. 38
Second Instance: Supreme Court (2022) Supreme Court Min Zhong No. 209
[Judgment Summary]
If a person engages in infringement as a business and the infringement is particularly serious, punitive damages may be applied at the request of the rights holder, determining a higher punitive multiple to significantly increase the cost of infringement. This can be determined based on relevant data in the infringer’s website, promotional materials, and the average profit margin in the industry.
[Basic Case Facts]
Panpan Door Industry Co., Ltd. (hereinafter referred to as Panpan) owns famous trademarks such as “Panpan”. Zhou XX had business dealings with Panpan and was aware of the fame and influence of Panpan’s trademark, yet registered Xin Panpan Door Industry Co., Ltd. (hereinafter referred to as Xin Panpan) and held 99% of the shares. Xin Panpan, Gu XX Metal Door Factory (hereinafter referred to as Gu XX), and others prominently used “Xin Panpan”, “XPP Xin Panpan”, “XPP”, and other identifiers in their production and sales of security doors and other metal door and window products and packaging, as well as in their domain names, official websites, WeChat public accounts, WeChat mini-programs, apps, and in their nationwide exclusive stores and experience centers, engaging in false advertising and commercial defamation against Panpan, intentionally causing public confusion and misrecognition. Therefore, Panpan sued the court, believing that Xin Panpan, Gu XX, Zhou XX, and others constituted trademark infringement and unfair competition, requesting them to stop the infringement, change the name, eliminate the impact, and compensate for losses of 100 million yuan.
[Judgment Content]
The court held that the actions of Xin Panpan, Gu XX, Zhou XX, and others constituted infringement of Panpan’s exclusive trademark rights and engaged in unfair competition by using Panpan’s well-known trademarks and engaging in false advertising and commercial defamation. Gu XX, operated by Zhou XX, is the commissioned manufacturer of Xin Panpan. Zhou XX intentionally attached himself to the fame and influence of Panpan’s trademark, registered an infringing company, and profited greatly from the infringing business. Considering that Xin Panpan, Gu XX, Zhou XX, and others engaged in trademark infringement and multiple unfair competition behaviors by copying and imitating Panpan’s well-known trademarks or their main parts, with significant profits from infringement, clear intent to infringe, and particularly serious circumstances, the court determined to apply a punitive compensation of four times the amount and ordered the defendants to immediately stop the infringing behavior and unfair competition, change the name, cancel the domain name, publicly announce the elimination of the impact, and compensate Panpan for losses of 100 million yuan and reasonable expenses of 650,000 yuan.
[Case Value]
This case is a typical example of the strict protection of intellectual property rights, actively applying punitive damages to increase the protection of well-known trademarks and famous names, and is also the case with the highest amount of punitive damages applied in the country. The judgment targets infringers who deliberately imitate Panpan’s well-known trademarks across multiple fields, with clear malicious intent, serious circumstances, and significant consequences, legally determining a high multiple of punitive damages, fully supporting the rights holder’s claim for 100 million yuan and reasonable expenses of 650,000 yuan, reflecting the value orientation of severely punishing serious malicious infringement behaviors, significantly increasing the cost of infringement, and strictly protecting intellectual property rights, which helps create a first-class business environment that is market-oriented, law-based, and internationalized, having a wide impact in the industry.
Case 5
Comprehensive Protection of Commercial Identifiers of Well-Known Enterprises in Border Areas
To Promote the Construction of a National Unified Market
—— Xinjiang Wusu Beer Co., Ltd. vs. Nanjing Bird Su Beer Co., Ltd. et al. on Trademark Infringement and Unfair Competition
[Case Index]
First Instance: Nanjing Intermediate Court (2022) Su 01 Min Chu No. 1207
Second Instance: Jiangsu High Court (2023) Su Min Zhong No. 986
[Judgment Summary]
Knowing the fame and influence of the industry peers’ names, yet still creating and using highly similar names constitutes unfair competition.
Maliciously registered trademarks are declared invalid, and their use before invalidation constitutes infringement.
In the absence of contrary evidence, the manufacturer information clearly marked on the accused infringing products should be used as the basis for identifying the producer of the products. If there is a processing relationship between the infringer, even if one party admits to using the other party’s identity and business information, it cannot be used to determine that the business information was misused without corresponding evidence.
[Case Facts]
Xinjiang Wusu Beer Co., Ltd. (hereinafter referred to as Wusu) owns registered trademarks such as “Wusu”, “Wusu Beer WUSU”, and “Wusu Beer WUSU and Figure”. Wusu has long used the packaging decoration of “Red Can Wusu Beer 500ml” on its produced and sold Wusu beer. After years of promotion and publicity, Wusu beer has a high reputation in the beer market and has become a famous product in Xinjiang. Zong XX (Tianjin) Trading Co., Ltd. (hereinafter referred to as Zong XX) registered the “Bird Su NIAOSU” trademark in 2019, but it was declared invalid by the National Intellectual Property Administration due to its similarity to Wusu’s involved trademarks. Wusu discovered that Kai XX Trading Co., Ltd. (hereinafter referred to as Kai XX) was selling beer marked with “Bird Su NIAOSU” and the words “Produced by Bird Beer (Nanjing) Co., Ltd., Entrusted by Zong XX, and Received by Xin XX Beer Co., Ltd., Mai XX Beer Co., Ltd.” and sued the aforementioned parties, believing that the use of the “Bird Su NIAOSU” identifier and the packaging decoration similar to Wusu’s beer constituted trademark infringement and unfair competition, requesting the defendants to stop the infringement, compensate for losses, and reasonable maintenance costs of 2.08 million yuan.
[Judgment Content]
The court held that Wusu’s registered trademarks, packaging decoration, and names have high recognition, influence, and market identification in the beer industry due to long-term use and promotion. The accused infringing beer’s use of the “Bird Su Beer NIAOSU” identifier and packaging decoration is similar to Wusu’s registered trademarks and packaging decoration, which is likely to cause confusion or misrecognition. Bird Su Company was established much later than Wusu, and before that, Wusu’s business name “Wusu” already had high recognition and influence. As a peer in the industry, Bird Su Company should have known the fame and influence of Wusu and still registered the “Bird Su” name, indicating a clear intent to “ride on the coattails”. Although Zong XX once registered the “Bird Su Beer NIAOSU” trademark, it has been declared invalid by the National Intellectual Property Administration. In the absence of effective contrary evidence, it should be recognized that Mai XX and Xin XX are the entrusted processors of the accused infringing products. Kai XX sold infringing products but did not appear in court to participate in the litigation and provide evidence, thus bearing the adverse consequences of failing to respond and provide evidence. The court ruled that the defendants constituted trademark infringement and unfair competition, ordering them to stop the infringement, compensate for losses and reasonable maintenance costs of 2.08 million yuan, eliminate the impact, and that Bird Su Company stop using the “Bird Su” name, with Kai XX bearing joint liability for 8,000 yuan.
[Case Value]
This case is a typical example of strictly punishing all-around infringement of well-known enterprises’ registered trademarks, product packaging, and business names in border areas. The infringer maliciously registered and used the trademarks, names, and other commercial identifiers of well-known enterprises, causing market confusion. The first and second instance courts treated different regional market entities equally, providing comprehensive protection for well-known enterprises and brands, strictly protecting them, and fully supporting the compensation requests, effectively curbing parasitic and predatory behaviors that exploit the commercial reputation and product reputation accumulated by others through hard work. This enhances the rights holders’ confidence in protecting intellectual property rights and investing in business, which is significant for promoting the construction of a national unified market, ensuring fairness in rules, opportunities, and rights for various market entities, stabilizing market expectations, advocating integrity and fair competition, and optimizing the legal business environment.
Case 6
Providing Commercial Game Boosting Services
Constitutes Unfair Competition
—— Tencent Technology (Chengdu) Co., Ltd. and Shenzhen Tencent Computer Systems Co., Ltd. vs. Ai XX Network Technology Co., Ltd. on Unfair Competition
[Case Index]
First Instance: Nanjing Intermediate Court (2022) Su 01 Min Chu No. 555
Second Instance: Jiangsu High Court (2023) Su Min Zhong No. 280
[Judgment Summary]
1. Game boosting companies and game operators conduct business activities based on the same game users and products, and the boosting services directly target the game products operated by the game operator, affecting the operator’s business and competitive rights, creating a factual competitive relationship.
2. Commercially and scale-wise providing boosting services violates industry behavior norms and business ethics, leveraging the popularity and user stickiness of others’ games, as well as the restrictions on minors’ gaming time and the prohibition on account lending, to gain competitive advantages, obtaining illegal benefits, disrupting fair competition order in gaming, harming the legitimate rights and interests of game operators and users, and potentially leading to minors’ addiction to games and other legal, moral risks, and other instability factors, constituting unfair competition.
[Basic Case Facts]
Tencent’s “Honor of Kings” game is highly recognized. The user agreement of the game stipulates that game accounts cannot be lent to others, including for commercial use such as boosting. The game enforces real-name verification for all users, and users under 18 are restricted by an anti-addiction system, only allowed to play during specific times, and with limited recharge amounts. The official website of “Honor of Kings” clearly states the penalties for third-party assistance in boosting players’ ranks and achieving corresponding achievements. Well-known gaming service companies such as NetEase, 360, Blizzard (USA), and KONAMI (Japan) all explicitly prohibit lending game accounts for commercial purposes and boosting.
Ai XX Network Technology Co., Ltd. (hereinafter referred to as Ai XX) mainly provides matchmaking services for boosting in the “Honor of Kings” game. Its operated “E-sports Help” platform extracts boosting fees from registered users as commissions, with monthly revenue of 3-4 million yuan. Users registered with the identity information of minors can log in to the “E-sports Help Master” APP to accept boosting orders from adult players. The “E-sports Help” and “E-sports Help Master” APPs have accumulated download volumes of 13.3756 million and 1.3176 million, respectively. Tencent believes that Ai XX’s boosting behavior constitutes unfair competition and thus sued in court, requesting it to stop the boosting behavior and compensate for losses.
[Judgment Content]
The court held that both parties are operators in the internet gaming service industry, and their businesses are interrelated, creating a factual competitive relationship. Ai XX’s behavior violates the industry norms and business ethics recognized in the gaming industry, including the real-name registration of online game accounts, the prohibition on privately lending accounts, and the prohibition on boosting and anti-addiction measures. Ai XX’s provision of boosting transaction opportunities and information for “Honor of Kings” is essentially providing assistance for users to cheat, undermining the voluntary, fair, just, and honest competitive mechanism in the online gaming industry; the participation of boosters with levels exceeding the real levels also increases the failure rate for normal users, leading to a false experience, causing users to question the fairness of the game, thus reducing participation, leaving the game, or even hiring others to boost, which has a significant negative impact on Tencent’s commercial reputation and game operations, and may impact the entire gaming industry. At the same time, Ai XX’s behavior allows minors to register accounts with adult identity information without restrictions on time and duration, rendering the “anti-addiction” protection mechanism ineffective, harming minors’ physical and mental health. The existence of account registration and lending under others’ names associated with boosting may also lead to various moral, legal risks, and instability factors, harming public interests. Therefore, Ai XX’s behavior constitutes unfair competition, and the court ruled that it should stop the unfair behavior, eliminate the impact, and compensate for losses of 600,000 yuan.
[Case Value]
This case is the first domestic case where commercial game boosting constitutes unfair competition. The internet live-streamed trial attracted over 30 million netizens’ attention, and after the judgment, the judges entered a television studio to deeply interpret the judgment’s reasoning, generating widespread social impact. The judgment clarifies that operators providing commercial scale boosting services violate industry-recognized norms and business ethics, adversely affecting the gaming industry and leading to the collapse of the anti-addiction mechanism for minors, harming public interests, thus constituting unfair competition, helping to delineate the boundaries of legitimate and illegitimate boosting in gaming, guiding internet gaming companies to operate in compliance, fulfill their social responsibilities for minors’ “anti-addiction”, maintain fair competition mechanisms in the gaming industry, and promote the healthy and standardized development of the industry.
Case 7
Abuse of Intellectual Property to Surround and Block True Rights Holders
Constitutes Unfair Competition
—— Shikang Protective Products Co., Ltd. vs. Yuan XX Information Technology Co., Ltd. et al. on Unfair Competition
[Case Index]
First Instance: Suzhou Intermediate Court (2020) Su 05 Min Chu No. 679
Second Instance: Jiangsu High Court (2021) Su Min Zhong No. 2452
[Judgment Summary]
The accused infringer, during cooperation with the rights holder, maliciously registered the well-known trademarks and works it had previously used as trademarks, and through infringement lawsuits, complaints to administrative agencies, industry associations, e-commerce platforms, improper registration of WeChat public accounts, commercial defamation, and maliciously registering and hoarding trademarks, comprehensively attacked the trademark rights holder, with clear subjective malice and serious circumstances, constituting unfair competition by abusing intellectual property.
[Basic Case Facts]
Shikang Protective Products Co., Ltd. (hereinafter referred to as Shikang) is a professional manufacturer of respiratory protective products, having long used the brand “MASkin” and owning registered trademarks such as “maskin” and “BENEHAL”, which have high recognition. Yuan XX Information Technology Co., Ltd. (hereinafter referred to as Yuan XX) maliciously registered the “MASkin” trademark during its cooperation with Shikang. After the cooperation broke down, Yuan XX initiated three lawsuits for copyright infringement and trademark infringement against Shikang based on the “MASkin” trademark, made more than three complaints to the Market Supervision Administration, industry associations, and e-commerce platforms, and also registered the “MASkin” and “BENEHAL” WeChat public account names, publishing misleading statements against Shikang on the account. Moreover, the legal representative and controlling shareholder of Yuan XX, Xu XX, used the registered trademarks to negotiate with Shikang in a threatening manner. Additionally, after the “MASkin” trademark was declared invalid for the products related to masks, Yuan XX and its affiliated company, Hang XX Supply Chain Management (Shanghai) Co., Ltd. (hereinafter referred to as Hang XX), continued to register more than 16 trademarks such as “MASkin”, “Su Shikang”, “Zhou Shikang”, “BENEHAL”, and “BILIHAO”. These actions caused Shikang’s mask products to face operational difficulties and incurred significant time, manpower, and material costs for rights protection. Therefore, Shikang sued Yuan XX, Hang XX, and Xu XX, requesting to stop the unfair competition behavior and jointly compensate Shikang for losses and reasonable expenses of 3 million yuan.
[Judgment Content]
The court held that the defendants, knowing that Shikang had long used the “MASkin” identifier, maliciously registered it as a trademark. Their actions of initiating intellectual property infringement lawsuits, complaints to administrative agencies, industry associations, and e-commerce platforms lacked factual and legal basis, and were aimed at harming Shikang’s interests or seeking improper benefits, objectively violating competition rules, disrupting competition order, and harming Shikang’s legitimate interests, constituting malicious rights protection by abusing intellectual property. Yuan XX’s registration of the “MASkin” and “BENEHAL” WeChat public account names lacked a legitimate rights basis, indicating malice in seeking improper benefits and creating obstacles for Shikang’s operations. The defendants’ actions of registering and using trademarks identical or similar to Shikang’s well-known trademarks and names, and negotiating with Shikang in a threatening manner to seek improper benefits, caused operational difficulties for Shikang’s related products, disrupted the trademark registration management order and competition order. The defendants’ actions of publishing false statements on WeChat public accounts without judicial or administrative recognition of the rights protection disputes harmed Shikang’s commercial reputation and product reputation, constituting commercial defamation. All of the above actions constitute unfair competition, and the three defendants are jointly liable for infringement and should legally stop the infringement and eliminate the impact. The court fully supported Shikang’s claim for 3 million yuan in damages, considering the nature of the unfair competition behavior, the damage consequences, and the subjective malice of the perpetrators.
[Case Value]
This case is a rare example of maliciously initiating intellectual property lawsuits, maliciously complaining to administrative agencies, industry associations, e-commerce platforms, improperly registering WeChat public accounts, commercial defamation, maliciously registering and hoarding trademarks, all constituting a case of abuse of intellectual property and unfair competition. The court’s judgment effectively regulates the infringer’s behavior of comprehensively blocking and whitewashing the true rights holder under the guise of commercial cooperation, firmly upholding the legal spirit of “the law cannot yield to the unlawful”, maintaining honest and trustworthy trading order, and promoting core values. At the same time, the judgment implements the strictest protection of intellectual property rights, fully supporting the rights holder’s claim for 3 million yuan in damages, making malicious rights holders and malicious rights protectors pay a heavy price; and innovatively ruling that the perpetrators must change their WeChat public accounts, stop malicious lawsuits, complaints, and registrations, effectively preventing and regulating future potential unfair competition behaviors, which is beneficial for maintaining the trademark registration management order and fair competition in the market.
Case 8
Judicial Recognition of Evidence Validity in Trap Evidence Collection
—— Huang XX vs. Gui XX Home Products Factory on Infringement of Design Patent Rights
[Case Index]
First Instance: Zhenjiang Intermediate Court (2022) Su 11 Min Chu No. 220
Second Instance: Jiangsu High Court (2023) Su Min Zhong No. 114
[Judgment Summary]
The accused infringer did not originally produce or sell infringing products, but after being induced by the rights holder, purchased infringing products and sold them to the rights holder, and the evidence obtained from this sale does not have evidentiary validity.
[Basic Case Facts]
Huang XX is the holder of a design patent for a certain “USB flash drive”. After authorization, he had not yet produced the involved patented product and had not licensed others to use the involved patent. On November 29, 2021, the evidence collector commissioned by Huang XX inquired with the customer service of Gui XX Home Products Factory on the 1688 platform whether there was a product named “Creative Pattern USB Flash Drive Retro”, stating that the previously saved link could not be opened, and sent a picture of the involved accused infringing product’s appearance. The customer service confirmed availability and sent the product link 24 minutes later. On December 2, the evidence collector ordered one of the above products. On the same day, the factory purchased a “Creative Pattern USB Flash Drive Retro Practical Gift Collection” from the Pinduoduo platform, with the delivery address being the one reserved by the evidence collector when placing the order. Upon comparison, the appearance of the accused infringing product had slight differences from the corresponding USB port front end of Huang XX’s involved patent, with no significant differences in other aspects, constituting a similar design. Huang XX sued the court claiming that the factory infringed his design patent rights based on this evidence.
[Judgment Content]
The court held that both parties acknowledged that Gui XX Home Products Factory had not sold or promised to sell (display) the accused infringing product except for the one sold during Huang XX’s evidence collection. Huang XX failed to provide evidence of the product link he claimed to have saved and the source of the USB flash drive image sent to customer service as required by the court. Huang XX repeatedly used the same method for evidence collection. It can be determined that Gui XX Home Products Factory originally did not sell or promise to sell the accused infringing product, and only purchased the infringing product and sold it to the evidence collector after being induced by the evidence collector’s purchase request, sending product names and images. Huang XX’s use of the “intent-induced” evidence collection method violates the principle of good faith and harms the legitimate rights and interests of others, and the corresponding evidence should be excluded. His claim that Gui XX Home Products Factory infringed the involved design patent rights lacks factual basis, and thus the court dismissed the case.
[Case Value]
This case is a typical example of clarifying the evidentiary validity of “trap evidence”. In practice, some parties or agents engage in “trap evidence” situations. There are two types of “trap evidence”: one is “opportunity-providing type”, where the accused infringer is already engaged in producing and selling infringing products, but due to the difficulty of discovering or obtaining evidence, the rights holder, to discover, investigate, or prove infringement, self-initiates or commissions others to purchase infringing items under the guise of an ordinary buyer to obtain evidence such as physical items and receipts. The second is “intent-induced type”, where the accused infringer originally does not engage in producing and selling infringing products, but is induced by the rights holder, and only based on the rights holder’s evidence collection behavior, generates the motive to sell infringing products. This judgment clarifies that the accused infringer only purchased infringing products and sold them to the rights holder based on the rights holder’s inducement, and the evidence obtained from this does not have evidentiary validity, reflecting the value orientation of guiding parties to protect their rights through legitimate and proper procedures, promoting the core socialist values, and having guiding significance for similar cases.
Case 9
Criminal Protection of Copyright for Extracurricular Reading Materials for Primary and Secondary Schools such as “Naughty Bag Ma Xiaotiao”
—— Defendant Zhang XX for Copyright Infringement and Sale of Infringing Copies
[Case Index]
First Instance: Shuyang Court (2023) Su 1322 Criminal Initial No. 101
[Case Facts]
Since June 2020, defendant Zhang XX, for profit, without the permission of the copyright owner and publisher, commissioned a printing factory to illegally print popular extracurricular reading materials for primary and secondary schools, such as “Naughty Bag Ma Xiaotiao”, “Ai Qing Poetry Selection”, “Morning Flowers Evening Harvest”, and provided some electronic versions and paper to the printing factory for printing. Defendant Zhang XX paid a total of more than 18.28 million yuan for printing pirated books, illegally printing more than 3.57 million copies. The public security organs seized 11,665 copies of 79 types of books from defendant Zhang XX, all of which were identified as illegal publications. In addition to the books seized by the public security organs, the other pirated books were all sold by defendant Zhang XX at a markup. Additionally, due to the need for pirated books to be printed in time, defendant Zhang XX knowingly purchased more than 100,000 copies of extracurricular reading materials such as primary and secondary school books from Gu XX, knowing they were pirated books, paying 751,600 yuan, and later selling them all.
[Judgment Content]
The court held that defendant Zhang XX, for profit, copied and distributed the copyright owner’s literary works without permission, with the number of infringing copies reaching over 3.5 million, and the illegal operating amount exceeding 18.2 million yuan, with particularly serious circumstances, constituting the crime of copyright infringement; for profit, knowingly purchasing and selling infringing copies without the copyright owner’s permission, with a sales amount of over 750,000 yuan, with serious circumstances, constituting the crime of selling infringing copies. Defendant Zhang XX committed multiple crimes, and the sentences should be combined. The defendant had mitigating circumstances such as confession, acceptance of punishment, and returning part of the funds, and thus was given a lighter punishment. Accordingly, defendant Zhang XX was sentenced to five years and four months in prison for copyright infringement and fined 4 million yuan; for selling infringing copies, he was sentenced to seven months in prison and fined 400,000 yuan. The sentences were combined, resulting in a total of five years and six months in prison and a fine of 4.4 million yuan. The defendant did not appeal after the verdict.
[Case Value]
This case is a joint case supervised by the provincial “Crackdown on Pornography and Illegal Publications” working group and the provincial public security department. The types of pirated books involved are numerous, all of which are popular extracurricular reading materials for primary and secondary schools, with the number of infringing copies reaching over 3.57 million and the illegal operating amount exceeding 18 million yuan, seriously infringing the legitimate rights and interests of copyright owners and the national copyright management system, disrupting the local book market order, and causing a considerable adverse social impact. The court’s decision to impose a five-year and six-month prison sentence on defendant Zhang XX reflects the severity of the crackdown and determination to effectively deter and curb copyright violations in the book market, fully demonstrating the judicial protection of intellectual property rights in the book field, guiding all sectors of society to strengthen and pay attention to the protection of intellectual property rights, and regulating the book market to maintain healthy and orderly development.
Case 10
Full-Chain Mechanized Illegal Manufacturing of Well-Known Cigarette Label Identifiers Constitutes a Serious Crime
—— Defendant Wu XX et al. for Illegal Manufacturing of Registered Trademark Identifiers
[Case Index]
First Instance: Huishan Court (2023) Su 0206 Criminal Initial No. 69
Second Instance: Wuxi Intermediate Court (2023) Su 02 Criminal Zhong No. 203
[Case Facts]
From early March 2022 to the end of June 2022, defendants Wu XX, Li XX, and others conspired, with Wu XX providing funds to rent factories, contact the purchase of some machinery, equipment, and raw materials, while Li XX and others were responsible for manufacturing the counterfeit registered trademark identifiers for cigarette boxes designated by Wu XX. Among them, Li XX was responsible for the initial communication of production matters and providing some machinery; defendant Li XX was fully responsible for production management, personnel management, and transportation activities; defendants Liu XX and Zhou XX were core technical personnel, respectively responsible for debugging the counterfeit machines, printing, coloring, cutting the counterfeit registered trademark identifiers, and guiding the automatic die-cutting and paper cutting of the counterfeit cigarette registered trademark identifiers; defendant Su XX assisted Liu XX in the production process, responsible for assembling and disassembling printing molds, adding paper, adding ink, and adjusting ink; defendants Liao XX, Ren XX, Liao XX, and Zhang XX were responsible for the printing molds, adding paper, adding ink, adjusting ink, manual gold stamping, and manual die-cutting processes; defendants Cheng XX and Liu XX were responsible for assisting Wu XX in liaising and supervising production. The defendants illegally manufactured more than 16 million counterfeit registered trademark identifiers for well-known cigarette brands such as Zhonghua, Nanjing (Xuanhemen), Li Qun (new version), Mudan, Hongtashan, and Hong Shuangxi.
[Judgment Content]
The court held that defendants Wu XX, Li XX, and others conspired to forge others’ registered trademark identifiers, with particularly serious circumstances, constituting the crime of illegal manufacturing of registered trademark identifiers, and sentenced each defendant to prison terms ranging from five years and nine months to one year in prison, with probation for one year, and imposed fines ranging from 70,000 yuan to 10,000 yuan. At the same time, defendants Liu XX and others were prohibited from engaging in the production and sales of cigarette boxes and labels during the probation period.
[Case Value]
This case is the first in the province to combat the full-chain mechanized production of counterfeit cigarette packaging. The defendants cooperated and coordinated with each other, illegally and mechanized manufacturing a large number of registered trademark identifiers, with particularly serious circumstances, which not only infringed the rights of registered trademark owners but also affected the benefits and reputation of registered trademark owners, and harmed consumers’ legitimate rights and interests, severely disrupting market order. At the same time, this judgment increases the punitive measures, applying a prohibition order, restricting the defendants with relatively serious circumstances from engaging in related business activities, which has a strong deterrent effect on curbing related intellectual property violations and crimes. This judgment reflects the court’s full exercise of its adjudicative functions, severely punishing the crime of illegal production of registered trademark identifiers, protecting the rights of trademark owners and consumers, and contributing positively to the creation of a standardized and orderly market environment.
Source: Jiangsu High Court
Editor: Yang Fengxiang
Proofreader: Zhou Yunzhe
Reviewer: Fu Xiangjun
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