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China Law Insight

Dispute Resolution

Protecting of Works of Applied Art under Chinese Judicial Practice(II)

Posted in Dispute Resolution, Intellectual Property

By Ding Xianjie and Steven Yao Tang Lei King and Wood Mallesons’ Dispute Resolution Group

(1) Chaozhou Ge Lan Te Clothes Ltd. vs. Haochang Ltd. (Jiangxi High Court, No.19, 2007)

In this case, the Plaintiff not only brought a claim for protection of copyright, but also sought protection under the Anti-Unfair Competition Law. The Court of first instance held that generally a ‘well-known commodity’, should be identified based on the following elements: Familiarity of the disputed commodity to the relevant public, the timing, sales amount and percentage of market coverage of that commodity sold in the market, the extent of advertisement promotion, the scale of capital investment, the scope of geographical distribution, and authoritative awards received by the commodity, etc. The ‘unique decoration of a commodity’ generally refers to the specific designs on the package of the commodity such as the additional words, patterns, colors and formatting. These design elements are added for identifying commodities and increasing aesthetic attributes. The Plaintiff’s chinaware commodity shows an obvious difference in terms of decoration from the other relevant chinaware. The main elements which have drawn attention from the public and differentiated the Plaintiff’s products from other chinaware are the figure, color, and style, which carry obvious characterized attributes. The decoration of this commodity has been used by the plaintiff in China for many years and has generated distinctiveness. The main attributes of the decoration were the pattern, color and style which constituted an obvious distinctiveness in differentiating the origin of commodity. The relevant public, when looking that type of commodity, will associate it with a specific producer, the plaintiff, and the commodity has achieved a “distinctive” attribute to differentiate itself from other same type of commodities. The pattern, color and style of Plaintiff’s commodity have constituted an important label for the relevant public to identify the Plaintiff’s product. Therefore, it should be upheld that the “Fa Lan Ci” chinaware, through use, has generated distinctiveness, and constituted the unique decoration of a well-known commodity.

The Court of second instance was of the opinion that: “[e]ven if the unique decoration was faked and there constituted unfair competition, it should be taken as a merger of law if the plaintiff also claimed copyright protection.” Therefore, the Court did not deny “works applied art” could be protected as unique decoration.

(2) Shantou City Chenhai District Huada Toy Ltd. vs. Pinhu Bei Si Da Children’s Car Ltd. (Jiaxin Intermediate Court, No.7, 2008)

The Plaintiff Shantou City Chenhai District Huada Toy Ltd., a battery-drive toy car maker and seller, sued the Defendant for infringing the unique decoration of their battery-drive toy car product HD-6410 (Pic.14). The Court held that the Model HD-6410 “phantom space car” produced by the Plaintiff Huada Company was a “well-known commodity”. The Court also recognized that the “Red Phoenix Eye” front-lights, streamlined body, handle, shimmering color lighting and the tail-wing, looking as a whole, carried obvious unique attributes which differed from other products of the same type. These attributes were not adopted by other products of the same category and were only specially used by this model series. At the same time, they also had a decorative function, to beautify the external appearance of the battery-drive toy car. So, these attributes are ascribed to be the unique decoration of a well-known commodity.

 

As illustrated by the picture (Pic.14), the external appearance of this battery-drive toy car also has satisfied the required artistic attribute for “works of applied art”, but the Plaintiff did not seek protection under the Copyright Law and instead sought protection under the Anti-unfair Competition Law. In the end, the Plaintiff successfully defended their interests.

III. An evaluation and contrast of the three forms of protection listed above

A consolidated analysis of the above forms of protection for “works of applied art” denotes that each of them carries special characteristics:

(1) Protection through the Copyright Law — The merit of this form lies in its automatic protection, as there is no need for registration or approval for the creation of copyright. At the same time, the period of protection is relatively long. Article 6 of the Regulation to Implement International Copyright Conventions[i] explicitly provided that the protection period for foreign “works of applied art” shall be 25 years commencing from the date of creation of the work, even though on the protection of domestic “works of applied art”, it was not mentioned in any stipulation of law and regulation, nor in court cases. But in Article 28 of the Amendment Draft to the Copyright Law (the 2nd draft), it was provided that the protection period for works of applied art shall be 25 years and, for the property right within a copyright, 25 years after the date of first publication. Based on this, we may foresee that after the passing of the Second Draft Amendment, protection of foreign and domestic “works of applied art” in China will be made specific. The drawback of protection via copyright is that it requires a relatively high level of artistic attribute and the Courts must recognize the artistic attribute on a case-by-case manner, which rely heavily on the judges’ discretion.

(2) Protection through the Patent Law — The merit of this form lies in the simplicity in recognizing the protection scope under Article 59 of the Patent Law- ” [t]he extent of protection for the patent right of a design shall be determined by the product incorporating the patented design as shown in the drawings or photographs in patent specifications”. As such, judges could ascertain the scope of protection based simply on the approved patent document and without resort to additional discretion. Meanwhile, the volume of authorized design patents in China is very high, as design patents demand no proof of artistic attribute, and the patent application procedures are relatively simple. Therefore, it could be said that it is not too difficult for “works of applied art” to obtain patent authorization. In addition, a higher compensation could be won by going through this form. As to the drawbacks, the protection period for a design patent is only 10 years, and the patent owners have to pay a patent fee annually.

(3) Protection through the Anti-Unfair Competition Law — It is comparatively harder to obtain protection through this form. According to Article 5(1) (b) of the Anti-Unfair Competition Law:

“[The act] of those, without consent, making use of the unique name, package and decoration, or by use of a similar name, package and decoration, of well-known commodity, and which caused confusion with other’s well-known commodity and caused the purchaser to mistakenly take it as the well-commodity, will be an act of unfair competition.”

To be protected under this form, the property owner must prove that the commodity is “well-known commodity” and prove confusion was in fact caused amongst the relevant public. Therefore this form would likely be a last resort after all other forms of remedy have been exhausted.

As more works of applied art are produced, it is foreseeable that infringement cases may also rise. For manufacturers in this category, the likely first step is to apply for a design patent before marketing their products to the world. In this way, manufacturers can obtain a relatively strong 10-year patent protection, after which they can continue to get protection through the Copyright Law. Meanwhile, with the aforementioned exclusive first 10-year patent, it would also be highly advantageous to get the recognition of a “well-known commodity” and a commodity with “unique decoration”. Through the above measures, the manufacturer will be better positioned to gain protection under the Anti-unfair Competition Law.

                              (This article was originally written in Chinese, the English version is a translation.)

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[i] Promulgated on September 25, 1992 by the State Council.