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Lawsuits involving overseas parties surge in Shanghai

By Wang Zhenghua (China Daily)

09:48, April 26, 2013

The number of intellectual property rights lawsuits that involve an overseas party saw a major spike in Shanghai last year amid an even higher increase in the overall number of IPR-related cases.

Shanghai courts handled 240 civil lawsuits involving a party not on the mainland in 2012, a 23.7 percent year-on-year increase, according to an IPR white paper released by Shanghai High People's Court on Thursday.

During the same period, Shanghai courts received 4,575 IPR-related lawsuits, a jump of 44.8 percent.

More than 80 percent of the claims by the overseas parties in cases they were involved got support from judicial departments, the white paper said.

That high percentage does not mean courts in Shanghai play favorites, Zhu Dan, president of the third tribunal for civil trials at the high court, said at a news conference on Thursday about the white paper's release.

"The intellectual property rights of both Chinese and foreign entities are fairly protected," he said.

Yet lawsuits related to an overseas party are always initiated by large foreign companies, which have sophisticated methods in IPR management, application and protection and are fully prepared for the lawsuits they launch in China, he said.

The rise of these lawsuits also shows that some Chinese companies did not show sufficient respect to others' intellectual property rights, and in some cases they intentionally infringed on others' rights, he added.

Many of these cases are related to disputes on a patent that contains advanced technology or related to a well-known brand, Zhu said. "Famous trademarks are hardest-hit by counterfeiting activities or are more likely to have their rights infringed upon," he said.

Two lawsuits related to foreign parties are included in a list of 10 major court cases involving IPR infringement of Shanghai last year.

In one of them, a court ruled in favor of US semiconductor chip maker Intel Corp, which claimed its trademark name was infringed on by a Chinese company that had adopted "Inteljet" as its English logo and website domain.

The Chinese company, based in Shenzhen, Guangdong province, was ordered to provide compensation of 400,000 yuan ($64,800) and publish a statement in a major newspaper to reduce the negative effect its actions had on Intel.

The Chinese firm appealed to a higher court but later withdrew its appeal and reached a settlement with the plaintiff. Both sides declined to reveal the final resolution.

In the second case, 3M Co, a US multinational conglomerate corporation, sued Zhejiang Daoming Investment Co for infringing on its patent. Zhejiang Daoming was ordered to pay 250,000 yuan in compensation.

The list of 10 major IPR cases was topped by the dispute between Shanghai Animation Film Studio and two of its employees for the copyright to "Calabash Babies", the cartoon figures in the animation TV series Calabash Brothers.

Courts in Shanghai ruled in favor of the film studio and decided that its two workers, who designed the cartoon figures, were entitled only to rights of authorship.

Also on Thursday, the Shanghai High People's Court, for the first time, released a report on IPR protection in the city's cultural and creative industries for the period from 2010 to 2012.

According to the report, Shanghai courts handled more than 7,000 civil lawsuits related to the sector during the period, or about 70 percent of the total IPR cases handled by the judicial departments between 2010 and 2012.

Chen Libin, vice-president of the high court, said that the number of cultural and creative industries-related lawsuits has been rising rapidly in recent years, which shows a boom in the cultural sector but also exposes the problem of industry players in the application, management and protection of intellectual property rights.

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