IP Café┃China IP News of the Week

1 billion yuan feud: General Protecht petitions against Gongniu Group

The 1 billion yuan worth feud is still brewing.


On Thursday, May 6, Chinas National Intellectual Property Administration (CNIPA) issued a notice in General Protecht v. Gongniu Group in which the agency had accepted the petition filed by General Protecht for review of a decision in a patent infringement case against Gongniu Group in 2018.


General Protecht and Gongniu Group are two top Chinese civil electrical products manufacturers. The Gongniu brand name has almost become the byword for quality with Chinas power strip consumers. The Zhejiang-based company was founded in 1995 and taken public in February 2020. General Protecht, a Jiangsu-based one, has been maintaining its strong overseas presence for about 20 years and is the first Chinese company winning a patent infringement case filed by four American companies on their home turf.


General Protecht holds an invention patent for the support slide-type safety door with the patent number being ZL201010297882.4 and a utility model patent for the safety protector of mains socket with the patent number being ZL201020681902.3.


In December 2018, they filed the lawsuit against Gongniu Group in the Intermediate People's Court of Nanjing Municipality, Jiangsu Province for its infringing the two patents in the civil electrical products manufactured by the latter and sought about 1 billion RMB ($156 million) in compensation. The record-breaking figure instantly made headlines.


The respondent/defendant Gongniu Group initiated a petition to challenge the validity of the patents with the Patent Reexamination and Invalidation Department of the CNIPA. Based on the evidence provided by Gongniu Group, the CNIPA held that compared with the prior art, General Protechts patented inventions “don’t have prominent substantive features nor represent a notable progress” and “don’t involve inventive steps”. The Intermediate People's Court of Nanjing Municipality, Jiangsu Province ruled in March 2020 that the defendant’s alleged patent infringement was not established in light of the CNIPA’s post-grant amendment. General Protecht challenged the CNIPA’s administrative ruling of patent invalidity and filed an administrative litigation with the Beijing Intellectual Property Court in December 2020.


The latest notice issued by the CNIPA indicates that General Protecht has not decided to be reconciled with its competitor or itself.


@2021 China IP Magazine

CCTV is not happy about “being copied” anymore


On May 20, 2021, CCTV accused Zhejiang Television of the technical duplication of its promo on Weibo.


In recent years, May 20 has become a new Valentine’s Day celebrated by Chinese millennials. Zhejiang Television released a music video to mark the 100th anniversary of the foundation of the Chinese Communist Party on the very day. To lure a young audience, a hit song on Douyin called “Stars and Oceans (星辰大海)” was covered by 18 Chinese TV and movie stars in the video. The name of the song is exactly the same as the name of a promo of a show released by CCTV-6, CCTV’s movie channel, on January 1, 2020. Billed as a jumpstarter for fresh actors and actresses, the show “coincided” in the adoption of the phase “Stars and Oceans (星辰大海)” in its name, which allegedly came from a Japanese sci-fi novel well known in China, suggesting unlimited possibilities the future holds.


If similar naming was not a crime, then the duplication conducted in some shots of Zhejiang Television’s patriotic music video were too evident to be understood merely as taking inspiration.


According to Article 3 of the Copyright Law of the PRC, the two videos proper fall into the category of cinematographic works and works created by a process analogous to cinematography. According to Article 47, anyone plagiarizing a work and/or exploiting a work without permission of the copyright owner shall be liable for a compensation amounting to not more than 500,000 RMB yuan.


Lin Yong, Director of Zhejiang Television, has responded by claiming a misunderstanding and played down the accused plagiarism as peer learning.


For a long time, China Central Television (CCTV), as its name suggests, is the country’s undisputed flagship television broadcaster and has been a role model for the constellation of China’s local TV stations. Despite its programming intensely studied and referenced, CCTV’s advertising revenue has been staying on top up to now. Notwithstanding, with the marketization of broadcasting in China, “Big Five” local television stations, including Zhejiang Television, have achieved nation-wide presence by satellite and grown into CCTV’s unignorable competitors for advertising revenue. Convenient imitation has surely rattled its nerves.


Zhejiang Television was accused of plagiarizing Korean reality shows such as Running Man, the Return of Superman, Begin Again, etc to reap strong ratings. In the buzz generated on the Chinese social media, the TV station’s dubious reputation seems to have to some extent tipped the balance of the row with CCTV.


@2021 China IP Magazine

Tencent and NetEase: monopoly is being further busted with Sony Music deals


Sony Music Entertainment (SME) announced May 17 that it has signed both a new direct China digital distribution deal with NetEase Cloud Music and a multi-year extension of its existing agreement with Tencent Music Entertainment (TME).


Sony’s NetEase deal is the latest to shift power away from TME in China’s streaming industry and make the space slightly more competitive. It comes amidst a government antitrust probe of TME and its parent company Tencent Group.


For years, TME elbowed out competitors with exclusive digital distribution contracts with the three major labels, Universal, Warner and Sony. It would then sub-license those catalogues out to competitors like NetEase — often for double or triple the original price.


The arrangement provoked a 2018 antitrust investigation of Tencent, which resulted in a commitment from the firm to drop some of its exclusive contracts at the end of their three-year duration. The probe was suspended in 2019.


Last May, NetEase signed a strategic partnership with Warner Chappell Music to access the lyrics to the latter’s catalogue of songs. Last August, NetEase managed to sign a direct licensing agreement with Universal Music Group (UMG), signaling the first shake-up of the major labels’ previous one-and-done approach to the Chinese market.


The new antitrust investigation of Tencent currently underway hones in on TME in particular, Reuters said, and will likely result in a fine of at least $1.54 billion (RMB10 billion). TME may be forced to give up even more of its exclusive music rights contracts, and potentially sell off its music apps Kuwo and Kugou.


In March, TME renewed its multi-year licensing deal with Warner Music.


SME music is currently available via TME’s platforms such as top streamers QQ Music, Kugou Music, Kuwo Music and online Karaoke platform WeSing. Additionally, it will now be available on certain connected devices such as smart speakers, TVS and in-car audio systems.


@2021 China IP Magazine

One more monopolist? Chinese socket maker Bull under antitrust investigation

Chinese leading socket maker Bull Group announced on May 12nd that the local market regulator in Zhejiang Province had launched an investigation into the company's alleged monopolistic practices.


Analysts said the move shows that China's antitrust efforts have expanded from internet platforms to other sectors affecting every aspect of economy. Such move aims to create a fair market environment and a long-term development for industries.


Bull Group said in a communication sent to the Shanghai Stock Exchange on May 12nd that it had received the letter from the local market regulator on May 11st and will actively cooperate with the antitrust investigation.


The company's shares shed 2.77 percent on Wednesday while the flagship Shanghai Composite Index ended up 0.61 percent.


The company, based in Cixi, East China's Zhejiang Province and known for its electrical and electronic products, posted 2.31 billion yuan in net profit last year, an increase of 0.42 percent, despite the fallout of the COVID-19 pandemic and big swings in raw material prices.


Bull Group saw its net profit soar 256.17 percent year-on-year to 607 million yuan during the first quarter of this year.


@2021 China IP Magazine