January, 2011
Beijing Sheng Feng Law Firm
Beijing Sheng Bang IPR Co., Ltd
China IP News
Patented ‘Power Flow Computation’ Simulates Industry
Baidu Defeats 360 in Unfair
Wang Qishan: IP Protection Advances in China
Tian Vows to Offer Quality IPR Service for Enterprises
Peanut Milk Patent is a Tough Nut to Crack
Adidas Awarded 200,000 Yuan in Trademark Similarity
Case
Legislation development of IP
Reshuffling China’s Online Video-sharing Industry
Amid Copyright Protection
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China Strikes a Tougher Note for IPR Protection
China IP News No. 01, 2011
China IP News
Patented ‘Power Flow Computation’ Simulates Industry
Obviously, the best, most effective way to assure the safety of cars on the nation’s roads is to
have traffic police check them, one by one. But, how can that be done with the large number of cars
running around?
This apparently impossible mission on the road turns out to be an easy task when checking
terminals in an electricity grid, with a patented technology-a power flow sub-grid parallel
computing method.
This remarkable electric power industry achievement was developed solely by a China
Electric Power Research Institute team, in affiliation with the State Grid.
“The power flow computation can be widely applied to many areas of industry,” explained
Tian Fang, deputy director of the institute’s power system department.
In the field of electricity, it refers specifically to the analysis and calculation of a power
system’s operational status.”
When asked to comment further, Tian said that a power system’s stability and reliability could
be improved by locating problems from the beginning, through this advanced computing method.
“It can also perform real- or faster-than-real-time simulations of a power system, which can be
very helpful in using new equipment, anticipating accidents, and getting warnings online.”
The research team, led by Zhou Xiaoxin of the Chinese Academy of Sciences, began
experiments in this in 2001 and completed them about a year and a half later.
“One of the obstacles was figuring how to integrate a parallel algorithm with power flow
computations for a higher calculation rate,” Tian said.
“We devoted all our efforts to overcoming this technical difficulty and were thinking up
solutions even in our dreams.”
The results were beyond their dreams. The technology won Zhou and his team a China Patent
Award gold medal in 2010.
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In addition, by using the technology, the team came up with another remarkable find in 2004 a world-class advanced digital power system simulator (ADPSS).
“This is the world’s largest simulator of its kind,” Tian said proudly.
“It can be applied to various simulation research experiments on a large alternating current and
direct current (AC-DC) electric mechanism, using 10,000 nodes by connecting 1,000 generators.”
The ADPSS and related software have brought the institute considerable economic benefits.
Sales have reached more than 60 million yuan ($9.1 million), and profits have amounted to
more than 15 million yuan, over the 2005-2009 period.
The simulator has also played an important role in raising intelligent power system design
standards. It also increased the disaster defense capabilities of a power system to maintain
continuous, stable operations, he said.
Baidu Defeats 360 in Unfair
The Beijing No.2 Intermediate People’s Court entered the first-instance judgment on the case
between Baidu and 360, holding that Qizhi Software (Beijing) Company and Beijing Sanji Wireless
Networks Company constituted unfair competition and ordering the two companies to compensate
plaintiff for reasonably litigation charge and economic losses totaling 385,000 yuan.
Baidu sued 360 for unfair competition and sought 10 million in damages on August 2010. The
court found that the defendant labeled Baidu toolbar and address bar as “malicious plug-in and
software” in their 360 website, which the court believed falsely describe the software and misled
users to delete. All the above mentioned acts constitute unfair competition. So ordered.
Wang Qishan: IP Protection Advances in China
The 3rd China-EU High-Level Economic and Trade Dialogue (HED) was held in Beijing on
December 21. Chinese Vice-Premier Wang Qishan, European Commission Vice President Joaquin
Almunia (Competition), Commissioners Olli Rehn (Economic and Monetary Affairs) and Karel De
Gucht (Trade) co-chaired the meeting. Wang said that China has achieved palpable achievements in
IP protection since the 2nd dialogue back in May 2009. At present, a nationwide special campaign
against IP infringement, counterfeiting and piracy is now underway.
The meeting is an important platform for trade and economic cooperation between the two
sides. According to Wang, since the last dialogue, the two sides have been taking constructive steps
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to address respective concerns. China has made positive progresses in optimizing investment
environment, product quality and IP protection. The two sides agreed to enhance exchange and
cooperation in IP field, and launch a mechanism of an IP working group, and initial negotiations on
GI cooperation agreement.
Tian Vows to Offer Quality IPR Service for Enterprises
SIPO Commission Tian Lipu, on December 22, headed an inter-agency team to visit China
Petrochemical Corporation (SINOPEC) and listen to their comments and suggestions on IPR
administration. Tian highlighted that SIPO will provide quality IPR service for enterprises. He
encourages SINOPEC to leverage its IPR for better market position in global competition.
Tian stressed that SIPO is willing to provide a high quality service for the state-owned
enterprises (SOE) to enhance their capacity in creation, application, protection and management of
IPR, help them to participate the global competition which may eventually translate to contribution
to the economic development.
Peanut Milk Patent is a Tough Nut to Crack
A man in Suizhou, Hubei province, sued the State Intellectual Property Office (SIPO) for 5.4
billion yuan ($813 million) in compensation after it neglected to respond to an application he filed
for a patent 15 years ago and then told him it was out of date.
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Gong Baogui submitted his application for a patent on peanut milk production in 1995. He
heard nothing afterwards and when he finally pursued the matter, the SIPO formally dismissed the
case in February 2009 because the application was out of date.
He took the SIPO to court in 2010, demanding 1 billion yuan in compensation. The judges
ruled in favor of the SIPO. He then decided to appeal against the decision, raising the amount of
compensation to 5.4 billion yuan.
An appeal trial opened on Jan 6. The SIPO argued that a dismissal notice was issued on Sept
29, 2009 after Gong failed to respond to an earlier letter, dated June 8, 2009, regarding the
application processing fee. The file on Gong’s application was subsequently destroyed after he did
not reapply for a patent within two years of the initial dismissal notice.
In reply, Gong said the notices were mailed to an address in Shanghai, while he resides in
Hubei province. He claims the SIPO should be held accountable for mishandling his case.
Patented Genomic Cancer Treatment in Clinical Trials
Developed by Chinese researcher, recombinant virus targets tumors
As modern biomedical science makes dramatic progress in the fight against cancer, a professor
at Sun Yat-sen University Cancer Center has become a pioneer in fighting malignant tumors with
genomic medicine.
One of Huang Wenlin’s inventions - a genetically altered recombinant virus inserted with
human endostatin - won a gold medal at the China Patent Awards last year. Of 15 gold medal
winners, Huang’s discovery was one of three medical patents.
The reconstructive virus mainly targets veins in tumor cells, Huang told China Daily in an
email interview.
By preventing formation of veins in those cells, the virus can block the supply of nutrition and
oxygen and eventually kill malignant growth, Huang said.
The unwanted cells are then naturally degraded by the body, so the approach does little harm
to health and can be considered one of the safest yet found, associate professor Liu Ranye, one of
Huang’s colleagues, said in a telephone interview.
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The tumor cells themselves are not as deadly as their pace of growth, Liu said. The patented
virus is effective at checking their growth, he added.
Different from similar cancer treatments using substances made outside the body and then
injected into the patient, the recombinant virus reproduces inside cells, said Lai Qingyu, a member
of professor Huang’s research team.
“Ours is not a one-time effect,” Lai said.
“The virus can last much longer and work more efficiently inside the patient,” Liu said.
The half-life of anti-tumor medicines - an index of working time - is usually just a few hours,
while the patented virus continue to work for about a week, he said.
“The extended half-life means reduced costs and lessened pressure on patients (from
injections),” he added.
Huang and his team have developed an injectable form of the virus called E10A that is now in
clinical trials.
Designed to be injected directly into tumors, the clinical trial is treating head, neck, nose,
throat and breast tumors.
Animals are used for other experiments on liver and prostate tumors.
“Now we are also researching direct vein injection and other methods,” Huang said.
“Once we have more options for use of the medicine, more types of tumors will be treated,” he
said.
Overseas experience
Huang recalled that he started his research in 1988 while studying at Princeton University.
“The school’s friendly atmosphere, sound facilities and rich resources provided an ideal
research platform,” he said.
As a team leader of an organic molecular project at the school, he had marked achievements
and won a series of honors.
He was granted an award by the American Cancer Society in 1998 for his outstanding
contribution in the field.
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Huang then decided to return to his homeland and start his own business in 2001.
Promising prospects
At that time new, proprietary medicines from China, especially for treating cancer, were very
limited, Huang said.
He said he has faith in his invention and its promising market prospects.
Working at Sun Yat-sen University Cancer Center, he continued his research and founded a
company to industrialize the results.
“Innovation and research remain the most valuable part of my life,” he said, adding that his
company is run by a professional manager.
The scientist aspired to become a doctor when he was young, and he majored in clinical
medicine as an undergraduate.
Yet after graduation, he was assigned to work at a microbe institute in Hubei province rather
than at a hospital.
Far from his original aspirations, he was originally disappointed.
But he came to enjoy working with microbes and conducting experiments. He continued to
discover new questions and sought to resolve them.
In the end, he developed a keen interest in discovery and resolution. Because of the “unusual
enjoyment” he experiences in the process, he is even reluctant to leave his lab.
“Now I feel uncomfortable if I have not been to the lab one or two weeks,” he said.
His 20-strong team is made up of two groups, one mainly involved in clinical research and the
other focused on production procedures.
Investment in research and industrialization for new medicines is huge, Huang said.
In addition to the company’s input, as well as government financial aid, his team is also
seeking strategic partners for funding, he said.
To date, two other Guangdong-based companies have been granted exclusive license for the
patent in the United States and other markets.
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China IP News No. 01, 2011
Adidas Awarded 200,000 Yuan in Trademark Similarity Case
On January 4, 2011, Guangdong Dongguan Intermediate People’s Court entered a firs-instance
judgment on the Y-3 trademark case between Adidas and EXXEL International Group and
Dongguan Advanced Material Company, ordering the two defendants to cease producing and
distributing infringement products, delete relevant websites and pay Adidas 200,000 yuan in
damages.
Adidas is the operator of Adidas products, and it registered several series of trademarks of Y-3.
On April 2009, Adidas found a travel bag marked with Y3 trademark, and discovered its dealer is
EXXEL. Adidas held that the two companies’ action of using Y3 on products and websites
constituted trademark infringement on the ground of its similarity in pronunciation and visual
reorganization.
The court held that the products in question are similar in function, use, target consumers and
distribution channel. The defendants’ acts of using both Y-3 and Y3 trademark on the package are
enough to mislead and confuse consumers. So ordered.
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China IP News No. 01, 2011
Legislation development of IP
Reshuffling China’s Online Video-sharing Industry Amid Copyright Protection
Just about two months ago, with a few clicks of the mouse, Chen Ying was able to watch her
favorite American TV series, The Vampire Diaries or Gossip Girl, online for free.
Like Chen, an employee of a foreign-invested company in Shanghai, many U.S. TV series
fans in China have little choice but to watch video clips online because domestic cable channels do
not broadcast copyrighted ones. Some even volunteer to upload clips onto video-sharing websites
without any charges.
But now Chen can rarely find such unauthorized online videos of foreign TV series.
In November 2010, the State Administration of Radio, Film and Television (SARFT)
announced a ban on any forms of trading and supplying unauthorized foreign TV series.
Along with the ban, the Ministry of Culture launched a six-month nationwide crackdown on
counterfeiting in October to halt the theft of intellectual property rights (IPRS) and promote public
awareness in IPRS protection.
In response, China’s major video-hosting websites, including Youku.com, Tudou.com and
Ku6.com, removed unauthorized foreign TV series videos.
A podcaster, using an online name “Xueselaoxie” on the Nasdaq-listed Youku.com, said some
7,000 unauthorized videos of American TV series he had uploaded were deleted by the website in
one night.
To fans of foreign TV series, the ban might be a nightmare. But to the country, it was an
important step in fighting IPRS infringement, said Li Yongqiang, assistant to CEO of Beijing
Baofeng Inc., a provider of online video-hosting service.
Similar regulations were issued earlier. But never had they received as many reactions as did
this one, Li said.
“I checked some portals after the ban became effective. Some websites removed all the
unauthorized videos of American TV series in just one night,” Li said.
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“I believe the entire online video-sharing industry had realized the importance of a healthy
development environment, and people’s awareness of IPRS will be raised,” Li said.
Following the order from the central government, many provinces beefed up their efforts in
cracking down on online IPRS infringement.
In northeast China’s Jilin Province, the provincial copyright administration shut down two
websites, o2sky.com and imdj.net, after they were found illegally providing unauthorized videos of
South Korean movies.
The ban has resulted in a reshuffle of online video-sharing industry in China, with major
domestic websites gearing up to offer copyrighted imports of TV series and films.
Sohu TV offered many copyrighted online videos of American TV series, including Gossip
Girl, the Big Bang Theory and Nikita, after signing agreements with Warner Bros..
Youku.com signed agreements with three major South Korean TV stations - MBC, KBS and
SBS. It has also purchased rights from Warner Bros. to stream the hit movie “Inception,” and
charged five yuan (about 75 U.S. cents) for each view.
Additionally, Tudou.com is trying to produce its own films and TV series.
“From website operators to video producers, content copyright has become more crucial to the
survival of video portals,” said Li Shanyou, CEO of Ku6.com.
“It’s good to protect IPRS, but I would still like to watch the TV series online for free,” said
Cui Shan, a citizen of Changchun, capital city of Jilin Province.
“Definitely there are markets for foreign TV series or movies in China,” Cui said. “I think
those websites should import more copyrighted movies and keep offering them at a low price to
win markets.”
China now has more than 200 million video website users and the market is growing, said Li
Yongqiang. More paid online video programs will emerge as the cost of importing authorized films
and TV programs rises.
Li said it is likely that video-sharing websites join hands to import copyrighted programs from
overseas in order to lower the cost of watching TV series online.
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“But after all, the spirit of the Internet is to share resources. So as China’s online video industry
becomes more regulated, more resources should be encouraged to be shared for free on the Internet,
“ Li said.
China Strikes a Tougher Note for IPR Protection
China’s Minister of Commerce, Chen Deming, reassured foreign-invested enterprises (FIEs)
on Friday that China would stand firm on protection of intellectual property rights (IPR), citing the
country’s own need to build an innovative nation and upgrade its economy.
“We have established a relatively sound legal system to protect IPR, but we have to
acknowledge that the enforcement still falls short of expectations and China’s drive to build itself
into an innovation-driven country,” Chen said at the Symposium with FIEs on IPR Protection.
The words of Chen, who is also the deputy head of the Office of the Leading Group For
Nationwide Special Operation Against IPR Infringement and Counterfeiting, came as China’s
six-month crackdown on infringements of intellectual property rights and counterfeiting, a special
campaign launched in October in 2010, boasted impressive results.
The crackdown has resulted in the report of 16,036 cases of infringement and counterfeiting,
the confiscation of 98.77 million yuan (14.98 million U.S. dollars), and the arrests of 4,157 suspects
involving cases that were worth 2.3 billion yuan, said Chen.
For the first two months of the campaign, China’s procurators had indicted 598 suspects in
330 cases and the courts had sentenced 303 criminals to prison in 221 legal cases, said Chen.
China only started to gradually become familiar with intellectual property rights since its
reform and opening-up policy launched 32 years ago, so there is still a long way to go for China in
its efforts to protect IPR, Chen said.
“Here I urged foreign entrepreneurs to consider China’s IPR protection work as a process, but
I am by no way using the short time as an excuse for China’s inadequate enforcement of the IPR
protection laws,” said Chen.
“We clearly know our work is not enough, especially when we think of our goal to transform
the economic growth pattern and restructure the economy, and when we think about the need for us
to build our own big brands,” said Chen.
Citing Werner Geissler, vice chairman of Global Operations of Procter & Gamble, who was
present at the symposium, Chen said, “We have no reason to fail in IPR protection, especially given
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the need to protect the interests and rights of our customers and the enterprises who paid taxes to
the government.”
For foreign executives’ concerns about the short-term effect of the special campaign, Chen
said, “The efforts would not be short-lived” and the authorities would review and reassess the
experience and lesson of the crackdown and roll our a long-term mechanism to protect intellectual
property rights.
Chinese Premier Wen Jiabao, when speaking at a teleconference held by the State Council on
IPR protection last November, stressed the need for strengthened law enforcement and supervision
in intellectual property right protection and said China would increase its international exchange
and cooperation to further protect intellectual property rights.
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China IP News No. 01, 2011
Co-presented by
Beijing Sheng Feng Law Firm
Beijing Sheng Bang IPR Co., Ltd
Chief editor：Guofu Yu
Editorial Board：Huijing Xi
Chunyan Bao
TEL: (86 10) 51280101、51656805-8011/8077/8089
FAX: (86 10) 62642561
E-mail: ygf@lawer8.com; xhj@lawyer8.com
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