"Plagiarism" has been a major and widespread problem in China's furniture industry and for a long time it has been difficult to solve. Many kinds of infringement can be seen in design plagiarism and brand imitation. What's more, many furniture products having rights to patents and/ or well-known trademarks have been wantonly faked or counterfeited for production and sale.
This problem of IP rights infringement is extremely common and a very serious problem in China's furniture industry. Although cases related to IP in furniture enterprises have been increased yearly, the total number of such judicially decided cases can not be said to be numerous. There have been few cases, where the right holders have won their cases through litigation for protection. China IP finds that, after research, there are few cases in this regard in the list of annual typical cases decided by the courts across China, which also illustrates the “ current dilemma of IP protection by and for China’s furniture industry.
Ⅰ. Helplessness and hardships for design rights maintenance
Beijing Zhongwen Law Firm and Beijing Shuangye Furniture Industry Co., Ltd. co-sponsored a seminar on Intellectual Property Protection in Furniture Industry in Beijing on April 26th 2014. Attendees included officers in charge from China National Furniture Association (CNFA), Beijing Home Furnishing Brand Alliance, Shenzhen Furniture Association, patent examiners from the State Intellectual Property Office of China (SIPO), legal experts from universities in Beijing and representatives from some well-known furniture manufacturing and sales businesses. They had an in-depth discussion and exchange about common concerns for IP protection in the furniture industry.
According to Zhu Changling, the CNFA chairman, China has witnessed The Dilemma and Outlet for IP Protection in China’s Furniture Industry an increasing growth in the furniture industry since the reform and opening up, especially during the development of the last decade. The output value of the industry has reached 1,200 billion yuan, with nearly 6 million people employed and 53.1 billion U.S. dollars in export, which makes China the largest furniture exporter in the world. However, the industry has been plagued by IP problems and plagiarism. This has occurred from time to time in the process of every rapidly developing industry.
It has been a common phenomenon that China’s brand furniture companies have suffered financial loss and market harassment from these IP infringements. Every business representative attending the seminar expressed helplessness in face of infringement upon his or her company.
When it comes to this topic, the representative from Huari Furniture uses the word of "extremely tired and bored" to describe his feeling. According to him, Huari Furniture has 82 trademarks, more than 400 patents, including about 20 patents for design inventions and utility models. At the same time, Huari Furniture has to deal with numerous infringements upon its trademarks and patents every year which has been proven difficult for right maintenance. Some enterprises make their infringements upon Huari Furniture in bold and straightforward terms. What’s more, some of them are proud of their rapid copying.
According to Jiang Bo, the legal adviser at Beijing Century Beking Furniture Co., Ltd., Beking has suffered from many kinds of new infringements in recent years, including IP infringement from their e-commerce platform. Beking's original photos have been copied and used by some small-business workshops on their network shops, which Beking finds it has no way to tackle. It is impossible to find the infringer in many cases because of difficulty in determining the right defendant.
Qi Lin is the president and chairman of the board of Beijing Ronglin Shijia Co., Ltd., who has been known for his insistence on design originality in the industry. He is filled with resentment by design plagiarism. He said that there has been a very serious, mutual plagiarism phenomenon in the industry. “When we file lawsuits for our rights maintenance that is aboveboard in itself, but some peers think we do it just for promotion. Who we sued were usually acquaintances, and some of them were our private friends. Therefore, why we sued is not aiming at somebody or some enterprise, but for purification of the whole industry. What we insist in is not our interest, but a principle. What we want to win in the lawsuit is not money, but to enforce morality and justice.”
Gao Fei, the president of Beijing Shuangye Furniture Industry Co., Ltd., shared his experiences in this regard. “Enterprises have to tackle many problems in IP litigation. We are good at the management of our enterprise, but we are incapable of performing well in litigation.” He believes that the so-called personal relationship is an obstacle to rights maintenance in China’s furniture industry. Where there are Chinese people, there are personal relationships. Therefore, such relationships are difficult to neglect. In the previous generation, many enterprises in the industry have been familiar with each other for many years. They meet at times and places. Where there is a dispute, there is an understanding about no lawsuits or no enforcement of the judgment. The way to tackle such difficulty is the concern of the whole society. Therefore, he sincerely hopes that the media can pay more attention to the innovation and right maintenance of furniture businesses, so that not only the business and industry, but also consumers can improve their awareness of IP.
Representatives from enterprises agreed at the seminar that there has been a very serious IP infringement in the furniture industry up to present, including low compensation and the difficulty of launching a lawsuit. The ability to enforce rights maintenance is limited, although an atmosphere for IP protection has been established in the industry. Additionally furniture enterprises have many things to learn about IP infringement because they know little about the relevant laws and options for IP protection in their industry.
Qi Lin used to be awkward because of his ignorance of patent system. "We designed a new product and presented it at an exhibition before our patent application. Later on, that product was copied by another enterprise. It submitted a defense for prior design in the litigation, which was just our design at the exhibition. "
Yan Ruohan, the examiner at SIPO Design Division suggested that furniture enterprises should actively get to know the situation of the industry, to find what patents have been disclosed in the industry, what patents have been applied by other enterprises, whether the patent concerned is invalid and relevant credit information, etc. SIPO has the largest data base in China where enterprises are allowed to freely search and to retrieve patents for a fee.
As far as how to solve infringement is concerned, scholars at the seminar made analyses from perspectives of patent law, copyright law, trademark law, etc., and suggest that arbitration may be the right way to solve infringement dispute in the industry.
Ⅱ. The industry calls for joint rights maintenance
Lawyer Wang Guohua at Beijing Zhongwen Law Firm said that the seminar was scheduled to promote protecting the inventions of furniture enterprises, to encourage innovation in furniture design, to promote the development of furniture technology and to regulate furniture market in order to achieve a healthy and orderly competitive environment in the industry.
Gao Fei pointed out that many insiders didn't see positive result while Shuangye sued Laishi Furniture, Yitong Furniture and East Hongye. However, Shuangye’s confidence has been encouraged by its successive winnings in litigation. Meanwhile, he thinks that furniture business is an industry with a highly fragmented market, and that the enterprise with the largest output value owns less than 1% of the total of the industry. Therefore, it is not sufficient to rely on one or two enterprises to make the industry grow bigger and stronger. Instead, the industry must join in a meaningful dialogue about rights maintenance and the joint development & popularization as well.
Zhu Changling also points out that the furniture industry has made a great contribution to China and society. At present many large enterprises have become publically listed, stock companies; SMEs are also gradually developing. It is more and more important to have IP protection in such process. IP protection should be granted to big enterprises and help should be offered to SMEs for their establishment of IP application system. Therefore, the furniture industry must unite to promote and formulate a uniform set of industry wide business rules. Meanwhile, the law and law information should be strengthened in order to create a phenomenon of being ashamed of plagiarism and to boycott any occurrences of infringement.
Former CNFA Secretary General Cao Yingchao suggests that the relevant administrative, the judicial departments and the industry associations should provide enterprises with some of these services, such as the extensive publicity of enterprise’s IP and original design, and that furniture stores and e-commerce furniture business bear their respective responsibilities.
Cheng Yongshun is the former presiding judge of IP tribunal of Beijing Higher People’s Court. He proposes that the furniture industry should advocate for and promote a sense of respecting others and helping itself in order to tackle the frequent IP disputes. He suggests that an information platform should be established in the industry to disclose infringers and to record product statistics of innovative enterprises, which may be used as evidences for future disputes and litigations, and to develop a mutual patent licensing for furniture technology.
The Beijing Service Center for Intellectual Property Protection and the Beijing Furniture Association coestablished the Beijing Furniture Association workstation in November 2013 in order to provide enterprises with comprehensive and all-round IP services for the industry. However, some enterprises have complained that the workstation has not conducted any specific business since it was set-up, and hoped that it would embark on comprehensive work as soon as possible.
At the end of the seminar, Shuangye Furniture, Ronglin ShiJia, Beking Furniture, Huari Furniture, Qumei Furniture, Ikea and Beijing Zhongwen Law Firm co-signed the Proposal for Respecting Wisdom, Encouraging Innovation and Protecting Intellectual Property and sent initiative to legislatures, judicial organs, administrative enforcement organs, furniture industry associations, all furniture enterprises and consumers. The proposal called for the members and other individuals to join hands, to respect wisdom, to encourage innovation, to safeguard IP rights and to boycott infringement.
Ⅲ. Legal expert expounds the way to right maintenance
Li Yongbo is a lawyer at Beijing Unitalen Law Firm, who has been the representative of many IP cases related to furniture, and has acquired a wealth of practical experience in the field of patent, trademark, copyright and antiunfair competition. He presented a special lecture on the protection of Italian furniture design in China at the invitation of the University of Parma, Italy.
Li Yongbo told China IP that furniture enterprises may seek protection under China’s Patent Law once its application for patent for utility model and design is granted. According to Li, China has a very good and stable protection for granted patents. He suggests that furniture enterprise should first seek patent protection for its design.
“However, the duration of patent rights for utility models and designs is only ten years according to China’s law. So some furniture enterprises seek no patent protection for its design. Under such circumstance, it is possible to acquire protection for furniture designs through works of applied art or trade dress under the anti-unfair competition law.”
According to Li Yongbo, China’s State Council promulgated Provisions on the Implementation of the International Copyright Treaties shortly after China’s signing of the Berne Convention (the Convention). The Convention provides in Article 6 that "in the case of foreign works of applied art, the term of protection shall be 25 years commencing from the creation of the Work." However, China’s current Copyright Law and its implementing regulation has no mention of works of applied art, although there have been cases for protection of such works in judicial practice. Therefore it can be deemed as a commonly affirmative attitude that such work can be protected under China's Copyright Law as work of fine arts. Furthermore, there has been a relatively uniform standard in China for the identification of works of applied art, which requires originality, reproducibility, relative aesthetic significance and artistry. However, if the work of applied art involved in the case has not reached the height of a work of fine arts, it can't be granted protection, even if the allegedly infringing product is similar to or basically identical with the work involved in the case.
Li Yongbo suggested that "if the design of furniture does not reach the height that a work of fine arts should have, furniture enterprise had better, after the finish of such a design, apply for a patent for the design, or use such products that have a widespread exploitation and promotion in order to meet the requirement of well-known goods under anti-unfair competition law."
Li Yongbo made a comprehensive analysis of advantages and disadvantages of the different methods for IP protection. He finds that the method under China's Copyright Law for the protection of works of applied art has the advantage of automatic protection without registration or approval and a relatively long duration. But it is disadvantaged by the relatively high requirements for artistry of such work, case-by-case identification and inconsistence between judge’s discretion, statutory requirements and standards at times.
The method under China's Patent Law for the protection of works of applied art has the advantage of easiness for the court to determine the scope of protection based on the patent license, requirement of no extra discretion and a relatively high compensation that can be acquired through the method. Its disadvantages are in a duration of ten years and a payment of annual fee. However, the method under China's Anti-unfair Competition Law for the protection of works of applied art is difficult to use because it requires the specific packaging or decorations of well-known commodities for such protection. According to Article 5.1.2 of China’s Anti-unfair Competition Law, the act excludes the using without authorizing a unique name, package, or decoration of another’s famous commodity, or using a name, package or decoration similar to that of another’s famous commodity, thereby confusing the commodity with that famous commodity and leading the purchasers to mistake the former for the latter. It can be seen that there must first be a famous commodity, which requires substantial evidence of use and promotion. Second, there must be confusion between and among the public concerning which product is the original, and is generally very difficult to prove. However, there have been many such cases, which concluded unfair usage and received judicial protection under China’s Antiunfair Competition Law.
Li Yongbo concluded, "As far as furniture design is concerned, there may still seek for works of applied art for protection, if the design reaches a relative high level of artistry, a pursuit of protection for design or utility model under Patent Law if it has not reached such a height, or a chase after protection under Antiunfair Competition Law by making the source of the product somewhat indicative after quantitative sale and widespread promotion."
(Translated by Yuan Renhui)