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Appeal by Shanghai Meng [X] Food Co., Ltd. and Zhangjiagang Jin [X] Food Trading Firm v. Spin Master Ltd. and the original trial defendants Fujian Rui [X] Food Co., Ltd., Fujian Xia [X] Food Co., Ltd., and Fujian Shen [X] Food Co., Ltd. regarding a dispute over copyright infringement
In this case, the defendants applied to register as trademarks the cartoon images in which the right holder enjoys copyright, and raised such registrations as a defense. When faced with a conflict between two types of rights, the court strictly adhered to the core principle of protecting prior rights, and found that the cartoon images used by the defendants were substantially similar to the plaintiff’s copyrighted works. The defendants’ preemptive registration of the trademarks further highlighted their intent to infringe, which was negatively evaluated by the court and became an important factor in determining the amount of damages. As to liability, the court found that the commissioning party had subjective intent to infringe, while the OEM manufacturers and sellers failed to fulfill their reasonable duty of review, thereby effectively pursuing liability along the entire chain of infringement. Finally, in determining the amount of damages, the court comprehensively considered factors such as the scale of infringement, the infringing intent, the contribution rate of the copyrighted works, and the reasonable expenses incurred in rights protection, and applied statutory damages at its discretion, while at the same time reflecting punitive elements against malicious infringement.
Brief Facts of the Case
"PAW Patrol" is a representative series of animated works of Spin Master Ltd. The right holder owns the artistic work "PAW Patrol Cartoon Characters," which includes the cartoon character image named Marshall—a white spotted dog wearing a red vest, a red helmet and a yellow collar, with a shield-shaped badge on its chest—embodying original artistic design.
In 2021, the right holder discovered that Shanghai Meng [X] Food Co., Ltd. (hereinafter "Meng [X] Company"), without permission, had authorized three Fujian food enterprises to manufacture on an OEM basis multiple seaweed roll products, and used on the product packaging a "cartoon dog" image that was substantially similar to the image of Marshall. The above-mentioned products were sold in large quantities through e-commerce platforms such as Taobao and Tmall, as well as offline supermarkets and convenience stores across the country, and Zhangjiagang Jin [X] Food Trading Firm (hereinafter "Jin [X] Food Trading Firm") also participated in the sales channels. In addition, during the period from 2017 to 2019, Meng [X] Company applied for multiple trademarks imitating "PAW Patrol." Although these trademarks were approved for registration, the China National Intellectual Property Administration declared them invalid on 18 May 2020, and the subsequent administrative litigation brought by Meng [X] Company was also dismissed.
The court of first instance, after trial, found that although the "cartoon dog" image on the packaging of the accused infringing products and the copyrighted work both drew on elements from the public domain and there were minor differences in certain parts, the image contained numerous original features of the Marshall image in the copyrighted work (such as the red vest, helmet shield pattern, paw elements, etc.), and that the two were substantially similar in artistic expression. The court also found that Meng [X] Company, the three Fujian OEM manufacturers and Jin [X] Food Trading Firm constituted joint infringement. Taking into comprehensive consideration factors such as the fame of the work, the defendants’ malicious trademark applications, the scale of infringement, and the contribution rate of the work to the value of the products, the court, at its discretion, ordered Meng [X] Company and the three OEM manufacturers to jointly compensate RMB 2.5 million, and held Jin [X] Food Trading Firm jointly and severally liable for RMB 100,000 thereof. This judgment was fully upheld by the court of second instance.
Key Points of the Judgment
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Implementation of the principle of protecting prior rights: Although the defendants had once applied to register as trademarks the cartoon images in which the plaintiff enjoys copyright, the court did not allow this to affect the finding of copyright infringement. On the basis of ascertaining that the plaintiff’s rights were prior in time, that the work enjoyed a high degree of recognition, and that the parties’ works were substantially similar, the court held that the defendants’ acts of use constituted copyright infringement. The defendants’ preemptive trademark registrations not only failed to constitute an effective defense, but instead became an important basis for finding subjective bad faith.
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Crackdown on the entire chain of infringement: In addition to the preemptive registrant, and in light of the extremely high recognition of the copyrighted work, the court held that other links in the chain of infringement, namely the OEM manufacturers and distributors of the infringing products involved in the case, also bore liability as they failed to fulfill their duty of prudent review, and thus constituted joint infringement.
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Reflecting punitive elements while applying statutory damages: In this case, the court, in determining the amount of damages at its discretion, comprehensively considered factors such as the scale of the defendants’ infringement, the recognition, commercial value and contribution rate of the copyrighted work, and the reasonable expenses incurred in rights protection, and explicitly reflected punitive elements by increasing the severity of sanctions against malicious infringement.
Read the Judgment in This Case
