As an old Chinese proverb goes, “what one loses on the swings, he gets back on the roundabouts.” This is exactly what happened to Jaguar Land Rover in its claim against Land Wind (Jiangling Motors) in China for copying of Jaguar Land Rover’s car design.

Background

After their patent battle from 2014 to 2019, the design patents of Jaguar Land Rover and Land Wind for their off-road vehicles were invalidated by each other. In 2016, Jaguar Land Rover sued Land Wind for copyright infringement and unfair competition before the Beijing Chaoyang District People’s Court. The copyright infringement claim was rejected but the unfair completion claim was upheld. Upon appeal, the Beijing Intellectual Property Court in its final judgments of May 27, 2021 maintained the original decisions in respect to both claims. There is a lesson to be learned by business in China through this typical IP protection case: apart from formulating the correct design protection strategies, asserting IP rights and unfair competition protection simultaneously may sometimes be advantageous.

 

Picture of Jaguar Land Rover Evoque from its design patent Picture of Land Wind X7 from its design patent

Claims for unfair competition and IP infringement

The legislative purpose of China’s Anti-Unfair Competition Law is to maintain the order of competition. It also provides some extra protection to IP owners in respect of their IP rights. In cases where the law does not provide a specific rule for an act of competition, whether such act is unfair is determined in accordance with established business standards and universally accepted knowledge taking into account the general provisions of the Anti-Unfair Competition Law.[1] Theoretically, since the constituent elements and legal basis for IP infringement and unfair competition are different, an IP owner can choose to claim under both IP infringement and unfair competition arising from the same act, and such tandem court actions is gaining popularity in China. In practice, however, the ways that local PRC courts handles such claims vary considerably. Some local courts require the plaintiff to choose a cause of action from either IP infringement or unfair competition, and the trial will proceed and judgment made solely based on the specific grounds pleaded. In particular, some courts take the view that if the plaintiff has been sufficiently compensated under the relevant IP law, the plaintiff’s case on unfair competition should be dismissed. In contrary, some courts may believe that remedies under IP law are inadequate in certain circumstances, and may allow the plaintiff to sue on both grounds.

Jaguar Land Rover vs. Land Wind

In Jaguar Land Rover vs. Land Wind, the court of first instance held that the appearance of a car may be protected under multiple overlapping IP rights with different scope of protection and remedy for infringement. As such, Jaguar Land Rover is allowed to sue based on all available grounds. For the same subject matter, if one of the rights, such as design patent right, is invalidated or expires, it does not necessarily mean that the IP owner loses the enjoyment of other rights. Therefore, after Jaguar Land Rover’s patent was invalidated, it may still seek relief under the Copyright Law and the Anti-Unfair Competition Law. The Beijing Intellectual Property Court on appeal also supported this conclusion.

Many previous cases in China followed the same approach.

  • In Jin Yong vs. Jiang’nan, the court of first instance held that the character names and character relationships in the plaintiff’s work did not constitute original expressions and could not be protected under the Copyright Law. However, the court held that Anti-Unfair Competition Law applied to protection of these elements. [2]
  • In Guangzhou Xihai vs. Xiamen Weinixin, the High People’s Court of Fujian Province held that the package of the alleged infringing product was not substantially similar to the plaintiff’s copyrighted work. However, the court determined that the packaging and decoration of the products amounted to “packaging and decoration with certain influence”. The similarity between the overall visual effect of the packages of the alleged infringing product and the plaintiff’s product was found to be sufficient to cause confusion by consumers and hence constituted unfair competition. [3]

Conclusion

When an IP right is infringed, the IP owner may, in addition to seeking legal protection in accordance with the relevant IP law, try to claim under the Anti-Unfair Competition Law. Of course, whether the claim can be substantiated will be assessed and determined by the court on a case-by-case basis, taken into account the factual circumstances. The Jaguar Land Rover case serves as a good reminder to all IP owners the importance of considering all available enforcement strategies and pursuing on all fronts in China.

[1] See Article 11, Opinions of the Supreme People’s Court on Certain Issues Towards Ensuring that Trial of Intellectual Property Rights Cases Serve the Overall Interests of China in the Current Economic Situation.

[2] See (2016) YUE 0106 MIN CHU 12068 HAO.

[3] See (2020) MIN MIN ZHONG 1104 HAO.