Yandex is accused of copyright infringement

Yandex is accused for violation of a Russian rappers’ copyright. Now copyright holders are claiming from the Internet company compensation in the amount of 5.4 million rubles.
The company SO / Era Music, which is responsible for the music management of more than 30 Russian artists, including Loc-Dog, On-the-Go, etc., sued Yandex for violation of copyright and related rights.
It is about placing on the service “Yandex Music” songs of two Russian music projects – 25/17 and “Ice 9”. An exclusive license for this music belongs to the plaintiff.
The copyright holder says that they tried to settle the claims in a pre-trial order, but the companies did not eventually come to an agreement. “Yandex” did not comment the claims of the copyright holder.
According to the copyright holder, “Yandex” violated the terms and conditions of use, stipulated in the license, for example, “Yandex Music” without any permission used artists’ images for advertisement.
Till now it was not possible to agree on the settlement of the dispute. On April 5, SO / Era Music Ltd. filed suit about the illegal placement of music albums and images of artists 25/17 and “Ice 9”. The preliminary session of the Arbitration Court is scheduled for May 23. The amount of the claimed compensation is 5.4 million rubles.

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The list of the most valuable and recognizable Russian brands is published

According to the rating lists, which were compiled by the consulting company Brand Finance, Aeroflot is the most recognizable and Sberbank is the most valuable brand in Russia.
Aeroflot” took the first line of the list of the most recognizable Russian brands (Brand Strength Index). The “strength” of the brand was determined based on such indicators as consumer loyalty, marketing investments, and business reputation. The result of the Brand Strength Index of the Russian airline is 88.8 points. Sberbank took the second place in the list with 82.9 points, the trading network “Magnit” is on the third place with 80 points.
Top 10 also includes Rosneft, Beeline, LUKOIL, Megafon, VTB, Gazprom and MTS.
The other rating is about Top 50 most valuable Russian brands. The leader in the list is Sberbank. Sberbank was also rated as the 6th-most expensive banking brand in Europe and the 24th in the world. The published report of Brand Finance notes that over the past year, the value of the brand of the largest Russian bank has grown by 23% and currently stands at almost 570 billion rubles.
Gazprom, LUKOIL, Rosneft, Magnit, Surgutneftegaz, RZD, VTB, MTS and Tatneft are among TOP 10 most valuable brands of Russia.


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S&O News

S&O is proud to have been invited as an IP specialist firm to take part in the upcoming 20th EU – China IP Working Group on April 20 featuring Mr. Chen Fuli, Deputy Director-General, Treaty & Law Department, MOFCOM & Mr. Fernando Perreau de Pinninck, Head of Unit, DG Trade, European Commission. We look forwards to a fruitful and constructive meeting.

General IP

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Increasing trend of Chinese brands in the Kazakhstan market

Chinese cars are getting popular in Kazakhstan

The first Chinese cars in Kazakhstan – trucks YUEJIN and PUYUAN were registered in 1998. The segment of Chinese commercial vehicles has been actively developing since 2004, when the number of cars registered for the year increased four-fold (from 39 in 2004 to 144 in 2005).
In the overall structure of the market, the share of Chinese cars is still little, however, it tends to grow, the bulk of the Chinese machines registered in Kazakhstan are commercial vehicles. Among medium-tonnage and large-tonnage Chinese trucks, the HOWO brand occupies more than a quarter of all registrations.
It is interesting that the growing popularity of Chinese brands in Kazakhstan coincided with the next stage in the development of the automobile industry in China itself, when this country became a world power for the production and consumption of cars. As new brands and models appeared, interest in these models also grew in Kazakhstan.
To date, the most popular cars in Kazakhstan secondary market are such brands as: Howo, Foton, Shacman, Lifan, Shaanxi, Dongfeng, XCMG. The main reason for the growing popularity of Chinese brands is the low price, which in the severe economic conditions is the determining factor for the Kazakhs. High interest from buyers, improvement of quality, readiness of Chinese companies to invest in Kazakhstan production and interest in the Russian market became the reasons for the development of Chinese brands’ production within the RK.
Some chinese car brands, such as: JAC, Ankai, Foton, Shacman, FAW, Geely (since 2016) have their own production line in Kazakhstan. The JAC car brand for the one year of production (since 2015) became so popular that received the “Halyk Markasy” award (literally means “National brand” award).
Analysts from Association of Automobile Business of Kazakhstan (AKAB) confirm the continued increasing trend of Chinese brands in the Kazakhstan market.


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Apple’s great victory in Chinese patent fight

In May 2016, Beijing Intellectual Property Office ruled that Apple Company and one of its retailers in Beijing, Zoomflight, violated local company Shenzhen Baili Marketing Services’ design patent. China’s Patent Law designates a design patent as new “shape, pattern, or the combination thereof, or the combination of the color with shape and pattern, which are rich in an aesthetic appeal” for industrial application.

According to Shenzhen Baili, the American company infringed its mobile phone 100c’s design by selling iPhone 6 and iPhone 6 plus. After reviewing the case, the Beijing Office ordered Zoomflight to stop selling these mobile phones on Chinese market, ruling in favor of the Chinese company.

Unsatisfied with the sale ban ruling, Apple and Zoomflight brought the case before the Beijing Intellectual Property Court which recently overruled the ban order. Indeed, on March 24th 2017, the Court not only did not recognized any infringement of Shenzhen Baili’s patent rights but also considered that the Beijing Office, by ordering the ban, did not follow the legal procedures since there were not sufficient evidence for patent infringement. The Court found that Apple’s mobile phones design was well distinguishable from consumers’ point of view.

At the present time, it is not known whether Shenzhen Baili will appeal against the ruling. Assuming the Chinese company will, the chances for it to be successful are pretty low. This patent dispute can be regarded as a great victory for Apple in China and once more, it proves that positive changes are happening in China regarding protection of intellectual property rights.

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Chevrolet Cruze will return to Russia under a new brand

Cars Chevrolet Cruze and Chevrolet Tracker can return to Russia, despite the hasty departure of from the country due to the economic crisis. The American brand plans to return to Russia under new brand “Ravon”.
Ravon is a new brand that has come to replace Daewoo in Russia. In Russia Chevrolet Cruze and Chevrolet Tracker will be produced under brand “Ravon” and will be sold by GM Uzbekistan. This brand was developed specifically for the automotive market in Russia.
At present, “ Ravon” range consists of four models – three sedans and one compact hatchback R2, which is an analogue of the Chevrolet Spark. The remaining trio is the Nexia R3, R4 and Chevrolet Gentra, and these models are also directly related to Chevrolet. Chevrolet Gentra – is a modified Chevrolet Lacetti with the bow from the sedan and stern from the hatchback, R4 is based on sedan Chevrolet Cobalt, while Nexia R4, which replaced well-known Nexia, is a copy of the American compact sedan Chevrolet Aveo.
Chevrolet Tracker is a compact city hatchback, whose name was changed from the original Trax specifically for Russia and Brazil market for a number of quite objective reasons. The car was introduced in 2013, and it is based on the GM Gamma II platform. In the Euro NCAP (The European New Car Assessment Programme) crash test, the hatchback received 5 safety stars with 85% protection of children and 64% protection of pedestrians.
The cost of Cruze and Tracker after their arrival in Russia under a new brand is not yet specified. Prices for the current Ravon range from 440 to 800 thousand rubles.


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Victory for BMW against a Copycat

Recently, the Beijing High Court had to give its opinion about BMW AG claiming a Chinese company was infringing its trademark rights. The luxurious German vehicle constructor registered its trademark ‘BMW’, ‘BMW and device’ as well as the Chinese transliteration ‘宝马’. The application of trademarks ‘Paul BMW’ and its Chinese transliteration ‘保罗宝马’ were later filed under classification 25 by Shenzhen Red Dragonfly Clothing Trading Co., Ltd and then approved in 2012. The trademark was later transferred to Wenzhou City Kaluochi Shoes Co., Ltd, the defendant before the Beijing High Court.

In 2014, BMW AG brought a lawsuit to the Trademark Review and Adjudication Board – referred to as TRAB – alleging the Chinese trademark was a copycat and that BMW had an international reputation in China. However, the TRAB ruled against the German company pointing out Paul BMW was registered under the classification 25 which covers clothing while BMW was registered under the classification 12 meant for vehicles. The TRAB considered the products were not similar and added BMW reputation was built in vehicle industry, not in clothing. Consequently, Paul BMW’s registration did not bring confusion to the public and hence, did not harm BMW AG’s interests.

Unsatisfied with the ruling, BMW AG brought the case to the Beijing Intellectual Property Court which stressed firstly that Kaluochi’s trademark was composed of BMW AG’s trademark ‘BMW’ and secondly, that both plaintiff and defendant products were similar under the classification of which they were registered. At this point, according to the Court, BMW AG’s international reputation was no longer necessary. Therefore the Court ordered Kaluochi to stop selling products under Paul BMW trademark. Right after the decision was made, Paul BMW’s owner appealed to the Beijing High Court which, again, ruled in favor of BMW.

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China has become the global leader in the Graphene Industry

China has become the largest graphene patent filer in the world surpassing 50,000 patent applications worldwide by September 2016, and this trend keeps growing. The graphene material has excellent electrical, thermal, optical and mechanical properties, new energy, aerospace and other fields, nevertheless Chinese filers still need to improve the quality of their patents.

In recent years, national policies have vigorously support this ambitious goal, becoming the focus on the development of new materials in “10 year plan”. China has made it clear that they need to accelerate the development of new materials, graphene, and bio based materials. Graphene appears as crown material to accelerate direction of China’s scientific and technological innovation in the twenty-first Century becoming the most powerful focus of China’s manufacturing.

China’s display of innovation in graphene industry technology has been shown in international conferences in recent years, witnessing the development level of China graphene industry achievements to the world, the improvements in filing patents and the recent developments in Chinese intellectual property laws to protect those new creations.

Chinese graphene industry technology with support of many partners are actively planning and organizing the “2017” (fourth) China international graphite graphene innovation conference, which will be held from September 24, 2017 to 26 in the ancient capital of the Six Dynasties, Nanjing.

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First approval of the Co-existence of trademarks in China

Recently, the role of trademark coexistence agreement has been questioned in the process of registration.

Already in December 2016, the Intellectual Property Court of Beijing ruled a case on coexistence of trademarks and hence had to clarify the situation. A trademark application was denied by the Trademark Review and Adjudication Board – referred to as TRAB – because of its many similarities with a prior trademark, which could have led to public’s confusion. It was denied although a trademark coexistence agreement was signed between the earlier mark owner and the applicant. The Intellectual Property Court of Beijing reversed the decision arguing that both rights’ holder and trademark’s applicant were sharing the same interest and also some distinction could be done. Consequently, similarities only between the trademarks do not suffice to reject such coexistence. The point of view of the rights holder and the new applicant must also be considered.

In February, another case highlighted the necessity to reach a consensus on the matter. The TRAB, in the line with IP Court of Beijing and Beijing High Court, rejected the coexistence of two similar trademarks considering it would create confusion to the public. The Supreme People’s Court overruled their decisions and enlightened the outcome of a conflict where a consent letter had been signed by the earlier trademark owner.

Indeed, by signing the consent letter, the cited owner agrees to the registration of a similar trademark. It is the first time the Supreme Court recognized two similar trademarks to be co-existed. The highest Chinese Court took a pragmatic decision in which it took into consideration consumers’ interests as well as both trademark’s owner and applicant. Naturally, both signatories had to express in the consent letter the divergences between the trademarks and in what extent the registration would not confuse the public.

However, in a latest similar case, the Appellate Body of Beijing High Court rejected the approval of a trademark application on the ground that the applied mark had so many similarities with the prior mark that the confusion would be inevitable. Therefore, it stressed that a coexistence agreement do not automatically leads to the registration of a trademark which need to be dissociated from the prior one.

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Schmitt & Orlov: Organization of a Customs Training in Bangkok

A Counterfeit Identification and Enforcement seminar was held on March 22, 2017 in Bangkok, organized by S&O in association with the Economic Crime Suppression Division Police in Bangkok (Economic Police) and the Customs Department of Thailand. In total, 30 officers took part to the training including 10 officers from the Custom Department and 20 officers from the Economic Police.

During the seminar, S&O reviewed some of its Thai cases and introduced its clients to the officials -their main product lines, brands and development- before discussing the situation of infringement in Thailand and giving a presentation on how to effectively identify counterfeit goods and protect client’s rights.

Special emphasis was placed on the fact that counterfeiting is not only a rampant problem in the capital but also in provinces, especially popular tourist destinations such as Krabi or Phuket. Indeed, Thailand is a major destination for infringing products, having also more and more infringers manufacturing in the country, which is why, updating the authorities and introducing them to brands are a necessary first step in supporting officials in their efforts to prevent counterfeiting from further developing into a settled industry in the country.

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