Docket No.: （2019）京73民终3794号

Docket No. transliteration: 3794, second instance (终), civil case (民), (2019) Beijing Intellectual Property Court (京73)

Lower Court Doccket No.: （2018）京0108民初21467号

Lower Court Docket No. transliteration: 21467, first instance (初), civil case (民), (2018) Haidian District People's Court of Beijing city (京0108)

STATEMENT OF THE CASE AND FACTS

SHENZHEN TENCENT COMPUTER SYSTEMS CO., LTD., 

(深圳市腾讯计算机系统有限公司)

Plaintiff-Appellee

v.

SHANGHAI KINGNET TECHNOLOGY CO., LTD., 

(上海恺英科技网络有限公司)

Defendant-Appellant

BEIJING LENOVO FM TECHNOLOGY CO., LTD. (北京联想调频科技有限公司) and BEIJING SHENQI TECHNOLOGY CO., LTD. (北京神奇工场科技有限公司), 

Defendants

Shenzhen Tencent Computer Systems Co., Ltd. (“Tencent”) was licensed to be the exclusive Chinese publisher of blockbuster video game Dungeon & Fighter (“DNF”), which was known as “地下城与勇士” in China, by its South Korean developer Neople and the exclusive user of the logos and trademarks registered by the developer in China.

Shanghai Kingnet Technology Co., Ltd. (“Kingnet”) was the general operator of Chinese game Dungeon and Leagues (“DNL”), whose original Chinese title was “阿拉德之怒”, and distributed the game for download in various online stores, including 3g.lenovomm.com, an app store platform developed and operated by Beijing Lenovo FM Technology Co., Ltd. (“Lenovo”) and Beijing Shenqi Technology Co., Ltd. (“Shenqi”)

Tencent filed a lawsuit against Kingnet, Lenovo, and Shenqi with the Haidian District People’s Court of Beijing city alleging that the DNL logo was deceptively similar to the DNF logo and used on a similar product and seeking 40 million yuan ($6.3 million) in damages.

The trial court agreed with Tencent’s argument that the two logos were similar and used on similar goods and services such as video games classified under Class 9 and 41. It was ultimately ruled that the notoriety of the DNF brand and the fact that Kingnet had managed to acquire clients and market share by the use of the similar mark constituted infringement and Kingnet must pay 3 million yuan ($470,000) in damages and 110,860 yuan ($17,000) in reasonable expenses to Tencent.

The court dimissed Tencent’s infringement claim against defendents Lenovo and Shenqi, the developers and maintainers of the app store platform through which Kingnet sold Dungeon and Leagues. In the court’s opinion, Lenovo and Shenqi properly performed a duty of care by vetting the permits and certificates of the video game before hosting it and didn’t willingly infringe the DNF trademarks and logos.

Kingnet appealed the case to the Beijing Intellectual Property Court. The appeals court upheld the lower court’s decision and adjusted the amount in reasonable expenses awarded to the plaintiff.

Beijing Lusheng Law Firm represented two defendants Lenovo and Shenqi.

ANALYSIS

Platform operators have the reporting and due diligence obligations to collect and verify the information on their users and sellers.

Defendants Lenovo and Shenqi signed a contract with Kingnet to market and distribute video game Dungeon and Leagues and gained material profit from its sales. A greater duty of care came with greater potential profit. The court dismissed the claim against defendants Lenovo and Shenqi on the basis that they offered sufficient evidence in support of reasonable care it had exercised and didn’t possess bad-faith intent to infringe the well-known logo.

The “Supreme People’s Court Regulations concerning Some Issues of Applicable Law in Hearing Civil Dispute Cases on Infringement of the Right to Dissemination through Information Networks (《最高人民法院关于审理侵害信息网络传播权民事纠纷案件适用法律若干问题的规定》)”, which was promulgated and took effect in 2013, was applicable in this case.