This is a Supreme Court case, I hope it will be helpful to you.

Beijing Higher People’s Court’s Civil Judgment on the Appeal Case of New Oriental School’s Copyright Infringement and Trademark Exclusive Rights Dispute

Published Time: (2005-02-05 09:22:52)

(2003) Gao Minzhong No. 1393

Published time: 2005-02-03 16:51:15

-------- -------------------------------------------------- -----------------------

Appellant (defendant in the original trial) Private New Oriental School, Haidian District, Beijing, domiciled in Zhongguancun, Haidian District, Beijing Road No. 15.

Legal agent Yu Minhong, principal.

The authorized agent is Wang Lihua, a lawyer at Beijing Tianyuan Law Firm.

The authorized agent is Li Qi, a lawyer at Beijing Tianyuan Law Firm.

The respondent (plaintiff in the original trial) (USA) Educational Testing Service (EDUCATIONAL TESTING SERVICE) is domiciled at Rosedale Road and Carter Road, Princeton, New Jersey 08541, USA.

Legal Representative Kurt Landgraf, President and Chief Executive Officer.

The authorized agent is Zhou Qiang, a lawyer at Beijing Zhengjian Yongshen Law Firm.

The authorized agent is Dong Yongsen, a lawyer at Beijing Zhengjian Yongshen Law Firm.

The appellant, New Oriental School, a private school in Haidian District, Beijing (referred to as New Oriental School), was dissatisfied with the No. 35 No. 35 No. 1 Middle School Zhichuzi of Beijing No. 1 Intermediate People’s Court (2001) due to disputes over copyright infringement and trademark exclusive rights. No. Civil Judgment, appeal to this court. After accepting the case on December 8, 2003, this court formed a collegial panel in accordance with the law and held a public hearing on the case on April 28, 2004. Wang Lihua and Li Qi, the authorized agents of the appellant New Oriental School, and Zhou Qiang and Dong Yongsen, the authorized agents of the appellee (USA) Educational Testing Service (ETS), attended the court to participate in the litigation. The case has now been concluded.

The Beijing No. 1 Intermediate People’s Court ruled that both China and the United States are members of the Berne Convention for the Protection of Literary and Artistic Works. According to this convention, China is obliged to provide legal protection for the works of U.S. nationals in China. Protect. As the host and developer of the TOEFL exam, ETS has independently designed and created TOEFL exam questions, and has registered copyrights for 53 sets of TOEFL exam questions in the United States. Judging from the content of the TOEFL test questions, they are original and belong to the category of works protected by China's copyright law. New Oriental School signed a "Cassette Tape Reproduction License Agreement" and a Literary Works Reproduction License Agreement with ETS, which are valid until August 16, 1998, and clearly stipulate the scope of use. However, New Oriental School sold the TOEFL test questions in the form of publications to unspecified people on campus and online, which exceeded the scope of use agreed in the agreement. New Oriental School did not sign a new use agreement with ETS after the expiration of the agreement. New Oriental School copied ETS's copyrighted TOEFL test questions without permission from ETS, and sold the test questions in the form of publications through Internet channels. Its behavior infringed ETS's copyright. ETS has approved and registered TOEFL as a trademark, and its trademarks are all within the validity period. Therefore, according to the Chinese Trademark Law, ETS enjoys exclusive trademark rights for TOEFL in categories 9, 41, and 68, and its legitimate rights and interests are protected by law. New Oriental School displays the word TOEFL in an eye-catching font on the cover of its TOEFL test publications. The product categories it uses TOEFL are the same as the categories 9, 41 and 68 registered by ETS. The marked ones The word TOEFL is also completely consistent with the registered trademark of ETS, so New Oriental School's behavior constitutes an infringement of the exclusive rights of ETS's registered trademark.

New Oriental School should bear civil responsibilities such as stopping the infringement, compensating losses, eliminating the impact, and making an apology to ETS for its infringement of copyright and trademark rights.

The calculation of the amount of compensation in this case should be carried back two years from November 15, 2000, that is, from November 15, 1998. The audit report shows that New Oriental School's income mainly comes from materials fees and training fees, and the calculation of the compensation amount is mainly based on these two incomes. ETS paid certain fees in the process of asserting its rights, and these fees are directly related to the litigation in this case, and this court will determine them at its discretion. The profits earned by New Oriental School from infringement of copyright and trademark exclusive rights overlapped with each other, and this court calculated them together. In accordance with the provisions of Article 2, Paragraph 2, Article 47, Item (1) of the Copyright Law, and Article 51, Article 52, Item (1) of the Trademark Law, the judgment is made: ① New Oriental School shall have ② New Oriental School shall cease infringement of ETS's copyright and shall submit all infringing materials and films containing infringing materials to the court for destruction within 15 days from the date of the judgment. ② New Oriental School shall cease infringement of ETS's exclusive trademark rights from the date of the judgment. ; ③ New Oriental School will publicly apologize to ETS in the "Legal Daily" within 30 days from the date the judgment takes effect; ④ New Oriental School will compensate ETS RMB 5 million and reasonable litigation expenses of RMB 522,000 within 15 days from the date the judgment takes effect; ⑤ Dismiss ETS's other claims.

New Oriental School was dissatisfied with the first-instance judgment and appealed to the Beijing Higher People’s Court. New Oriental School appealed, claiming that the first and first instance judgments found that ETS had copyright in its TOEFL test questions, which lacked factual basis. In fact, examination questions cannot be protected by our country's laws as works. Second, New Oriental School only copied a small amount of TOEFL test questions at two points in time, 1997 and 2000. However, the first-instance judgment based on the "Audit Report" determined that we copied and sold a large number of TOEFL test questions. In fact, the Audit Report has no basis. Third, ETS made a request for compensation for reasonable litigation expenses only after the trial and provided relevant evidence. The court of first instance accepted these evidences without cross-examination and supported its claim. This was obviously wrong. . Fourth, New Oriental School only used the word TOEFL narratively or descriptively in the relevant training materials and did not use TOEFL as a trademark. There was no possibility of confusion about the source of the goods. In fact, it never caused confusion. In the first instance, However, the court ruled that it infringed ETS's exclusive trademark rights, which was obviously wrong. Fifth, there is no basis for the court of first instance to rule that we should compensate ETS for its huge economic losses. New Oriental School's provision of examination training did not infringe ETS's copyright, but the court of first instance used training fee income as the basis for determining the amount of compensation, which was obviously unreasonable. Sixth, New Oriental School only sold a small amount of relevant training materials to people other than students, but the first-instance judgment ordered us to apologize in the nationally distributed "Legal Daily", which is not fair and reasonable. Request the second-instance court to revoke the second, third, and fourth items of the first-instance judgment and change the judgment in accordance with the law. ETS obeys the original judgment.

After trial, it was found that ETS was founded in 1948, and the TOEFL test was developed by it. From 1988 to 1995, ETS approved and registered "TOEFL" trademarks No. 746636, 771160, and 176265 in China, and the scope of approved use was cassette tapes, examination services, publications, etc. From 1989 to 1999, ETS registered the copyright of the 53 sets of TOEFL test questions it developed with the U.S. Copyright Office.

New Oriental School was established on October 5, 1993. It is a private, non-enterprise unit, mainly engaged in foreign language teaching services. In January 1996, the Beijing Administration for Industry and Commerce inspected New Oriental School for copying TOEFL test questions without authorization and ordered it to stop infringement. Later, New Oriental School stopped using TOEFL test materials and proactively contacted ETS to discuss the paid use of TOEFL test materials. However, it received no reply and continued to provide TOEFL test materials to students.

In January 1997, the Beijing Municipal Administration for Industry and Commerce inspected New Oriental School again and withheld books and materials such as "Selected TOEFL Complete Test Questions." On February 18, 1997, Yu Minhong, the legal representative of New Oriental School, went to the Beijing Municipal Administration for Industry and Commerce for questioning and issued a letter of guarantee, admitting that the copying and distribution of TOEFL test questions infringed on ETS's copyright, and guaranteed that the infringement would not occur again.

On August 17, 1997, Zhongyuan Xinda Intellectual Property Agency Co., Ltd., ETS’s copyright agent in mainland China, signed a “Cassette Tape Reproduction License Agreement” and a “Text Works Reproduction License Agreement” with New Oriental School. "License Agreement" allows New Oriental School to copy the sound recordings and written works (***20 sets of test questions) listed in the attachment of the agreement in a non-exclusive manner for internal use, but not for external sales. The agreement is valid for one year.

On November 9, 2000, Zhongyuan Xinda Intellectual Property Agency Co., Ltd. notarized the purchase of "TOEFL Series Teaching Materials" at New Oriental School, including: "TOEFL Series Teaching Materials Listening Volume", "TOEFL Series Teaching Materials Grammar Volume" ", "TOEFL Series Textbook Composition Volume", "TOEFL Series Textbook Reading Volume", "Latest Selected Practice Questions Volume 1", "Latest Selected Practice Questions Volume 2", "Latest Selected Practice Questions Volume 3" 8 books and 25 listening tapes.

On November 15, 2000, the Xuanwu Branch of the Beijing Administration for Industry and Commerce conducted an inspection on New Oriental School and seized some suspected infringing books. On December 25, 2000, entrusted by ETS, Beijing Zhengjian Yongshen Law Firm notarized the purchase of "TOEFL series teaching materials" at New Oriental School, including: listening volume, listening text answers, grammar volume, composition volume, reading volume, the latest The first volume of selected exercises and 21 boxes of listening tapes are included. On January 4, 2001, ETS filed a lawsuit with the Beijing No. 1 Intermediate People's Court, accusing New Oriental School of infringement of its copyright and trademark rights.

On February 22, 2001, the court of first instance implemented evidence preservation on the financial accounts of New Oriental School and entrusted Beijing Tianzheng Accounting Firm to audit the relevant financial accounts. The audit results showed that: New Oriental School The income is mainly divided into training income and data income. TOEFL training income: 5,210,769 yuan in 1998, accounting for 20.1% of the total training income for the year; 8,498,039 yuan in 1999, accounting for 23.5% of the total training income for the year; 19,795,214 yuan in 2000, accounting for 23.5% of the total training income for the year 24.3 of training income. Data revenue: 3,012,702 yuan in 1998, 4,931,191 yuan in 1999, and 6,983,357 yuan in 2000. The training fee charged for TOEFL residential classes includes the material fee. In addition, during the first instance hearing of this case, the two parties compared the relevant TOEFL test questions on which ETS claimed rights with the alleged infringement. The comparison results are as follows: the allegedly infringing parts in the listening volume, listening text answers, grammar volume, composition volume, reading volume, and the latest exercise questions in Volumes 1, 2, and 3 are consistent with the content of the relevant TOEFL test questions; the listening tape is consistent with the relevant TOEFL test questions Most of the TOEFL test questions are the same. In addition, the word "TOEFL" is prominently used on the covers and packaging of "TOEFL Listening Tapes" and "TOEFL Series Textbooks".

The above facts include the trademark registration certificates No. 746636, 176265, and 771160, the temporary detention certificate of the Beijing Municipal Administration for Industry and Commerce, Yu Minhong’s conversation record and letter of guarantee, "Cassette Reproduction License Agreement", " License Agreement for Reproduction of Literary Works", Audit Report No. 431 of Beijing Tianzheng Accounting Firm Co., Ltd., notarization certificate issued by the Beijing Notary Office, notarial certificate issued by the Chongwen District Notary Office, the physical objects of books and audio tapes accused of infringement and both parties Statements and other supporting evidence in the record.

This court believes that China and the United States are both member states of the Berne Convention for the Protection of Literary and Artistic Works. According to Article 2, paragraph 2, of the Copyright Law and Article 3 of the Berne Convention for the Protection of Literary and Artistic Works, According to the provisions of paragraph 1(A) of Article 1, my country is obliged to protect the works of U.S. nationals in China. Article 2 of the "Regulations for the Implementation of the Copyright Law" stipulates that works referred to in the Copyright Law refer to intellectual creations in the fields of literature, art and science that are original and can be reproduced in some tangible form.

TOEFL test questions are divided into four parts: listening, grammar, reading and writing. They are developed and designed by ETS. In terms of the design and creation process, each test question requires multiple people to go through multiple steps and be creative. It can only be completed by labor and is original. It is a work within the meaning of my country's copyright law and should be protected by my country's laws. The entire set of test questions compiled thus should also be protected by our country's laws.

According to the facts found in this case, New Oriental School copied and distributed TOEFL test questions for commercial purposes without the permission of the copyright owner ETS, and its use of the works went beyond classroom teaching. Therefore, New Oriental School’s defense that its relevant behavior was a reasonable use of TOEFL test questions will not be accepted. New Oriental School also claims that it is a school run by social forces and is a non-profit institution according to the provisions of the Private Education Promotion Law. This court believes that there is no necessary connection between the purpose of the establishment of New Oriental School and whether it infringes the copyright of ETS. As long as the behavior performed by New Oriental School is for-profit, it will inevitably infringe the copyright of ETS, and this defense of New Oriental School cannot be established.

In addition, in 1997, Yu Minhong, the legal representative of New Oriental School, issued a letter of guarantee that infringement would not occur again to the Beijing Municipal Administration for Industry and Commerce, as well as a work license agreement signed with Zhongyuan Xinda Intellectual Property Agency Co., Ltd. It also shows that New Oriental School recognizes that ETS has the copyright to the TOEFL test questions and is fully aware that its relevant actions have infringed ETS's copyright.

To sum up, New Oriental School’s act of copying and publicly selling TOEFL test questions has infringed ETS’s copyright and should bear corresponding legal liability. However, this court should also point out that in view of the special nature of the TOEFL test questions and the special form and purpose of New Oriental School's use of this work, New Oriental School's explanation of TOEFL test questions in classroom teaching without using infringing materials should fall under Article 1 of the Copyright Law. The fair use of relevant works as stipulated in Article 22 does not constitute an infringement of the copyright of others.

Under the current social conditions in our country, publishing and distribution are special industries controlled by the state, and publications are special commodities. The identification of the source of a publication is generally achieved through the author of the publication and the publishing unit. . In this case, although ETS legally registered the TOEFL trademark in publications and audio tapes, and New Oriental School prominently used the word "TOEFL" in the "TOEFL Series Textbooks" and "TOEFL Listening Tapes," New Oriental School's use of "TOEFL" was Make descriptive or narrative use. Its purpose is to explain and emphasize that the content of the publication is related to the TOEFL test, and to facilitate readers to know the content of the publication, but not to indicate the source of the publication and not to cause readers to misunderstand or confuse the source of the product. The first-instance judgment found that New Oriental School's relevant actions infringed ETS's exclusive trademark rights and were inappropriate, and this court corrected it.

The audit report shows that New Oriental School’s income under TOEFL mainly includes material fees and training fees, and the material fees for TOEFL boarding students are included in the training fees. It was not inappropriate for the court of first instance to determine the corresponding proportion of TOEFL data income with reference to the proportion of TOEFL training income in the total annual training income, but it was not rigorous enough to use a certain proportion to calculate the data income of TOEFL boarding students as appropriate. During the second instance of this case, it was found that the income of TOEFL boarding students in 1999 and 2000 was 773,472 yuan.

Therefore, this court confirmed that New Oriental School’s income from infringing materials under TOEFL was 3,740,186.2 yuan, which should be compensated to ETS as illegal profits. The reasonable expenses of RMB 22,000 incurred by ETS for the litigation in this case should also be compensated. To sum up, the first-instance judgment clearly established the facts and correctly applied the law on the issue of New Oriental School’s infringement of ETS copyright. However, the determination and handling of the infringement of trademark exclusive rights and the amount of compensation were also inappropriate. This court should make corrections as appropriate. The grounds of appeal of the appellant New Oriental School are partially established, and its corresponding appeal request should be supported by this court.

Accordingly, in accordance with the provisions of Article 153, Paragraph 1, Item (3) of the "Civil Procedure Law of the People's Republic of China", the judgment is as follows:

1. Items (1), (3), and (5) of the Civil Judgment No. 35 of Beijing No. 1 Intermediate People’s Court (2001) No. 1 Zhongzhichuzi; namely: (1) Private New Oriental in Haidian District, Beijing The school shall immediately stop infringing the copyright of the TOEFL test questions of the (U.S.) Educational Testing Service Center as of the effective date of the judgment, and submit all infringing materials and films of printed infringing materials to the court for destruction within fifteen days of the effective date of the judgment; (3) New Oriental School, a private school in Haidian District, Beijing, publicly apologized to the (U.S.) Educational Examination Service Center in the Legal Daily within thirty days from the date of the judgment taking effect, to eliminate the impact of its infringement (overdue performance, the court The main text of the judgment will be published in the newspaper, and the cost will be borne by New Oriental School, a private school in Haidian District, Beijing); (5) Other litigation claims of the (U.S.) Educational Examination Service Center will be dismissed.

2. Items (2) and (4) of the Civil Judgment No. 35 of Beijing No. 1 Intermediate People’s Court (2001) No. 1 Zhongzhichuzi; namely: (2) Haidian District, Beijing The private New Oriental School shall immediately stop infringing the exclusive rights of the (U.S.) Educational Examination Service Center's trademark as of the date of the judgment; (4) The private New Oriental School in Haidian District, Beijing shall compensate the (U.S.) Education Examination within 15 days as of the date of the judgment. The service center suffered an economic loss of RMB 5 million and reasonable litigation expenses of RMB 522,000;

3. New Oriental School, a private school in Haidian District, Beijing, shall compensate (U.S.) Educational Examination Services within 15 days from the date of entry into force of this judgment. The center’s economic losses were RMB 3,740,186.2 and reasonable litigation expenses were RMB 22,000.

The first-instance case acceptance fee is 118,563.18 yuan, of which 58,553.18 yuan (already paid) will be borne by the (U.S.) Educational Examination Service Center, and 60,010 yuan will be borne by the private New Oriental School in Haidian District, Beijing (when this judgment takes effect) The first-instance audit fee is 42,860 yuan, which is borne by the private New Oriental School in Haidian District, Beijing (which is to be paid within 7 days from the date this judgment takes effect); the second-instance case acceptance fee is 118,563.18 yuan, which is borne by the (U.S.) Education Examination The service center shall bear 60,010 yuan (to be paid within 7 days from the date of this judgment taking effect), and the private New Oriental School in Haidian District, Beijing shall bear 58,553.18 yuan (already paid).

This judgment is final.

Presiding Judge Liu Jixiang

Judge Wei Xiangling

Judge Sun Suli

December 27, 2004

Secretary Sun Na