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31 May 2016TrademarksSeagull Haiyan Song

Closer convergence: Chinese and US entertainment law

The year 2015 was a prosperous one for the Chinese film industry. China’s film box office exceeded $6.8 billion—an almost 50% increase from 2014. Local productions contributed to more than 61% of the total revenue. It is estimated that China will surpass the US and become the number one box office by revenue by 2018.

It was also a monumental year for Chinese entertainment law. The success at the box office and local productions brought about a record number of cases before the Chinese courts, many of which are of potential interest to general entertainment law practices.

They include the substantial similarity test in copyright infringement cases (Chiung Yao v Yu Zheng, Beijing High Court), protection of movie titles (Huaqi v Enlight Media, Beijing High Court), protection of story characters (Blizzard Entertainment v Shanghai Youyi Games, Shanghai 1st Intermediate Court), protection of privacy (Yang Jiang v Sungari Auction, Beijing High Court, 2014), and the treatment of the freedom of speech and the public’s right to information (Fang Zhou-Zi v Cui Yong-Yuan, Beijing 1st Intermediate Court; and World Luxury Association v The Beijing New Press, Beijing 3rd Intermediate Court).

A review of these cases demonstrates an important and common trend in the legal decisions and opinions—an increasing and yet somewhat surprising convergence of the Chinese entertainment law to the century-old practice in the US.

This article focuses on the legal issue of protection of movie titles. By discussing and comparing two cases related to this subject between China and the US, the analysis aims to provide a snapshot of the trend.

“Lost on Journey”

In Huaqi, the plaintiff Huaqi is a Chinese film studio. It produced and owns the copyright to the big-hit Chinese movie “Lost on Journey” in 2010. Before Huaqi started to produce a sequel, Enlight Media hired several original cast members of the movie “Lost on Journey” and produced a film titled “Lost on Journey Againin Thailand” in 2012. Huaqi brought a lawsuit against Enlight Media under the Chinese Anti-Unfair Competition Law, seeking protection of its movie title “Lost on Journey” as a unique name for a well-known commodity.

During appeal, the Beijing High People’s Court considered the following factors when deciding whether Enlight Media violated article 5(2) of Chinese Anti-Unfair Competition Law, ie, whether the unauthorised use of a movie title similar to that of the plaintiff caused confusion among the public. Specifically, these were (1) whether the plaintiff’s movie is a “well-known commodity”; (2) whether the title of the plaintiff’s movie is a “unique name”; and (3) whether the defendant’s unauthorised use of the movie title for its own product caused confusion among the public.

With regard to the first factor, after the court considered evidence such as the marketing expenses of the plaintiff’s film, its promotional efforts, the box office revenue, and public and critical acclaim for the movie, the court concluded that the plaintiff’s movie “Lost on Journey” was a well-known commodity, as it “has achieved wide acclaim and commercial success”.

“The US and Chinese courts both considered factors such as the uniqueness of the plaintiff’s mark, evidence of actual confusion and bad-faith behaviour of the defendant in their legal reasoning.”

As to the second factor, the court affirmed that the plaintiff’s movie title “Lost on Journey” constitutes a “unique name”, recognising that the Chinese character in the movie title “囧” (Pinyin: jiǒng) is a unique expression, which originated from an ideographic emoticon and was used rather infrequently to describe feelings of annoyance, shock, embarrassment and awkwardness.

As for the third factor, ie, whether the defendant’s unauthorised use of the movie title caused confusion among the public, the court again ruled in favour of the plaintiff, finding that there was actual confusion among the public, film critics and journalists, who were led to believe that defendant’s movie was a de facto sequel to the plaintiff’s movie. As such, the court found Enlight Media to have violated article 5(2) of the Chinese Anti-Unfair Competition Law.

The River Kwai

The analysis of the Beijing court in the dispute over “Lost on Journey” coincides with a decision made by a New York court in the River Kwai case more than a decade ago. In Tri-Star Pictures v Unger, the court was asked to determine whether the defendant’s movie title “Return from the River Kwai”in 1989 constituted trademark infringement against the plaintiff’s award-winning film “The Bridge on the River Kwai” from 1957.

In order to prevail on a trademark infringement claim under the US Lanham Act, the plaintiff must show (1) that its trademark (eg, the disputed movie title) is subject to trademark protection under the Lanham Act; and (2) that the defendant’s use of the mark is likely to cause confusion with the plaintiff’s mark.

With regard to the first factor, the court affirmed that movie picture titles might be subject to trademark protection if “the title acquires secondary meaningwhen it becomes so well known that consumers associate it with a particular author’s work”. After reviewing the evidence showing the popularity and world acclaim of the plaintiff’s movie, the court concluded that the plaintiff’s movie title acquired secondary meaning and was therefore subject to trademark protection under the Lanham Act.

As to the second factor, ie, likelihood of confusion, the court applied the same analysis set forth in Polaroid Corp v Polaroid Electronics Corp and held that Tri-Star had met most, if not all, of the Polaroid factors, finding a likelihood of confusion between the plaintiff’s movie title and that of the defendant. As such, the court ruled that Unger’s use of a confusingly similar movie title with that of the plaintiff constituted trademark infringement.

Common factors

When we compare the Chinese case around “Lost on Journey” with the US case surrounding the “River Kwai” films, we can easily identify common elements in judicial reasoning that were considered by both the Chinese and the US courts. For instance, the Chinese and US judges both considered the reputation of the plaintiff’s movie, shown by its box office revenue, marketing efforts, film awards and public acclaim, etc, although for different purposes.

Inthe case on “Lost on Journey”, the purpose was to determine whether the plaintiff’s movie qualified as a “well-known commodity” defined under Chinese Anti-Unfair Competition Law. Inthe other case, the purpose was to decide whether the plaintiff’s movie title acquired secondary meaning, ie, was well-known enough to enjoy protection under the Lanham Act. Also, the US and Chinese courts both considered factors such as the uniqueness of the plaintiff’s mark, evidence of actual confusion and bad-faith behaviour of the defendant in their legal reasoning.

There are obvious differences between the approaches of the two jurisdictions with respect to movie title protection. In particular, the Chinese court relied on anti-unfair competition law, rather than trademark law, to afford protection to movie titles.

There are various theories behind the different treatments. Among them is that China’s trademark law has a narrower protection scope than the US trademark law. For instance, China’s trademark law does not protect unregistered trademarks unless the plaintiff can prove either that its unregistered trademark is a well-known trademark in China—a significantly high threshold to meet—or that the defendant has registered an identical or similar trademark through unfair means. China’s Anti-Unfair Competition Law, on the other hand, is drafted broadly enough to provide an alternative remedy should the injured party find the existing Chinese trademark law insufficient to address the issue.

With around 100 years of experience in the film industry, the US case law has developed to cover almost every aspect of legal issues related to this industry: from copyright infringement involving plays, magazine covers and television commercials to protection of movie titles, story characters, trademark logos and toys in movies; and from respecting the private right to a good life, personal image and reputation to upholding the freedom of speech and the public right to information. It can be argued that the US legal system in the entertainment industry has a great deal to offer to the Chinese entertainment industry.

A few years ago, Chinese legal scholars and practitioners were struggling with a lack of case law guidance in the entertainment law field—the industry was booming but disputes were rare.This has changed and today, for almost every single legal issue related to the entertainment industry, we see questions asked, cases litigated and conversation underway. The convergence of the Chinese entertainment law to the century-old practice in the US will continue until China has established its own rules and understanding about a robust, growing industry.

Seagull Haiyan Song is a law professor at  Loyola Law School Los Angeles and senior adviser at  Hogan Lovells in Los Angeles. She can be contacted at: seagull.song@lls.edu.

She is author of “Entertainment Law” (2014)—the Chinese treatise on this subject, and this article is based on an excerpt from her article, “Chinese Entertainment Law Year 2015 Review: Is It Converging with the U.S. Practice”, from The George Washington International Law Review (volume 49, 2016, forthcoming).

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