Case Brief

As an innovative product that integrates cutting-edge technologies (including inverse-field acoustics technology, multi-channel Deep Neural Network (DNN) call noise reduction algorithms, head-motion tracking technology, IP54 water and sweat resistance technology, and Huawei's self-developed spatial discrimination model algorithms) with pure geometric minimalist aesthetics and that was meticulously developed by Huawei through years of research and development and substantial investment, the "FreeClip" earbuds have rapidly captivated consumers with groundbreaking innovative technology and striking aesthetics since their overseas launch in December 2023, igniting a worldwide sensation and emerging as the market leader among similar products.

The defendant, a certain technology company, shortly after the global launch of Huawei's "FreeClip" earbuds, maliciously rolled out "counterfeit" earbuds that merely have an appearance highly similar to Huawei's "FreeClip" earbuds. Meanwhile, the defendant extensively and aggressively marketed the "counterfeit" earbuds across major online e-commerce platforms at abnormally low prices, while employing false advertising claims such as "budget alternatives to high-end/official products" and "fully replicated top-tier functionality", thereby deceiving consumers into believing that the "counterfeit" earbuds possess the same cutting-edge technologies, functions, and striking aesthetic design as Huawei's "FreeClip" earbuds. However, within a short period, the "counterfeit" earbuds faced numerous consumer complaints due to defects, including low quality. The proliferation of these "counterfeit" earbuds not only severely eroded the market share of Huawei's genuine "FreeClip" earbuds, causing significant economic losses to Huawei within just three to four months, but also severely damaged the reputation of Huawei's genuine "FreeClip" earbuds.

To promptly assist Huawei in eliminating counterfeit products from the market, prohibiting the large-scale distribution of "counterfeit" earbuds in the short period, and minimizing losses for both Huawei and innocent consumers, Unitalen responded swiftly, comprehensively studied the case, and ultimately recommended filing a lawsuit with the Nanjing Intermediate People's Court based on the copyright of works of applied art and the right distinctive trade dress of the "FreeClip" earbuds. Simultaneously, Unitalen filed with the court petitions for property preservation during litigation and a behavioral injunction.

Court Hearing and Case Outcome

The Nanjing Intermediate People's Court actively accepted the case, promptly and meticulously conducted a thorough review on the right basis of the case, infringement behaviors, damages, and the urgency of the case, from the perspective "for shapes or designs that may combine practicality and artistry, parties may choose to seek protection under the Copyright Law or to seek design patent protection under the Patent Law, with distinct focuses of protection... allowing works of applied art to obtain copyright and design patent protection simultaneously can compensate for the weaknesses of design patent protection in terms of acquisition conditions, procedures, protection periods, and scope of protection", and timely made a property preservation ruling, exerting significant pressure on the full-network distribution and mass sales of the "counterfeit" earbuds.

Meanwhile, Unitalen also fully leveraged its professional expertise and actively cooperated with the court and the plaintiff, successfully facilitating, within a short period, a comprehensive settlement agreement whereby the parties agreed to cease the infringement and compensate for the losses. The case was ultimately closed when Huawei withdrew its lawsuit, successfully and swiftly prohibiting the "counterfeit" earbuds from being sold in the market, and effectively safeguarding Huawei's legitimate rights and interests, as well as market order.

Significance of the case

The core significance of this case lies in the fact that the court, from the perspective of fully protecting intellectual property, clearly confirmed the adjudication rule that "(for works of applied art) right holders have the right to choose to seek protection under the Copyright Law or to seek design patent protection". Additionally, based on comprehensively considering factors such as the extremely short interval between the global launch time of "FreeClip" earbuds product and the defendant's infringement time, as well as the vast impact of infringing products on the genuine product market during the best-selling period of "FreeClip" earbuds, the court, by timely making a property preservation ruling that complies with the principle of proportionality, quickly and effectively curbed the spread of the "counterfeit" earbuds, and thus helped the right holder to firmly safeguard the market defense line and market share of the first-launch genuine products.