[People's Court Daily] SIPCConcluded a Foreign-Related Case Involving Copyright Infringement and Decided That the Static ModelsConstitute Worksand That Two Chinese Companies Should Pay a Compensation of RMB 500,000 September 25, 2019 People's Court Daily 3rdEdition: Now in session A top-notch educational block kit containsparts such as fences, turntables, crank transmission mechanism and motors that canbe built into 30 mechanical structures such as a pulley block, a beam bridge, and a crane through different combinations.As a teaching toolwidely used in schools and educational training institutions,this block kit appeared in courtlately. On September 19, 2019, the Shanghai Intellectual Property Court (SIPC) made the final judgment in the case over copyright infringement and unfair competition involvingFischertechnik GmbH (the Appellant, Plaintiff of first instance, hereinafter referred to as "Fischertechnik GmbH"), Shanghai Dongfang Teaching Aid Co., Ltd. (the Appellee, Defendant of first instance, hereinafter referred to as "Dongfang") and Shanghai Yaxun Intelligent Robot Technology Co., Ltd. (the Appellee, Defendant of first instance, hereinafter referred to as "Yaxun"). Based on the first-instance judgment ordering Dongfang and Yaxunto immediately stop infringing the copyright of the graphic works involved enjoyed by Fischertechnik GmbH, the second-instance judgment added that Dongfang and Yaxunshould also immediately stop infringing the copyright of the 30 model works enjoyed by Fischertechnik GmbH.The second-instance judgment also raised the amount of compensation, and the two Appellees were ordered to jointly compensate the AppellantRMB 500,000 for its economic losses according to the maximum amount of compensation under the Copyright Law, and to pay RMB 75,000 extra for the application of property preservation and other reasonable expenses. Fischertechnik (hereinafter referred to as the "copyrighted product") is a set of prototyping engineering blocksdesigned by the founder of Germany's Fischer Group since 1964.Fischertechnik GmbH, a member of Fischer Group, launched the copyrighted product in January 2004, which contains a variety of assembly components.consumerscan follow the steps set out in the installation instructions and build 30 static modelssimulating different mechanical and structural principles.According to Fischertechnik GmbH, the attached installation instructions contain thedrawings of 30 constructed static models and 102 drawings of theassembly components and assembly steps and constitute the sketches under the Copyright Law, and the 30 constructed static 3D models constitute 3D works. Through investigation, Fischertechnik GmbH found that Dongfang purchased the copyrighted product in 2009 from Beijing Cedutech Co., Ltd.,theauthorized sales agent of Fischertechnik GmbH in China.Then Dongfang and Yaxun worked together to produce and sellthe "Creative Combination Models—Structural and Mechanical Principles Combined" (hereinafter referred to as the "product involved"), which completely imitated and copied the copyrighted product, hence the infringement ofthe right of authorship, reproduction and distribution enjoyed by Fischertechnik GmbH. Fischertechnik GmbH believed that Dongfang and Yaxun had seriously damaged its legitimate rights and interests as their product could cause misidentification and confusion to the relevant public. So it filed a lawsuit, requesting the court to order Dongfang and Yaxun to immediately stopinfringing the copyright enjoyed by it for the3D works in "fischertechnik—mechanical and structural combination" andthe design drawings and sketches in the installation instructions, to immediately destroyall the assembly components and assembly manuals in the product involved, which was co-produced by them and infringed the copyright of Fischertechnik GmbH, and to jointly compensate Fischertechnik GmbH RMB 1 million for its economic losses, application for property preservation and other reasonable expenses. Dongfang and Yaxun jointly argued that the drawings of the static models, assembly components and assembly stepsof the copyrighted product are very limited in means of expression and should not be protected by the Copyright Law. Besides, the 30 constructed static models claimed for by Fischertechnik GmbH only show a process. They are not final. They are not 3D works either as they are not fixed in a relatively stable and lasting way, so they cannot be protected by Copyright Law. Therefore, their product did not constitute infringement. After hearing the case, the first-instance court held that, first of all, the copyrighted works involved in the case are 102 drawings of assembly components, 30 drawings of assembly steps and 30 drawings of static 3D models included in the Installation Instructions of the copyrightedproduct "Mechanical and StructuralCombination Package," and they constitute graphic works.The 100 drawings of assembly components, 30 drawings of assembly steps, and 30 drawings of constructed static 3D models included in the assembly manual of the "Structural and Mechanical Principles Combined,” the product involved which is accused of infringement, are substantially the same as the corresponding copyrighted works. Dongfang and Yaxun have infringedthe right of authorship, reproduction and distribution enjoyed by Fischertechnik GmbH for the graphic works involved by reproducing and distributing the assembly manual. Second, the copyrighted product produced and sold by Fischertechnik GmbHismerely assembly componentsinstead of 30 constructed static models. The30 static models which the company claimed should be protected as 3D worksare “in draft” and only “available for construction.” They are not“constructed” in external expression. Therefore, theycannot be protected by the Copyright Law as works for they exist only in thoughts andare not perceptible. Accordingly, the first-instance judgment orderedDongfang and Yaxun to immediately stop infringingthe copyright enjoyed by Fischertechnik GmbH for the graphic works involved in the installation instructions of the “Mechanical and Structural Combination Package” of fischertechnik, and to jointly compensate Fischertechnik GmbH RMB 160,000 for its economic losses, application for property preservation and other reasonable expenses. Refusing to accept the first-instance judgment, Fischertechnik GmbH appealed to the SIPC. Fischertechnik GmbH claimed that all the 30 3D models involved are “3D works,”and the company has enjoyed the copyright of such works since the day of their completion.The copyright of such works shall not be affected whether the physical works are damaged, dismantled, or lost. Due to its distinct attribute, the product needs to be sold to the public asassembly components, which cannot be usedto deny the perceptible external expression of the 30 3D works that can be constructed. The 30 plans of constructed static models, such asfences and turntables, shown on the back of the home page and the first page of the instructionsare plans of 3D works.The 30 3D models involved in the case are fixable, original and protectable. The two Appelleeshave infringed the copyright of such models by producing the product involved and selling the copied product manual without permission. Therefore,the Appellant requested the court to amend the judgment and support all its claims in the first instance. The two Appellees argued that the product involvedis sold in components and not constructed into3D models.Even if there are physical 3D models, they are reproduced from 30 plans and should not be identified as independent works.Even if the 30 3D models constitute works, the users who build them based on the plans reproducethe components instead of the 30 3D models, so it does not constitute infringement. After hearing the case, the SIPC held that, first of all, the 30 abstract 3D models involvedare different from the mechanical and engineering structuresin real life, but they are not entirely reproduced from the real objects as they can show the mechanical principle and physical structure of a real object, which reflects the designer's innovative idea and arrangement.They are original and can be fixed through tangible forms, which makes them the model works under China's Copyright Law, and they shall be protected by the Copyright Law as they are separate from the graphic works.Second, the copyrightedproduct of the Appellant is sold in the form of components with detailed installation instructions. Whena buyer obtains the product with consideration, he or she also obtains the license to assemble and reproduce the 30 model works.Such license should, of course, be granted by the copyright owner, or granted with the copyright owner's permission. The two Appellees did not enjoy the right to reproduce the model works involved, yet they produced and sold the productinvolved in the same way and authorized buyers to reproduce the copyrighted works for commercial purposes, which infringed the right of the Appellee to reproduce the model works involved. Accordingly, the SIPC amended part of the first-instance judgment.(By Chen Yingying)
