According to a news report, Bruce Lee Enterprises, LLC (“Bruce Lee Company”) represented by his daughter recently sued the big restaurant chain Guangzhou Real Kung Fu Restaurant Co., Ltd. (“Real Kung Fu Company”) to the Shanghai No.2 Intermediate Court, claiming that the company should immediately stop using the image of Bruce Lee, pay damages of 210 million and declare that it had no relationship with Bruce Lee on a publication for consecutive 90 days.   

After reading and studying the case report, I found that by current intellectual property law in the preliminary stage of socialism Bruce Lee Company could hardly stop Real Kung Fu Company from using Bruce Lee’s image even if the court decides that Real Kung Fu uses Bruce Lee’s image in its brand. My analysis is as follows.     

It should be an unfair competition case.

The legal issues arising from the case are complicated. Even the plaintiff’s lawyer spent a lot of time finding the cause of action.

In a portrait action the portrait right is one of personal rights that dead people like Bruce Lee don’t have according to the current General Provisions of the Civil Law. Having no portrait right doesn’t mean there is no protection of portraits of dead people. A number of local courts in China found that portraits of dead people should be treated as other civil rights and benefits of their respective heirs. However, it would be inappropriate to bring an action for other civil rights and benefits by Bruce Lee Company, not his heirs.    

According to the news report, Bruce Lee Company demanded Real Kung Fu Company declare that it had no relationship with Bruce Lee on a publication for consecutive 90 days, the most possible cause of action in this case is confusing acts of unfair competition, which means that the action brought by Bruce Lee Company against Real Kung Fu Company would cause the public to misunderstand that there was some connection between them. 

The legal basis is the 4th item of Article 6 of the Unfair Competition Law that business owners shall not act in the following ways that could cause people to misunderstand that they sell products of or have certain relationship with other people: .....(iv) acting in a confusing way that could cause people to misunderstand that they sell products of or have certain relationship with other people.   

How would Real Kung Fu argue about the portrait issue?

The first disputed issue is whether the portrait on the Real Kung Fu Company’s brand was Bruce Lee’s image.  

The plaintiff Bruce Lee Company will certainly claim that it is the image of Bruce Lee, the world’s well-known kung fu star whose name is connected with kung fu and that the defendant intended to cause confusion by using his image and calling its business as Real Kung Fu, causing unfair competition. 

It is generally believed that the defendant would argue with proof that cartoon characters or other portraits used by Real Kung Fu Company were designed by itself and unrelated to Bruce Lee. 

Based on my experience the court could accept the plaintiff’s arguments about this issue because based on common knowledge of the public the portrait on the brand of Real Kung Fu is Bruce Lee. I always believe that Real Kung Fu uses the image of Bruce Lee as its brand. Another possibility is that Real Kung Fu had made full preparations for evidence, for example by registering the brand image as copyright in art works and finding and signing a portrait agreement with a person who looked like the portrait used, before beginning to use that image years ago.   

How would Real Kung Fu Company argue about the trademarks?

I searched the website of the state trademark office and found that Real Kung Fu registered trademarks for the image in dispute more than 10 years ago. Based on information on the website of the state trademark office, nobody has ever commenced the trademark invalidity process for these trademarks.

This will cause a difficult problem. According to current laws and legal policies, this means that if Real Kung Fu Company argues that what it uses are its registered trademarks, the court could only support the claim for payment of damages but would not order it stop using the trademarks even if the court finds that Real Kung Fu has used the image. 

Pursuant to Article 45 of the Trademark Law of China, no trademark application can damage others’ prior rights such as copyright, business name right and portrait right. However, prior right owners should file a trademark invalidity application with the state trademark review committee within 5 years from the trademark registration date. The problem is that Real Kung Fu has had the registered trademarks for the brand image for more than 10 years and cannot cancel them anyway.

According to Article 9 of the Opinions on Several Issues Concerning Intellectual Property Cases Decided by Taking into Consideration the Whole Picture of the Current Economic Situation published by the Supreme People’s Court of China in 2009, even if the court found that the brand image of Real Kung Fu caused unfair competition to Bruce Lee Company, the court can only order a payment of damages but cannot prohibit the use of the registered trademarks.   

The clause is summarized as follows.

......Trademarks that have existed as registered trademarks for a long time with high reputation on the market and relevant public cannot be canceled recklessly to protect prior rights and respect the fact that relevant public are able to distinguish the related trademarks from others on the market. We need to follow the principle of keeping a balance between protection of prior rights and maintenance of the market order under the trademark law and pay attention to maintaining the current stable market order to prevent parties involved from obtaining and competing for advantages indirectly or improperly and avoid reckless cancellation that could cause great difficulty in the running of businesses. If a registered trademark that conflicts with other person’s prior right relating to property such as copyright and business name right cannot be canceled after the end of the limited period of time for dispute resolution allowed by the trademark law, the prior right owner can bring a civil infringement action against the trademark owner within the statute of limitation, but no court will decide that the trademark owner will take the civil responsibility for stopping using the trademark.              

I don’t need to explain this further. By reading the above clauses you know that the main purpose of this provision by the Supreme People’s Court is to maintain the stable market order. On the one hand, we are a socialist country in the preliminary stage of its development. Intellectual property rights should be protected to the extent that is appropriate to our national conditions. On the other hand, this provision was promulgated in 2009 when a global economic crisis was going on and the Supreme People’s Court aimed to protect Chinese businesses and employees.         

Finally, more protection is given for intellectual property rights in China now than in 2009. In the above case, relevant policies and legal interpretations remain in effect, but if deciding that Real Kung Fu Company did acts of unfair competition, the court could award a large amount of damages. The plaintiff in this case claimed damages based on the amount awarded to Jackie Chan. I believe that this claim makes sense because it is possible that the court award damages of more than ten or even one hundred million.     

If Real Kung Fu Company continues using the image in dispute after the court decides that Real Kung Fu Company did acts of unfair competition, they will have problems. Bruce Lee Company can regularly bring a new action against Real Kung Fu Company because the previous action was brought for damages arising from previous unfair competition and new actions could be taken for new damages arising from unfair competition that goes on after the previous case was decided.