(Yicai Global) Aug. 31 -- Shanghai High People's Court pronounced a judgment in the first instance on Aug. 29 in the blockbuster case of intellectual property rights in China in which Shanghai Gaotong Semiconductor Company Ltd. accused Qualcomm Inc. [NASDAQ:QCOM] of infringing its trademark rights. The court rejected all the claims by Gaotong, including those for damages amounting to USD15 million (CNY100 million).

Shanghai Gaotong insisted that its use and registration of 'Gaotong' as a trademark and name occurred much earlier than that of the three defendants Qualcomm, Qualcomm China and Qualcomm's Shanghai-based subsidiary. Shanghai Gaotong accused the three defendants of using and registering enterprise names bearing 'Gaotong,' confusing the public and rendering it unable to distinguish between 'Gaotong US' and 'Gaotong China.'

The court found that services authorized by these two trademarks were communication services generally provided by telecommunication enterprises to the public. Chips designated for mobile phones are an electronic component of an integrated circuit for manufacturing communication products (e.g. mobile phones), and the consumers of such chips are mobile phone manufacturers. Obviously, there is no direct link between chips designed for mobile phones and communication services. Therefore, based on general knowledge, the public would not be confused by assuming the existence of a connection between the two.

As one reason for using 'Gaotong,' Qualcomm US explained that it was committed to high quality communication and therefore, formed its Chinese name based on 'Quality Communication' which it then combined as 'Qualcomm' as its English name and featured trademark. 'Gaotong' is the Chinese translation of this. The court found the above explanation by Qualcomm US reasonable. The use of 'Gaotong' by both parties had to have been coincidental. The use of 'Gaotong' by the Beijing representative office of Qualcomm US was thus bona fide,  and Shanghai Gaotong's allegations of bad faith use against the three defendants were factually groundless, the court held.

Shanghai Gaotong is a private enterprise with an over 20-year history. Founded in July 1992, Shanghai Gaotong Computer Co. was renamed with its current name Shanghai Gaotong Semiconductor Co. Ltd. At its the inception, the Chinese-character memory cards Shanghai Gaotong made earned it the sobriquet of 'one of the Big Five Chinese Character RAM memory card makers,' along with Lenovo Group Ltd. [HK:0992], Kingsoft Corp. [HK:3888], Zhuhai Giant Group and Guang Dong Sitong Group Co. [SHA:60383].