Weekly China Trademark News Updates

March 22, 2022

1. The Supreme People’s Court released judicial interpretation of the Anti-Unfair Competition Law, effective March 20

Recently, the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Anti-Unfair Competition Law of China” (hereinafter referred to as the “Interpretation”) was released, which will come into force on March 20, 2022. The Interpretation has a total of 29 articles, which focus on general provisions, counterfeiting and confusion, false publicity, and online unfair competition. Some selected excerpts are as follows.

Article 1: a business operator disrupts the market competition order, damages the legitimate rights and interests of other operators or consumers, but did not violate Chapter II of the Anti-Unfair Competition Law and the provisions of the Patent Law, Trademark Law, and Copyright Law, the people’s court may apply Article 2 of the Anti-Unfair Competition Law, the general clause. This provision not only clarifies the applicable relationship between general clause, specific conduct clause, and provisions of intellectual property laws, but also clarifies the application of the general clause to other intellectual property laws such as the Anti-Unfair Competition Law and the Trademark Law.

Article 4: a sign with a certain market reputation and a distinctive feature that distinguishes the source of a good may be identified by the people’s court as a sign with “certain influence” as stipulated in Article 6 of the Anti-Unfair Competition Law. When the people’s court determines whether a logo stipulated in Article 6 of the Anti-Unfair Competition Law has a certain market reputation, the court should comprehensively consider the degree of knowledge of the relevant public in China, the time, geographical area, number of sales, and target of the sale of goods, and the duration, degree and extent of publicity, geographical scope, and protection records, etc. This article clarifies the meaning of the “certain influential” sign and the factors to be considered for determination.

Article 7: if an interest party petition for protection under Article 6 of the Anti-Unfair Competition Law a sign as stipulated in Article 6 of the Anti-Unfair Competition Law or its distinctive identification part is stipulated in the first paragraph of Article 10 of the Trademark Law as a sign that shall not be a trademark, the people’s court shall not support that petition. This provision clarifies that marks that fall within the scope of unregistrable trademark cannot be protected by the Anti-unfair Competition Law.

Article 9: the name of an enterprise registered with the market entity registration management department according to the law, and the name of an overseas enterprise used for commercial use within the territory of China may be determined by the people’s court as the “company name” stipulated in Article 6 of the Anti-Unfair Competition Law. This provision referred to Article 2 of the “Regulations on the Administration of Registration of Market Entities” to refine the scope of market entities whose names can be protected.

2. The owner of a trademark labeled to the alleged infringing product can be deemed as a proper defendant

The Supreme People’s Court made a final ruling on a computer software copyright infringement case between the appellant Plymouth Company (“Plymouth”) and the appellee Lenovo (Beijing) Co., Ltd. (“Lenovo”): the first-instance ruling was revoked, and the Beijing Intellectual Property Court was ordered to continue the trial.

The issue of the second-instance court was: whether Lenovo was a qualified defendant in the case. The Supreme People’s Court held that a plaintiff must have an ascertained defendant when filing a civil lawsuit. The legal requirement for “ascertained” was that the people’s court can specify the defendant according to the plaintiff’s lawsuit, which includes two meanings. First, the defendant’s entity must be clear. If it is a natural person, its identity information such as name, gender, age, and domicile must be determined; if it is a legal person or an unincorporated organization, its main information such as name and domicile must be clarified. Second, the defendant should be able to bear civil liability, that is, the plaintiff should submit prima facie evidence to prove that the defendant is able to bear civil liability for the specific claim made. Otherwise, the purpose of the lawsuit will be defeated, and the lawsuit will not be able to proceed. Whether the plaintiff’s claim can be supported by the people’s court and whether the defendant bears civil liability is not a necessary condition for the people’s court to accept a civil case. In short, when examining whether a defendant is “qualified” in a lawsuit, people’s courts only need to examine whether the plaintiff has provided prima facie evidence that the defendant is associated with the disputed legal issues, and this issue should not be judged by the substantive trial procedure, or whether the defendant is ultimately the subject of an obligation or subject of a liability in the disputed legal issue.

In this case, Plymouth sued Lenovo claiming that Lenovo had installed the “TaptheFrog” game copyrighted by Plymouth on its mobile phone without authorization, and demanded that Lenovo be ordered to stop the infringement and compensate for its losses. In order to prove its claim, Plymouth submitted an allegedly infringing mobile phone, which had the “Lenovo” trademark on the outer packaging and on the mobile phone, and Lenovo recognized that it was the exclusive owner of the registered trademark of the “Lenovo” trademark. When Plymouth filed this lawsuit, it provided the name and domicile of Lenovo, and confirmed the identity of Lenovo to prove that Lenovo may have carried out the alleged infringement. If the alleged infringing product was affixed with a trademark, it can be determined that the owner of that trademark was the manufacturer of the alleged infringing product, and in relevant infringement lawsuits, that manufacturer constituted as a defendant who was actually associated to the dispute. Therefore, it should be determined that Lenovo was qualified as the defendant in this case, and the petition of Plymouth complies with Article 119 of the Civil Procedure Law, and the first instance court should continue to hear this case. The first instance court erred in rejecting Plymouth’s appeal.

3. An OEM company was found to be infringing another’s trademark

The Guangdong Jiangmen Intermediate Court recently made a final judgment on a trademark infringement dispute between the appellant Guangdong Jinlaite Intelligent Technology Co., Ltd. (“Jinlaite”) and appellee Zhongshan Kada Optoelectronics Lighting Co., Ltd. (“Kada”). Jinlaite’s appeal was rejected and the lower court’s judgment was affirmed.

The first issue was whether Jinlaite’s OEM constitutes as trademark infringement. First, there was no evidence to prove that there was any illegitimacy with the trademark owner Wang Rongjin’s filing of the application and registration of the trademark “” involved in the case with reg. no. 33186539 (“Disputed Mark”). Kada used the Disputed Mark with Wang Rongjin’s authorization, and had the exclusive right to file a lawsuit in its own name, so Kada’s exclusive right to use the Disputed Mark should be protected by law. Second, the use of trademark is an objective behavior, including physical attachment, market circulation and other links. In this case, Jinlaite used the Disputed Mark on its products and product packaging to identify the source of the goods, and the use status was a trademark use. Jinlaite rebutted that they were an OEM. The accused infringing products were not sold in China and would not confuse consumers with the Disputed Mark. It does not constitute as trademark use. The court found Jinlaite’s evidence was insufficient and cannot be supported. Third, Jinlaite used the Disputed Mark on the same goods (hand lamp, charging lamp, flashlight), which infringed Kada’s exclusive right to use its trademark. Finally, due to the territorial nature of trademark rights, for trademarks that have not been registered or licensed in China, even if those trademarks were registered abroad, they did not have rights in China. Jinlaite’s reliance on its principal’s trademark right in Turkey to export its OEM products cannot be supported by the law. Jinlaite infringed upon Kada’s trademark right. Accordingly, the first instance’s judgment was affirmed.

The second issue was how to determine the amount of damages. Based on the facts of this case and another case, the first instance court comprehensively considered the popularity and influence of the Disputed Mark, the nature, consequences, sales scope of the infringement, and the amount paid by Kada to stop the infringement, along with reasonable expenses and other factors. According to the law, Jinlaite should compensate Kada for economic losses of RMB 100,000 (USD15,736) (including reasonable expenses), which was affirmed.

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