With over 200 dedicated professionals, Beijing East IP has helped a full spectrum of clients – from startups to Fortune 500 corporations to domestic multinational companies – on their intellectual property issues in China.
January – March 2021
Starting January 2021, Beijing East IP will be collecting and presenting notable China trademark and anti-unfair competition news and updates every quarter. Our quarterly newsletter will be a selection of notable news from our weekly updates, including cases, laws, regulations, and our on-going trademark articles regarding suggested trademark practices in China.
1. Notable trademark and anti-unfair competition cases
a. Burberry obtained its first preliminary injunction order against Baneberry
Burberry Limited (“Burberry”) registered the following marks on clothing and related goods. Among them, Cited Mark 1 and Cited Mark 2 have been recognized as well-known marks multiple times.
|Cited Mark 1||Cited Mark 2||Cited Mark 3||Cited Mark 4|
Xinboli Trading (Shanghai) Co., Ltd. (“Xinboli”) is the licensee of the following marks.
|Licensed Mark 1||Licensed Mark 2|
Xinboli have been using the Licensed Mark 1 and Licensed Mark 2 (“Licensed Marks”) and similar marks to Burberry’s Cited Mark 3 and Cited Mark 4 on goods that Burberry carried, including clothing styles, designs, hangtags, purses, and bags, as well as the respective goods’ shape. What is more, Xinboli used the royal arms of the United Kingdom (“Royal Arms”) to falsely promote its brand history and sources. Xinboli even opened its own brick and mortar shops or clearance shops in 2019. Xinboli quickly expanded its sales and extended its coverage. At the time Burberry filed for the preliminary injunction at the end of 2020, Xinboli had opened 40 brick and mortar stores in large shopping malls and outlets in first and second tier cities, almost outmatched Burberry’s brick and mortar stores in mainland China. Xinboli also opened its online stores on TMall.com, WeChat, Pingduoduo, and Little Red Book. Xinboli’s actions caused confusion among the relevant public. Burberry sued Xinboli for trademark infringement and unfair competition. After docketing its case, Burberry filed a petition for preliminary injunction against Xinboli.
On January 29, 2021, the Suzhou Intermediate Court held the preliminary injunction hearing. The court ordered Xinboli to immediately stop using the Licensed Marks and immediately stop manufacturing and sell products bearing similar marks to Burberry’s Cited Mark 3 and Cited Mark 4; and immediately stop using the Royal Arms logo on the hangtag of all its products and stop all false promotions.
b. “Louis Vuitton” was recognized as a well-known mark to counter an infringer who abused administrative proceedings to extend its time to attain unjustifiable profits
Louis Vuitton Malletier (“LV”) sued Guangzhou Ruiwang Leather Co., Ltd. (“Ruiwang”) and Rui Wang (together as the “Defendants”) for trademark infringement.
|Cited Mark||Disputed Mark|
LV filed invalidation request with the CNIPA against the Disputed Mark and the CNIPA invalidated the Disputed Mark during the trial of this trademark infringement case. Ruiwang was unsatisfied with the invalidation decision and appealed to the Beijing IP Court. Considering the Disputed Mark was still valid during the trial, the Defendants argued that this case shall not be docketed because this was not a trademark infringement case but an administrative dispute over trademark registrations.
The court applied Article 11 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes Involving Well-Known Mark Protection (“Interpretation”) in its findings and found that Ruiwang violated the well-known mark provisions stated in Article 13 of the Chinese Trademark Law and LV’s well-known trademark was copied and imitated. Ruiwang’s act constituted an infringement of LV’s trademark right. That is, the court recognized the Cited Mark as a well-known to grant additional protections to LV against Ruiwang’s infringing use of the Disputed Mark.
In this case, LV submitted sufficient evidence to prove that before the Disputed Mark’s application date, LV’s Cited Mark had achieved well-known status. The Disputed Mark’s use on handbags and purses were identical in nature to the Cited Mark’s approved goods of bags, backpack, handbags, fur, artificial leather, suitcase, etc. The Disputed Mark were also identical to the LV’s Cited Mark in terms of font style. Both marks’ design and overall appearance were also highly similar. The Disputed Mark constituted as a copy of the Cited Mark. Moreover, LV’s Cited Mark had been used in China for years and had achieved well-known status. Under such circumstances, the Disputed Mark’s use was likely to cause the relevant public to be confused as to the source of goods and associate the Disputed Mark with LV’s well-known mark, dilute LV’s market reputation and damage LV’s interests. The second instance court ruled in favor of LV and ordered a damage of RMB 500,000 (USD 76,800).
c. Fendi won against unauthorized use in an outlet shopping center
On March 4, 2021, the Shanghai High Court held that Shanghai Yilang International Trade Co., Ltd. (“Yilang”) and Capital Outlets (Kunshan) Commercial Development Co., Ltd. (“Capital”) infringed upon Fendi S.R.L.’s (“Fendi”) trademark right and amounted to unfair competition. Yilang and Capital were ordered to pay FENDI RMB 350,000 (USD 54,000) for economic loss and reasonable legal cost.
The court found that Yilang’s independent use of the mark “FENDI” on its signboard was intended to demonstrate itself as the business operator and management of the mark “FENDI,” which fell into the scope of protection of Fendi’s exclusive trademark right in Class 35 in connection with business operation and business management related services. Yilang’s conduct constituted as trademark infringement. Meanwhile, “Fendi,” as a trade name, had obtained certain fame on the market and was known by the public. Yilang’s independent use of the mark “FENDI” on its signboard without authorization constituted as using Fendi’s business name without authorization and amounted to unfair competition. As Yilang’s operation management, Capital shall be held jointly liable for aiding Yilang’s said trademark infringement and unfair competition for using the mark “FENDI” without authorization.
d. Michael Jordan finally got his name back! Qiao Dan Sports renamed to Zhong Qiao Sports
On December 30, 2020, eight years after Michael Jordan, the American professional basketball player, filed a name dispute against Qiao Dan Sports Co., Inc. (“Qiao Dan Sports”) and Shanghai Bai Ren Trade Co., Ltd. The Shanghai Second Intermediate Court ordered Qiao Dan Sports to publish clarifying statements regarding its relationship with Michael Jordan and issue a public apology. Specifically, the court ordered Qiao Dan Sports to stop using the “Qiao Dan in Chinese (“乔丹”)” part of its corporate name and its “Qiao Dan in Chinese (“乔丹”)” trademarks within 30 days of the effective date of this judgement. On January 12, 2021, Qiao Dan Sports was renamed to Zhong Qiao Sports Co., Ltd.
The court found Qiao Dan Sports knew of Michael Jordan’s fame but still registered or licensed the “Qiao Dan in Chinese (“乔丹”)” trademark, the “Qiao Dan in Chinese (“乔丹”) and Design (a baseball mannequin)” trademark, and the “Qiao Dan in Chinese (“乔丹”) and 23” trademark. And without authorization from Michael Jordan, Qiao Dan Sports used the “Qiao Dan in Chinese (“乔丹”)” mark that was identical with the Chinese translation of Michael Jordan’s last name in sporting goods industry as the distinctive part of its trade name. Further, Qiao Dan Sports promoted the “Qiao Dan in Chinese (“乔丹”)” brand through various media. These business activities were sufficient to confuse the public to associate Qiao Dan Sports with Michael Jordan. Qiao Dan Sports stepped on Michael Jordan’s influence in the sporting goods industry when entering the market to obtain more market opportunities and monetary interests. Accordingly, Qiao Dan Sports’ use of the “Qiao Dan in Chinese (“乔丹”)” mark shall be deemed as infringing upon Michael Jordan’s name right.
e. Paris Baguette in Chinese (巴黎贝甜) recognized as an unregistered well-known mark
Ai Si Bi Xi Investment Co., Ltd. (ASBX), the operator of the famous bakery “Paris Baguette” or “Paris Baguette in Chinese (巴黎贝甜)” sued Beijing Bali Beitian Enterprise Management Co., Ltd. (“Beijing Beitian”) in the Beijing Intellectual Property Court for infringing its unregistered well-known mark right by registering numerous “Ba Li Bei Tian in Chinese (芭黎贝甜)” marks and promoting the marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜)” on Beijing Beitian’s website.
|Cited Mark||Disputed Mark|
The court found that ASBX’s evidence supported its petition to recognize the marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜)” reached well-known status among relevant consumers as unregistered well-known marks. Beijing Beitian used “Paris Baguette in Chinese (巴黎贝甜)” prominently on its WeChat public account and website caused relevant public associated “Paris Baguette in Chinese (巴黎贝甜)” with Beijing Beitian. Such use was sufficient to mistake the source of services and infringed upon ASBX’s interests on the unregistered well-known marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜).” Meanwhile, ASBX’s unregistered marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜)” had relative high fame when Beijing Beitian was established. Under such circumstance, Beijing Beitian’s registration and use of the mark “Ba Li Bei Tian in Chinese (芭黎贝甜),” that was highly similar to the unregistered mark “Ba Li Bei Tian in Chinese (巴黎贝甜),” as its trade name was likely to cause confusion among the relevant public and violated the Chinese Anti-unfair Competition Law. The court ordered Beijing Beitian to immediately stop any infringing activities and pay damages and reasonable legal costs of RMB 1.5 million (USD 231,600).
f. Amazon was hammered with RMB 76.4 million (USD 11.8 million) in damages
Beijing Yanhuang Yingdong Technology Development Co., Ltd. (“Yanhuang”) sued Amazon.com, Inc.’s Chinese subsidiary, Amazon Connect Technology Services (Beijing) Co., Ltd. and a Chinese data center and cloud technology provider, Beijing Sinnet Technology Co., Ltd. (“Sinnet”) (together as the “Defendants”) before the Beijing High Court for infringing its registered trademark “AWS.” The court held that the Defendants were jointly liable for trademark infringement. The Defendants shall immediately stop using the “AWS” mark, pay Yanhunag RMB 76.4 million (USD 11.8 million) for economic loss, reasonable legal costs of RMB 260,000 (USD 40,000), and publish a public statement to eliminate any impact caused by its infringements.
|Parts of Disputed Marks||Cited Marks|
g. Ferrero received RMB700,000 (USD108,000) in damages for Kinder Surprise Egg packaging decorations infringement
Soremartec SA, Ferrero SpA., and Ferrero Trading (Shanghai) Co., Ltd. (“Ferrero”) sued Chaozhou City Chaoya Distrct Yaliwen Food Factory (“Yaliwen”) for trademark infringement and anti-unfair competition claiming RMB 1 million (USD 154,750) in damages.
|Kinder Surprise Egg||Infringing goods|
The second instance court held that Yaliwen’s infringing products were similar to Ferrero’s registered trademarks and were used on identical goods, which were likely to cause confusion to the relevant public and infringed upon Ferrero’s trademark rights. The overall appearance of the infringing products was similar to Kinder Surprise Egg’ packaging and decoration, which was likely to cause confusion to the relevant public on the source of goods and amounted to unfair competition.
h. The “Supreme” mark squatter was fined for RMB 8.5 million (USD 1.3 million)
Chapter 4 Corp. (“Chapter 4”), owner of the famous “Supreme” skateboard and streetwear brand, filed an unfair competition lawsuit against Shanghai Jiao She International Trade Co., Ltd. and its retailing partner Zhejiang Outlet Plaza Co., Ltd. (“Defendants”). The Zhejiang Intermediate Court found that Chapter 4’s “Supreme” brand had collaborated with Louis Vuitton, Nike, and Lacoste in China. With other facts found by the CNIPA, the court held that the “Supreme” mark has obtained certain influence and shall be protected under the Anti-unfair Competition Law. Defendants were ordered to immediately stop infringing activities, publish clarifying statements, eliminate negative impacts on the “Supreme” mark, and pay RMB 8.5 million (USD 1.3 million) to Chapter 4 for economic loss and reasonable costs.
On December 25, 2020, the Zhejiang Intermediate Court held that Guangzhou Hui Shi Co., Ltd., Zeying CHEN, and Xiaoshen GUANG (together as the “Guangzhou Hui Shi”) jointly infringed upon Wyeth LLC.’s “Hu Shi in Chinese (惠氏)” and “Wyeth” trademark rights. Considering Guangzhou Hui Shi’s obvious subjective bad faith, the court ordered treble punitive damages according to the China Trademark Law along with reasonable costs for RMB 30.55 million (USD 4.7 million).
2. Notable trademark laws, regulations, and news updates
a. The CNIPA published 2020 Annual Trademark Statistics
In 2020, 5.76 million marks were registered from applicants worldwide. Although 2020 was hit by the pandemic, domestic applicants managed to file 7,553 trademark applications under the Madrid Protocol before the CNIPA.With a striking 64.7% year-on-year growth, the CNIPA closed 149,000 trademark oppositions. Among them, 55,079 cases were allowed for registration, 38,988 cases were refused for registration, and 9,176 cases were partially allowed for registration.
358,000 other trademark adjudication cases (including rejection appeals, registration refusal appeals, invalidation actions, non-use cancellation appeals, etc.) were closed, achieving a 7.8% year-on-year growth. Among them, the success rate for refusal appeal was 33.2%, the success rate for invalidation was 70.4%.
The average trademark examination time had been shortened to 4 months.
b. The Supreme People’s Court issued judicial interpretations regarding intellectual property punitive damages and typical cases for guidance
On March 3, 2021, the Supreme People’s Court (“SPC”) issued the Interpretation of The Supreme People’s Court on the Application of Punitive Damages in Adjudicating Infringement of Civil Intellectual Property Infringement Cases (“Interpretation”). The Interpretation stipulated the scope of the application of punitive damages, defined the terms “intentional infringement” and “serious circumstances,” and provided methods for calculating base and reasonable multiples of punitive damages. The Interpretation is aimed at guiding lower courts on application of punitive damages aimed at punishing serious intellectual property infringement conducts.
To better guide the lower courts in applying the Interpretation, the SPC released the Typical Cases of Punitive Damages in Intellectual Property Infringement to ensure proper implementation of the Interpretation.
On March 15, 2021, the CNIPA issued the Special Action Plan for Cracking Down on Malicious Preemptive Trademark Registration (“Action Plan”) , and it specifically aims to crack down on trademark squatting, seeking unjustified interests, disrupting trademark registration management order, and actions causing significant adverse social impact. Some of the noticeable focal points in the Action Plan for foreign trademark owners are to crack down on “squatting relatively famous public figure’s name, famous works or character name” and “squatting relatively famous or inherently distinctive trademark or other commercial marks, damage other’s prior rights.”
3. Suggested Trademark Practices Series – Well-Known Mark Recognitions in China
Securing well-known mark (WKM) recognitions in China can help brand owners to block bad faith trademark filings from registration and invalidate or cancel trademarks registered in bad faith. Securing WKM recognitions in China can also help in trademark infringements and unfair competitions lawsuits because WKM recognitions can be used as legal basis for granting protection on dissimilar goods. In this series, we will share our insights on how to secure WKM recognitions in China. In Part I, we shared WKM recognitions benefits, principles, and evidence collection. In Part II and III, we shared cases with insightful analysis on how the courts apply well-known mark recognitions to various facts.
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