Weekly China Brand Protection News

December 27, 2024

1. Reversed in the Supreme Court Retrial! Jingmen Laobaixing Company infringed trademark rights of Changsha Laobaixing Pharmacy established half-year earlier, its prior use defense was not supported

The Supreme People’s Court made a retrial judgment on the trademark infringement and unfair competition dispute case between Laobaixing Pharmacy Chain Co., Ltd. (“Laobaixing”) and Jingmen Laobaixing Pharmacy Chain Co., Ltd. (“Jingmen Laobaixing”). The court revoked the first and second instance judgments and found that the actions of Jingmen Laobaixing constituted trademark infringement and unfair competition.

The court found that Paragraph 3 of Article 59 of the China Trademark Law states where an identical or similar trademark with certain fame has been used, prior to the use by the trademark registrant, concerning the same goods or similar goods by others before the trademark registrant applied for trademark registration, the exclusive right owner may not prohibit the user of the aforesaid trademark from continuous use of such trademark within the original scope but may request its user for addition of proper logos for distinction purpose. The Trademark Law provides a certain degree of protection for unregistered trademarks that have been used and grants prior use defense right to prior users against others who register the trademark. However, this defense cannot completely break the registration principle. In its application, it is necessary to balance the interests of the prior user and the right holder of the registered trademark. For the bona fide prior use of a trademark that is identical or similar to the registered trademark of others and has certain fame on the identical or similar goods, the prior user has the right to continue to use it within the original scope; if the prior use is earlier than the trademark filling date, but later than the use of the trademark, and there is evidence to show that the prior user knew or should have known, it is not proper to find for prior use.

In this case, the trademark filling date of Laobaixing was June 4, 2003. Jingmen Laobaixing was established on May 21, 2002, and began to use the “Laobaixing” mark earlier than the filling date of the disputed trademark. However, Laobaixing was established on October 25, 2001. After that, Laobaixing’s name was changed several times and is now called Laobaixing Pharmaceutical Group Company. The use of the “Laobaixing” name and mark by Laobaixing can be traced back to its establishment date, October 25, 2001, which is about half-year earlier than the establishment date of Jingmen Laobaixing when it began to use the “Laobaixing” mark. Before the establishment of Jingmen Laobaixing, the predecessor of Laobaixing had already used the “Laobaixing” name and mark and established certain fame by relevant media carried out publicity and reports. As an operator in the same industry, Jingmen Laobaixing should have known this but still used the “Laobaixing” mark on the same pharmaceutical services as Laobaixing. Based on this, Jingmen Laobaixing’s prior use defense cannot be established.

Jingmen Laobaixing used the “Laobaixing” mark in its branch store signs, business premises, and online official accounts, such as “Laobaixing Pharmacy + XX Store” and “Laobaixing Pharmacy.” The above use constitutes trademark use and is similar to the registered trademark of Laoaixing. Jingmen Laobaixing used the “Laobaixing” mark on the same service without permission, infringing Laobaixing’s trademark rights.

Regarding unfair competition, before the establishment of Jingmen Laobaixing on May 21, 2002, Changsha Laobaixing Pharmacy, the predecessor of Laobaixing, had already used the “Laobaixing” name and mark on October 25, 2001, and established certain fame by relevant media publicized and reported on it. As an operator in the same industry, Jingmen Laobaixing should have known this, but it still registered the “Laobaixing” business name and used it for the same pharmaceutical services as Laobaixing, which is likely to cause confusion and misunderstanding among the relevant public. The behavior of Jingmen Laobaixing constitutes unfair competition.

2. The interior design of a jewelry store is protected by copyright law

The Beijing IP Court made a second-instance judgment on the copyright infringement dispute between the appellant Sun, the appellant Beijing Shuidian Taohua Yishu Co., Ltd. (“Shuidian Taohua”) and the respondent Nanchang Gongjiang Jewelry Co., Ltd. (“Nanchang Gongjiang”), ordering Shuidian Taohua and Nanchang Gongjiang to stop the infringement and compensate Sun for economic losses of CNY 100,000 (USD 13,700).

The court found that the disputed works and shops are similar regarding red arched door design, white light strip inlay, reflective mirror setting, arched door corridor, black reflective effect of the floor, and the overall visual effects are similar, constituting substantial similarity. Shuidian Taohua claimed that some designs were common expressions or originated from prior, public designs, but it did not provide evidence to prove its claim. The disputed shops used designs that were substantially similar to the disputed works, they achieved the reproduction of the disputed works from two-dimensional to three-dimensional. Nanchang Gongjiang, as the operator of the disputed shops, and Shuidian Taohua, as the licensor providing franchise services to Nanchang Guongjiang, jointly infringed Sun’s reproduction right for the disputed works and should bear the tort liability of stopping infringement and compensating for losses. 

Shuidian Taohua is the brand owner of “Gongjiang Zaoban” and the brand headquarters. All other companies operating businesses related to the disputed business need to obtain the consent of Shuidian Taohua and the image of each store needs to be uniformly arranged by the headquarters. Shuidian Taohua and Nanchang Gongjiang claim that they are in a franchise relationship, Shuidian Taohua is the licensor, and Nanchang Gongjiang Company is the franchisee. Therefore, it can be determined that while Shuidian Taohua provided franchise services to Nanchang Gongjiang, it also made unified arrangements for the store image of Nanchang Gongjiang. Shuidian Taohua participated in the image design of the disputed store and jointly committed copyright infringement with Nanchang Gongjiang, and it should bear the infringement liability.

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