Weekly China Brand Protection News

February 27, 2025

1. Anhui High Court Upholds Decision on Retrial, Determining that a Sports Company’s Store Decoration is Highly Similar to DECATHLON and Constitutes Unfair Competition

Decathlon and Decathlon (Shanghai) Sporting Goods Co., Ltd. (“Decathlon”) noticed that a sports company had opened over a hundred stores across China under the name “OUTCOOL,” with some store signs displaying “Sports Outdoor Supermarket” beneath the said logo. These stores also featured facade advertisements, PLV posters, bench-style shoe-fitting mirrors, yellow price tags, and product descriptions similar to Decathlon’s. Decathlon believed that OUTCOOL stores’ overall decoration style and various decorative elements were extremely similar to Decathlon stores, and that OUTCOOL engaged in false advertising and other unfair competition actions, thus filing a lawsuit.

An Intermediate Court of Anhui Province initially ruled that the store signs of Decathlon and OUTCOOL were clearly different in terms of color usage, Chinese and English fonts, and content. While some other decorative elements in OUTCOOL stores were similar to those used by Decathlon, the overall visual impact or intuitive feeling would not cause confusion among the relevant public. The court determined that OUTCOOL’s use of decorations did not fall within the scope of unfair competition regulation. However, OUTCOOL repeatedly used “Decathlon” for promotion on its company webpage and other online media, with the intention of associating with or disparaging “Decathlon,” which constituted false advertising. Regarding the specific amount of economic loss, since neither party submitted evidence to prove Decathlon’s actual loss or OUTCOOL’s illegal gains, the court comprehensively considered the reputation of the “Decathlon” logo, OUTCOOL’s business scale, the influence of relevant promotions, degree of fault, and necessary rights protection expenses, and determined that OUTCOOL should compensate Decathlon CNY 300,000 (apprx. USD 41,000).

Decathlon appealed. The second-instance court determined that the store decoration Decathlon sought to protect had distinctive characteristics that distinguished the source of goods and had already established the “certain influence” required by the Anti-Unfair Competition Law. OUTCOOL’s stores had many similarities with the store decoration that Decathlon sought to protect, and the differences between the two would not be easily noticed by the relevant public with general attention, so the two decorations should be deemed similar. Moreover, OUTCOOL published multiple articles on its official website, claiming that OUTCOOL is the “Decathlon” in the sports outdoor brand franchise field, stating “Join OUTCOOL, be China’s Decathlon,” “OUTCOOL Outdoor Sports Supermarket, China’s Decathlon,” and so on. Therefore, even with differences in price, quality, consumer level, store signs, and trademarks, the relevant public would still easily mistaken that there was some economic connection between the two. OUTCOOL unfairly competes by unauthorized use of another party’s influential packaging and decoration and false advertising, and was ordered to compensate Decathlon for economic losses and reasonable expenses paid to stop the infringement, totaling CNY 2 million (apprx. USD 275,000).

OUTCOOL disagreed and applied for a retrial. The Anhui High People’s Court determined in the retrial:

Regarding whether Decathlon’s store decoration is protected as an influential decoration under the Anti-Unfair Competition Law: Decathlon’s decorative elements have formed a unique style and characteristics, applicable to different stores nationwide. Considering the time Decathlon entered the Chinese market, its brand’s operational scale and promotional time in China, as well as evidence showing that the relevant public has associated the overall image of its packaging and decoration with Decathlon stores operated by Decathlon, it can be determined that Decathlon’s store decoration falls under the “decoration with a certain influence” as stipulated in the Anti-Unfair Competition Law.

Regarding whether OUTCOOL’s store decoration is similar to Decathlon’s store decoration: In this case, the decoration used by OUTCOOL in the stores in question is quite similar to Decathlon’s store decoration in overall style, and there are many similarities in the selection and layout of design elements. OUTCOOL claimed that its stores differ from Decathlon stores in elements such as storefronts and staff uniforms, but these differences are not part of the store decoration that Decathlon seek to protect, nor do they affect consumers’ judgment of the overall store style.

Regarding whether the decoration used by OUTCOOL’s stores is likely to cause consumer confusion: Decathlon’s store decoration has distinctive characteristics that distinguish the source of goods. The decoration used by OUTCOOL in its stores is visually very similar to Decathlon’s store decoration. Combined with OUTCOOL’s multiple promotional claims that OUTCOOL is the “Decathlon” in the sports outdoor brand franchise field, its use of store decoration similar to Decathlon’s is likely to cause confusion among the relevant public, mistakenly believing that there is a licensing relationship, affiliated enterprise relationship, or other connection between the two. The differences in business districts, store area, and trademark logos claimed by OUTCOOL are insufficient to prevent consumers from mistakenly believing that there is a licensing relationship, affiliated enterprise relationship, or other connection between the two, and the evidence provided is insufficient to achieve the purpose of proof.

Regarding whether the compensation amount in the original judgment is reasonable: In this case, Decathlon did not provide evidence to prove its losses due to the alleged infringement or the profits gained by OUTCOOL from the infringement. The second-instance court comprehensively considered Decathlon’s scale, brand and enterprise reputation, operations and promotional activities in mainland China, OUTCOOL’s business scale, duration of the alleged infringement, subjective state of infringement, and other factors, and determined that OUTCOOL should compensate Decathlon for economic losses and reasonable expenses paid to stop the infringement, totaling CNY 2 million, which is not inappropriate.

2. DeepSeek Trademark Applications Maliciously Filed by Others Rejected by the CNIPA

The CNIPA announced that recently, the DeepSeek artificial intelligence large model developed by Hangzhou DeepSeek AI Foundation Technology Research Co., Ltd. has attracted widespread attention globally. Some enterprises and individuals have submitted trademark applications for “DEEPSEEK” or its graphic logo , and some trademark agencies are suspected of providing illegal services, with obvious intentions of “riding on popularity” and seeking improper benefits.

The CNIPA has rejected 63 applications, including the “DEEPSEEK” trademark application with app. no. 82848449.

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