Weekly China Trademark News Updates

April 08, 2022

1. The Supreme People’s Court issued the Decision on Amending the Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of China

On March 22, 2022, the Judicial Committee of the Supreme People’s Court deliberated and approved the Decision on Amending the Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of China (the “Decision”), which will take effect from April 10, 2022. The Decision revised the judicial confirmation procedure, simplified procedure and petite claims procedure, sole-judge procedure, online litigation and service rules, etc. and added 7 articles, and the overall order of the articles was revised.

2. Tencent QQ’s red envelope “manual grab” function was infringed by an “automatic grab” software and was awarded judicial protection in the first and second instance

Tencent’s QQ instant messaging software started to provide users with a red envelope service in early 2015, including the function that users can click to receive electronic red envelopes sent by other users through one-to-one chat or group chat.

In the same year, Baihao Company was established and provides technology development and technical services such as “Duo Duo Grab Red Envelope” and “Red Envelope Hunter” software. Guxin Company, founded in 2014, is also the developer and main operator of the “Duo Duo Grab Red Envelope” software. Both software can be displayed on the front end or in the background of QQ when QQ message notification is turned on, to achieve the effect of automatically grabbing red envelopes. At the same time, the software also provides a “red envelope grabbing tutorial.”

The first instance court held that the acts of Baihao and Guxin hindered the normal operation of QQ products, made profits by providing services that harmed the interests of Tencent, its consumers, and the public, which disrupted the market competition order and amounted to unfair competition. Therefore, Baihao and Guxin were ordered to stop their infringement and publish apologizes on the newspaper to eliminate negative impact. Baihao should compensate Tencent for economic losses (including reasonable expenses) of RMB700,000 (USD110,000), of which Guxin was liable for RMB110,000 (USD15,700). The Hangzhou Intermediate People’s Court, the second instance court, comprehensively considered the nature of the infringement and the subjective intention of Baihao’s infringement, the market value of QQ, the damage to the market competition order, the cumulative download volume, and operation duration of the infringing software, and the automatic grabbing of QQ red envelope by users using the infringing software, and the reasonable expenses for rights protection. The second instance court rejected the appeal and upheld the original judgment.

3. The “Baisuishan” trademark infringement and unfair competition case

The Jiangsu Higher People’s Court issued a decision for a lawsuit between Jingtian (Shenzhen) Food & Beverage Group Co., Ltd. (“Jingtian”) against Jiangsu Baisuishan Water Purification Equipment Co., Ltd. (“Baisuishan”) and Jiangsu Kangwei Nano Technology Co., Ltd. (“Kangwei Nano”) in a trademark infringement and unfair competition case, and upheld the first-instance judgment.

Jingtian was the assignee of the “Baisuishan” mark. The alleged infringing products in this case were water purifiers, nanofiltration membrane direct drinking machines, three-in-one water purifiers, and negative ion nano air purifiers. Baisuishan and Kangwei Nano were affiliated companies, and Kangwei Nano obtained the trademark logo involved in the case through assignment or registration and used it on the alleged infringing goods it produced. Baisuishan provided packaging and promotion of products and sold the accused infringing goods mainly through online platforms, promotional materials, and other methods.

The court held that the evidence was sufficient to prove that Jingtian’s registered trademark “Baisuishan” constituted as a well-known mark used in mineral water, water (beverage) and other goods. The use of the “Baisuishan” logo on negative ion nano-air purifier products and advertising, etc., dissented the inherent association between the “Baisuishan” mark and Jingtian’s mineral water and water (drinks) goods, thereby weakening the well-known mark’s distinctiveness, and unfairly used the market reputation of the “Baisuishan” mark. Therefore, the alleged infringements violated the trademark right of “Baisuishan.”

Baisuishan used Jingtian’s well-known mark as its enterprise name and used it in its business activities, which would objectively cause confusion among the relevant public, and mistakenly believe that the two companies had specific connections such as licensed use and affiliated companies, which amounted to unfair competition.

Kangwei Nano should know that there were legal obstacles to its use of the “Baisuishan” mark, which had been opposed, but it did not reasonably avoid such use and even allow a third party to continue such use. Kangwei Nano even allowed such use to continue even after the assigned mark was invalidated. Baisuishan knew that the “Baishuishan” mark was a restricted enterprise name, which might cause name disputes, but deliberately used “Baishuishan” as the main identification element in its enterprise name. In its course of business, Baisushan used the logo to promote and sell products, and intentionally mislead the public. Baisuishan and Kangwei Nano cooperated, divide labor and used various means to infringe in a rather large scale of operation. The court ordered a RMB3 million (USD471, 500) compensation after fully considered all punitive factors.

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China