Weekly China Trademark News Updates

August 16, 2023

1. Tesla sued an infringer for using “Tesla Used Car in Chinese” and was awarded RMB 300,000 in compensation

Tesla Motors. INC. (later changed to “Tesla, Inc.”) is the owner of the “ ” mark with reg. nos. 12492119 and 13690440, the “Tesla in Chinese” mark with reg. nos. 13690434 and 13690432, the “” mark with reg. nos.  12492124 and 13698035, the “TESLA” mark with reg. nos. 13690428 and 7792673, and the “” mark with IR. No. 1199687.  Tesla, Inc.  is the copyright owner of the “TESLA T Design (TESLA T)” artwork that was completed on June 23, 2005. On September 14, 2021, Tesla, Inc.  issued a “General Power of Attorney” that authorized Tesla (Shanghai) Co. Ltd. (“Tesla”) to use or authorize a third party to use all Tesla’s registered or future intellectual property rights in China mainland, including but not limited to exclusive trademark right, copyright, etc. Tesla was also authorized to take administrative, civil, and criminal actions on behalf of Tesla, Inc.  Tesla sued Tesla Used Car (Guangzhou) Co., Ltd. Changsha Branch for trademark infringement, copyright infringement, and unfair competition.

After trial, the court stated that the underlying action for trademark infringement is that the use of the allegedly infringed trademark shall be trademark use as defined in the Trademark Law. The defendant argued its use was an objective description of its services that did not constitute as trademark use. The defendant used three logos on its signboard, “,” “,” and “,” all of which were identical or similar to the plaintiff’s registered trademarks. The defendant was not only using the same or similar logos on the signboard, but also used the same logos extensively on the background wall and promotional posters inside the store. In addition, the court’s findings shown that Tesla (Guangzhou) Used Car Sales Co., Ltd., an affiliate of the defendant’s parent company, registered a large number of marks identical or similar to Tesla’s registered trademarks between 2020 and 2022. Such action displayed the defendant’s parent company, Tesla Used Car (Guangzhou) Co., Ltd., did not have good faith in its subjective use of Tesla’s trademarks and goodwill. As a branch company, the defendant was an operator in the automobile sales industry, and its awareness of the Tesla brand was significantly higher than other ordinary companies. It was obviously inappropriate and unreasonable for the defendant to use a large number of logos that were identical or similar to the plaintiff’s registered trademarks inside and outside of the store and in promotional materials. In sum, the logos used by the defendant on the signboard of the store, the backdrop posters, and the indoor background wall constituted the function of identifying the source of the service and were not simply descriptive use, but constitute trademark use.

Regarding whether the defendant infringed the plaintiff’s trademark right, first, regarding the similarity of goods and services, Tesla’s registered trademarks include Class 12 for “electric vehicles, electric vehicles, etc.” and Class 37 for “vehicle maintenance and repair, vehicle service station (refueling and maintenance), vehicle (vehicle) failure rescue, etc.” As a used car seller, the defendant provided used car sales and related services at its premises. Although there were some differences between the classes for services approved under Tesla’s registered trademarks, through promotion and use of its trademarks, Tesla’s trademarks has a high degree of distinctiveness, and while being used in automobiles and other vehicles, it has obtained higher popularity in cars and its related field. The scope of Tesla trademark protection should be commensurate with its popularity, and it should obtain a wider scope of protection. Based on this, compared with the services provided by the defendant and the goods and service classes approved under Tesla’s trademarks, the two were identical in terms of service content, consumers, sales methods, channels, etc. They were basically identical in terms of aspects, and there was a specific association, which was likely to cause confusion among the relevant public and can be deemed as similar goods and services. Second, regarding whether the logos are identical or similar, after isolation and comparison, the alleged infringing logo “” was consistent in shape with the plaintiff’s registered trademark “,” which constituted identical trademark under the Trademark Law. The “Tesla in Chinese” logo in the accused infringing logo “” was consistent with the “Tesla in Chinese” trademark, which constituted identical trademark. Compared with the plaintiff’s “TESLA” and “” trademarks, the “TESILA” in the accused infringing mark “” has one more letter “I” than Tesla’s registered trademarks, but this did not contribute a substantial difference. There was basically no visual difference. The relevant public cannot distinguish the two when paying general attention, which will easily cause confusion and misidentification by the relevant public. These marks constituted similar marks. Third, regarding whether the defendant’s use of the logo was fair use. The defendant prominently and extensively used logos identical or similar to Tesla’s registered trademarks on signboards, store decorations, and in-store advertising posters on its business premises. Such use was likely to make the relevant public associate the identity of the defendant’s store with the specific product source of Tesla electric vehicles, and make the relevant public mistakenly believe that the defendant was legally authorized by Tesla, or that it was associated Tesla’s official used car dealer or a dealer that were closely related to Tesla. These actions were likely to cause confusion to the relevant public to believe that there were special associations, corporerations, or authorizations between Tesla and the defendant. Therefore, the defendant’s use of its logos constituted trademark infringement.

Regarding copyright infringement, Tesla enjoys copyright to the  artwork based on the registration certificate submitted when the defendant could not provide contrary evidence. The defendant used Tesla’s artwork without authorization on its store signs, interior decorations, and promotional posters, which has infringed Tesla’s right of authorship and reproduction. Regarding the defendant’s defense that Tesla’s artwork and its trademarks constituted coopetition, and it was inappropriate to be judged twice, the court held that trademark rights and copyrights were two different types of rights, and there were obvious differences in protection objects, legislative purposes, and protection principles. Therefore, an act constituted an infringement of both copyright and trademark constituted coopetition, but no repeated judgement.

Regarding unfair competition, first, in this case, Tesla enjoys the exclusive right to use the “Tesla in Chinese” trademark, and its “Tesla in Chinese” brand has already gained certain influence through operation and promotion. Subjectively, the defendant clearly has the intention of taking advantage of Tesla’s well-established reputation by using its registered trademarks “Tesla in Chinese” as its corporate name without authorization. The word “Tesla in Chinese” is a core identification element in Tesla’s corporate name. “Tesla in Chinese” contained in the defendant’s company name is the same as Tesla’s registered trademark and company name, which was likely to cause confusion to the relevant public to believe that the defendant is Tesla’s branch or has other relationship with Tesla, which constituted unfair competition. Second, the defendant used the words “the unique Tesla franchised used car in China” in its publicity. The word “unique” was used with an absolute meaning to describe its own business, which strengthened its connection with Tesla. With normal cognitive and reading logic, ordinary consumers would believe that it is a direct store of Tesla or has a certain connection with Tesla, which will easily lead to misunderstandings by the relevant public, thereby increasing the defendant’s own competition. Therefore, the court supported the plaintiff’s claim that the defendant constituted false propaganda.

In summary, the court determined that the defendant should compensate economic losses and reasonable expenses totaling RMB300,000 (USD41,110) based on factors such as the popularity of the trademark, the nature and circumstances of the defendant’s infringement, and Tesla’s need to obtain evidence and entrust a lawyer to defend its rights.

2. Theatrical performances infringed trademark rights and were suspected of false advertising

Recently, the Beijing Market Supervision and Administration Bureau imposed administrative penalties on trademark infringement and unfair competition case in the field of theatrical performances.

The Beijing Chocolate Children’s Art Troupe Co., Ltd. (“Chocolate Children’s Art”) used a poster promotional image with a graphic logo of “Jurassic Period in Chinese” on its website, WeChat official account and when selling performance tickets. The graphic logo was composed of a rectangle superimposed on the lower part of a circle. On the upper part of the circle, there was a relief picture of the upper body of a dinosaur bone, the background color was sky blue, and the words “Jurassic Period in Chinese” and “Jurassic period” were on the rectangle. UNIVERSAL CITY STUDIOS LLC is the owner of the  trademark with reg. no. 225445 (“Cited Mark”) in class 41 for “organizing educational or entertainment competitions; organizing performances (performances).” The actions of Chocolate Children’s Art constituted trademark infringement. Since the Cited Mark was registered on November 28, 2020, and is valid until November 27, 2030, the infringement period of Chocolate Children’s Art should be calculated from November 28, 2020. According to the agreement, Chocolate Children’s Art’s total income after November 28, 2020 totaled RMB238,747 (USD32,721).

Chocolate Children’s Art used posters with the logos of “THE CROODS” and “The Croods in Chinese” on its promotional posters in its WeChat public account. DREAMWORKS ANIMATION L.L.C. is the registrant of the “The Croods in Chinese” mark with reg. no. 14821246 that was approved to use in Class 41 for “radio and television program production; performance production” and so on. The actions of Chocolate Children’s Art constituted trademark infringement. Consider that the “The Croods” has not been performed due to COVID-19, there was no illegal turnover.

In addition, from the end of 2019, Chocolate Children’s Art has used “THE CROODS” and “The Croods in Chinese” in its WeChat public account for publicity, using the words “French Avignon Theater Festival Parent-child Interactive Repertoire” and “English version screenwriter/director Ariane Mnouckine, Chinese version adaptation/director Cheng Weishu (Hong Kong, China), art director Herbert mdash, production and production of Pamir performance, France” and other content to conduct commercial promotion for the production of the performance “The Croods.” After investigation, the children’s play “The Croods” produced and performed by Chocolate Children’s Art neither has any recommendation books and documents related to “repertoires recommended for parent-child interaction at the Avignon Theater Festival in France,” nor has any relevant cooperation agreements and documents with the listed personnel. The poster promotional pictures were designed by its employees using still photos as the base map. At the same time, the children’s drama “The Croods” produced and performed by Chocolate Children’s Art was completely self-written in accordance with the script “the Croods” that matched the copyrighted artwork registration certificate. It was completed without any adaptation, and the screenwriter and director were all its personnel. The Beijing Municipal Market Supervision Administration found that the aforementioned publicity of Chocolate Children’s Art constitutes false advertising publicity for the performances of “the Croods,” violated Article 8, Paragraph 1 of the “Anti-Unfair Competition Law.”

Based on the above, the Beijing Market Supervision and Administration Bureau imposed administrative orders a penalties of RMB 558120.68 (USD76,491) in total.

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