Weekly China Trademark News Updates

February 14, 2023

1. Decathlon prevailed in an unfair competition lawsuit with RMB 2 million in compensation

Recently, the Anhui High People’s Court rendered a decision for an unfair competition lawsuit in favor of Decathlon and Decathlon (Shanghai) Sports Goods Co., Ltd. (“Decathlon”), against Fujian Aoku Sports Goods Co., Ltd. (“Aoku”). The court found Aoku infringed upon Decathlon’s trademarks and its acts amounted to unfair competition. The court ordered Aoku to compensate Decathlon’s reasonable expenses of RMB 2 million (USD293,500) to stop the infringement.

The court found that considering the time when Decathlon entered the Chinese market, its business scale, publicity duration and influence of the Decathlon brand in China, the storefront decoration protection requested by Decathlon has reached the “certain influence” requirement under the Anti-Unfair Competition Law. According to the facts found in this case, it can be concluded that there were many similarities in the decoration of the two storefronts, whether it is the overall style or the selection of details, mainly including facade advertisements, posters, and sports figures. It is not easy to notice the difference between the two when the relevant public pay general attention. And it should be determined that the decorations of the two storefronts were similar. Since the overall image of the decoration used by Decathlon has distinctive features to distinguish the source of goods, the decoration used by Aoku was visually very similar to the unique decoration of Decathlon. In addition, Aoku has published many articles on its official website, saying that Aoku is the “Decathlon” in the field of sports and outdoor brand franchises, “Joining Aoku, becoming China’s Decathlon,” ” Aoku outdoor sports supermarket, China’s Decathlon,” and so on. Therefore, even if there were differences in price, quality, consumption level, etc. between the two stores, and the store signs and trademarks are different, it will inevitably make it easy for the relevant public to mistakenly believe that there was some kind of economic connection between the two parties. Therefore, Aoku’s use of the decoration involved in the case will cause misidentification and confusion to the relevant public.

Regarding the amount of compensation, Decathlon did not provide evidence to prove its losses due to the alleged infringement and the benefits obtained by Aoku due to the infringement. Considering the scale, brand and corporate popularity of Decathlon in China, factors such as operations and publicity in mainland China, the business scale of Aoku, the duration of the alleged infringement, the subjective state of the infringement, the reasonable fees paid by Decathlon to stop the infringement, etc., the court ordered Aoku to compensate Decathlon for RMB 2 million (USD293,500) for the economic losses and the reasonable expenses paid to stop the infringement.

2. The court ordered RMB10.3 million in compensation for maliciously taking advantage of the reputation of Mosaic’s “Mosaic in Chinese” trademark, trade name and packaging decorations

Recently, the Shandong High Court concluded a trademark infringement and unfair competition lawsuit for Mosaic Fertilizers (Beijing) Co., Ltd. (“Mosai”) against Qingdao Meishengyuntianhua Chemical Import and Export Co., Ltd. (“Meishengyuntianhua”), Shijiazhuang Jifengda Chemical Fertilizer Co., Ltd. (“Jifengda”), and Hebei Shendaotan Fertilizer Co., Ltd. (“Shendaotan”) (hereinafter referred to as the “Defendants”). The court found the defendants liable for trademark infringement and unfair competition, ordered RMB10.3 million (USD1.5 million) in compensation for Mosaic.

Cited Mark

Mosaic was authorized to use the “Mei Sheng in Chinese” mark and the “Mosaic & Design” mark (“Cited Marks”) owned by its parent company. The Court found that the Defendants jointly manufactured and sold the infringing products, which were identical to the approved goods under the Cited Marks. The use of the “Meisen & Design,” “Mei Shen Yun Tian Hua in Chinese” and other logos by the Defendants were trademark use. When comparing the Cited Marks with the marks and logos used by the Defendants, the composition, design style, overall visual appearances were similar, which was likely to cause confusion to the relevant public as to the source of goods. In addition, Jifengda and Shendaotan had applied for “Meisen & Design,” “Mei Shen Yun Tian Hua in Chinese” marks but were both rejected by the CNIPA. Accordingly, the Defendant’s use of the said marks and logos infringed upon Mosaic’s trademark right.

Regarding unfair competition, first Mosaic was established On December 17, 2008, earlier than April 26, 2017, when Meishengyuntianhua were established. Through operation, publicity, promotion, and use by Mosaic, fertilizers marked with the “Mosaic in Chinese” mark amassed very high market fame and was known to the relevant public. As an operator in the same field of business, Meishengyuntianhua should have known about the fame and influence of “Mosaic in Chinese,” however, it still registered “Mosaic in Chinese” as its trade name and used in actual business activities, which displayed its objective bad faith in taking advantage of Mosaic’s fame in market competition. Meishengyuntianhua’s acts constituted unfair competition. The infringed products were jointly manufactured by the Defendants, thus, the Defendants’ acts constituted unfair competition. Second, Mosaic’s packaging decoration is known to the public and formed a corresponding relationship with Mosaic that is able to distinguish the source of goods sold by Mosaic through Mosaic’s long term use and promotion. Thus, Mosaic’s packaging decoration should be recognized as to have certain influence under the Anti-Unfair Competition Law. The Defendants’ infringing products consisted identical arrangement and similar visual effect, which constituted unfair competition.

3. Jixiang Moving sued Juneyao Air for trademark infringement and requested RMB30 million in relief

Recently, the Henan High Court Province concluded a trademark infringement dispute between Jixiang Moving Co., Ltd. (“Jixiang Moving”) and Shanghai Jixiang Aviation Logistics Co., Ltd. (“Jixiang Aviation Logistics”), Juneyao Air Co., Ltd. (“Juneyao Air”). The court held that Juneyao Air’s use of “Jixiang Airlines” did not constitute trademark infringement or unfair competition. Juneyao Air’s use of “Jixiang Logistics Ruyida,” “Jixiang Luodipei,” “Jixiang produced Moutai express line” and other slogans constituted as trademark infringement. The court ordered Juneyao Air to compensate Jixiang Moving RMB1 million (USD146,700) for trademark infringement.

Cited Mark

Jixiang Moving was established in February 2004. Jixiang Moving applied for the “Jixiang in Chinese” mark in class 39 that was approved on October 28, 2006 for baggage handling, unloading, delivery, freight, furniture transport, and relocation services. Jixiang Moving alleged that Juneyao Air’s use of the same slogans constituted trademark infringement and unfair competition and requested RMB30 million (USD4.4 million) in compensation in an action against Juneyao Air.

The court found that, regarding unfair competition, Juneyao Air began using the “Jixiang’ mark on May 8, 2006 as its trade name, which was earlier than the application date of Jixiang Moving’s Cited Mark. Although Jixiang Moving claimed it has been using the “Jixiang” trademark since 2004, it failed to provide evidence proving that its mark had obtained certain fame before May 2006. Additionally, the words “Jixiang” were not fanciful words created by Jixiang Moving, it is common words used by the general public. Juneyao Air’s registration of such words as its trade name can be justified. Although Jixiang Aviation Logistics established later than Jixiang Moving, but as a wholly-owned subsidiary of Juneyao Air, its use of “Jixiang” as its trade name was reasonable. Thus, neither Jixiang Aviation Logistics’ nor Juneyao Air’s acts constituted unfair competition.

Regarding trademark infringement, although Juneyao Air has an internal freight department that handles passenger luggage consignment and related freight, which is different from professional cargo airlines. Juneyao Air and Jixiang Aviation Logistics operated individually regarding its finance, human resources used on promoting and publicity of its trade name and trademarks, which have attracted its own specific clientele. Consider the scope of business of Jixiang Aviation Logistics and Juneyao Air were very different, the evidence submitted could not prove that Juneyao Air intended to attach to the fame of the “Jixiang” mark. The evidence was also not sufficient to prove Juneyao Air intended to cause confusion or sever the connection between Jixiang Moving and the “Jixiang’ mark. Jixiang Aviation Logistics used corresponding marks on its WeChat public account and media. Juneyao Air and Jixiang Aviation Logistics used its marks on different occasions. Jixiang Aviation Logistics’s use of “Jixiang Logistics Ruyida,” “Jixiang Luodipei,” “Jixiang produced Moutai express line” and other slogans did not specify that it was based in the aviation field of business. It only showed logistics and cargo services related characteristics, which was similar to the approved services of the Cited Mark. Said acs of Jixiang Aviation Logistics would likely o sever the existing association between Jixiang Moving and the “Jixiang” mark, which would impede the mark’s function to distinguish the services of Jixiang Moving. Thus, Jixiang Aviation Logistics’s acts constituted trademark infringement and should compensate Jixiang Moving RMB1 million (USD146,700) in damages.

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