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Weekly China Trademark News Updates
February 22, 2023
1. RMB 3 million in damages! Using TIGI’s thickening cream product’s unique packaging and decoration without authorization constitutes unfair competition
Recently, the Sichuan High Court concluded a unfair competition dispute between Unilever Hefei, Chengdu Yisiyun Trading Co., Ltd. (“Chengdu Yisiyun”), Chengdu Weimei Cosmetics Co., Ltd. (“Chengdu Weimei”), Guangzhou Gaojue Cosmetics Co., Ltd. (“Guangzhou Gaojue”), Chengdu Yili Cosmetics Co., Ltd. (“Chengdu Yanli”). The court affirmed the first instance judgment that the four defendants should immediately stop manufacturing and selling “Yisiyun Baby Thickening Cream” products and compensate Unilever Hefei economic losses of RMB3 million (USD436,185) and reasonable costs of RMB141,410 (USD20,560).
1. Whether the packaging and decoration of the purple ball-shaped body of TIGI’s thickening cream product plus the green pump head combination constitute as product packaging and decoration with a certain influence.
The ball-shaped bottle adopted by TIGI gave people a unique, round, cute and unique visual experience, and the combination of a bright purple bottle and green pump head can also form a strong visual impact. Such packaging decoration is extremely distinctive. Unilever Hefei has entered the Chinese market at least since 2008 and has been using the purple ball-shaped bottle and green pump head as its packaging. It has been sold through online and offline channels with high sales volume and number in a wide spectrum and received countless reviews. Through continuous publicities, reports, and recommendations by many Internet media, fashion bloggers, sellers and consumers, TIGI’s thickening cream and its unique packaging and decoration have gained a high popularity among the relevant public. Chengdu Yisiyun believed that the packaging and decoration of infringing products was not influential. There are at least dozens of similar thickening cream products adopting similar design. The infringing products do not have uniqueness and distinctiveness. The court found that there were 7 brands that have adopted the packaging and decoration involved in the case, but the sales volume was not large, neither was the popularity. Combined with the sales and publicity of TIGI’s thickening cream products, under the circumstances that Chengdu Yisiyun failed to provide sufficient evidence to the contrary, a small number of other brands using similar packaging and decoration would not necessarily cause TIGI’s products to be a common packaging and decoration for thickening cream. Accordingly, TIGI’s thickening cream product design satisfies as a product packaging that has certain influence under Article 6(1) of the Chinese Anti-Unfair Competition Law.
2. Regarding whether the defendants’ acts constitute unfair competition
In this case, the shape and color of the ball-shaped body and green head pump of the infringing products was basically identical with that of TIGI’s thickening cream in terms of overall appearance. Thus, the packaging of infringing products is identical to TIGI’s packaging that has certain influence. The packaging and design of TIGI’s thickening cream has obtained relatively high fame through long-term use, which has established a special connection with TIGI’s thickening cream and can be used to distinguish the source of a product. The target consumer and sales channels of infringing products and TIGI’s products were basically identical, and it is likely to cause confusion among the consumers.
Chengdu Yisiyun used the “EISANSUN” mark on its products that is different from the logo on TIGI’s products. There is a white document inserted inside infringing products’ packaging that labeled with Guangzhou Gaojue’s information in order to avoid possible confusion. The court found, however, that under the circumstances that infringing products and TIGI’s products were nearly identical, the use of black font on infringing products and the design details of the packaging were identical with those of TIGI’s products, simply using a different English logo could not avoid the possibility of confusion.
Accordingly, the defendants used TIGI’s influential purple ball-shaped body and green head pump combination without authorization would cause others to believe that the infringing products come from Unilever Hefei or have special relationship with Unilever Hefei, which constitute unfair competition.
2. In a retrial, the Zhejiang High Court held that an apparel style and model number can be protected under the catch-all provision of the Anti-Unfair Competition Law
The Zhejiang High Court recently concluded an anti-unfair competition retrial case between Hangzhou Jiangnan Buyi Co., Ltd. (“Jiangnan Buyi”) and Jianfei Jiang. The court revoked the second instance judgment and affirmed the first instance judgement that ordered Jainfei Jiang to compensate Jiangnan Buyi for economic loss of RMB1.5 million (USD218,016).
The “Jiangnan Buyi” mark with reg. no. 3005446 owned by Jiangnan Buyi was registered on January 21, 2003 in class 25 and is valid until January 20, 2023. The “JNBY” mark with reg. no. 1278514 was registered by Jiangnan Buyi on May 28, 1999 in class 25 and is valid until May 27, 2029. Both marks were recognized as well-known marks.
In the webstore “Jiangnan Style High Quality Women’s Clothing” store owned by Jianfei Jiang, the products link name including clothing styles and model numbers (5J9841310, 5J7820340, 5J7310620, 5J9311550, 5J9E12540, 5J8820230, 5J0710360, 5J8321500) were identical with those sold on the “Official Flagship of Jiangnan Buyi” except an additional “H” or “A” in front of the styles and model numbers. Additionally, the model numbers displayed in the other 38 clothing products links in the notarization report were identical with the clothing model numbers displayed in Jiangnan Buyi’s clothing brochure or in the “Official Flagship of Jiangnan Buyi.”
Regarding whether Jianfei Jiang’s use of clothing model styles and numbers that are identical with Jiangnan Buyi’s constitutes unfair-competition, the court found the following:
First, Jiangnan Buyi has legal competitive interests for clothing styles and models involved in the case. Although in terms of a specific clothing style, Jiangnan Buyi failed to prove that the styles are original or enjoy some exclusive rights, but as far as its clothing products were concerned, the clothing styles were their core competitiveness. It can bring more competitive advantages to a clothing company. Judging from Jiangnan Buyi’s clothing styles and model numbers, model numbers were specific numbers used to categorize products. Not only are model numbers for management of Jiangnan Buyi or relevant marketing, but they are also an important way for customers to locate clothing that fit their styles. That is, model numbers were primarily used to attract internet traffic. Relevant public can use such model numbers to search Jianfei Jiang’s clothing that share the same model numbers as Jiangnan Buyi. Jiangnan Buyi’s clothing styles and model numbers can bring competitive advantages and benefits, thus it can be protected by under the Anti-Unfair Competition Law.
Second, Jianfei Jiang’s sales of the same style as Jiangnan Buyi and the use of the same clothing styles and model numbers violated the principles of good faith and business ethics, which cannot be justified. As an operator engaged in the clothing industry, Jianfei Jiang has a direct competitive relationship with Jiangnan Buyi. Jianfei Jiang should know the important resources of the clothing styles and model numbers of clothing companies. He should also know that customers usually search for specific clothing styles or model numbers when buying clothing on the Internet. Jianfei Jiang exploited the existing corresponding relationship between Jiangnan Buyi’s clothing styles and model numbers without paying any creative labor. Jianfei Jiang simply copied Jiangnan Buyi’s clothing styles and model numbers in bulk and used the label “Jiangnan Buyi Style” on the landing page in order to take advantage of Jiangnan Buyi’s reputation. Jianfei Jian’s acts could be held to violate the principle of good faith and business ethics.
Last, Jianfei Jiang’s acts damaged the legitimate rights and interests of Jiangnan Buyi and relevant consumers, and disturbed the market competition order. Jianfei Jiang will use the same clothing styles and models as Jiangnan Buyi’s on identical or similar clothing. Jianfei Jiang will search for consumers from Jiangnan Buyi to buy their clothing to obtain unfair competition advantages. Such acts obviously encroached the trading opportunities of Jiangnan Buyi. Suh acts have substantially replaced the goods of Jiangnan Buyi, causing substantial damage to Jiangnan Buyi. In particular, given Jiangnan Buyi resides in fast fashion industry, its product life cycle is short, once the related clothing styles and model numbers are copied, it will cause great damage to the interests of product designers and manufacturers. From the perspective of consumer interests, although related consumers can buy cheaper popular clothing in a short time, if such large copy and counterfeit acts were not regulated, it will inevitably lead to the decline in original design, which would impact consumer’s interest in the long run. Combined with Jianfei Jiang using the words “Jiangnan Buyi Style” on its landing pages, some consumers may mistakenly believe that the clothing purchased from the infringing shop came from Jiangnan Buyi or there was a specific connection with Jiangnan Buyi, which caused the relevant public to be confused and mistaken.
In summary, Jianfei Jiang’s sales of identical clothing style and model numbers as Jiangnan Buyi violated the principles of good faith and business ethics, damaged the legitimate rights and interests of Jiangnan Buyi and consumers, disrupted the normal market competition order, and violated the Anti-unfair Competition Law.
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