Weekly China Trademark News Updates

June 20, 2023

1. Lululemon won RMB 1 million in damages

The Meizhou Intermediate Court of Guangdong concluded a first-instance judgment on the trademark infringement dispute between Canada Lululemon Sports Goods Co., Ltd. (“Lululemon”) and an individual Zhang. The court ordered Zhang to immediately stop trademark infringement and compensate Lululemon for economic losses of RMB 1 million (approx. USD139,446).

The court found that Lululemon owns registered trademarks such as “,” “LULULEMON”, “Lu Lu Le Mon in Chinese,” and “ALIGN.” The said trademarks are registered and valid and shall be protected by the law.

In this case, the alleged infringing goods were identical or similar to those for which Lululemon has the exclusive right to use registered trademarks. The promotional information of the accused online shop and the logos of “Lu Lu Le Mon in Chinese,” “LULULEMON,” “,” and “ALIGN” used on the relevant goods all serve to identify the source of the goods, which constituted trademark use. The said marks used by Zhang were indistinguishable from the registered trademarks claimed by Lululemon, which constituted identical marks. Zhang’s behaviors were enough to cause confusion and mislead the relevant public, which infringed Lululemon’s trademark rights.

In this case, Lululemon claimed that the profit from infringement was much higher than the amount of RMB 1 million claimed by Lululemon, regardless of calculating based on the Zhang’s profit margin, the industry’s profit margin, the profit margin of listed companies in the same industry, or the cost price of the counterfeit goods. The court supported Lululemon’s claim for the compensation amount. The court comprehensively considered Zhang’s degree of subjective fault, infringement profits, nature of infringement, operation method, operation scale, duration, sales amount and other factors, combined with the fame of Lululemon’s registered trademarks, and the reasonable and necessary cost paid by Lululemon to stop the infringement in finding that Zhang should pay Lululemon for economic loss of RMB 1 million (apprx. USD139,446) (including reasonable expenses for stopping the infringement).

2. The Beijing High Court recognized the “Laoshan in Chinese” mark as a well-known mark and granted cross-class protection

The Beijing High Court made a second-instance judgment on the administrative trademark invalidation dispute between Qingdao Heshanquan Natural Food Co., Ltd. (“Qingdao Heshanquan”), the CNIPA, and Qingdao Laoshan Mineral Water Co., Ltd. (“Qingdao Laoshan”). The court found that “Laoshan in Chinese” constituted a well-known mark, and the “Laoshan Peninsula in Chinese” mark shall be invalidated.

The Disputed Mark is the “Laoshan Peninsula in Chinese ” mark with reg. no. 36199582 that was approved to be used on services such as “providing online marketplaces for buyers and sellers of goods and services; displaying goods on communication media for retail purposes; franchising business management; etc.” in Class 35, the current trademark owner is Qingdao Heshanquan.

The Cited Mark is the “Laoshan in Chinese” mark with reg. no. 381702, which was applied earlier than the application date of the Disputed Mark, which is approved to be used in Class 32 for “soft drinks; mineral water; etc.” The current trademark owner is Qingdao Laoshan.

The court found that the Cited Mark has been continuously promoted and used by Qingdao Laoshan for a long time, and had become well-known in mineral water products before the application date of the Disputed Mark. The Disputed Mark contained the Cited Mark, the two marks were similar in terms of word composition, pronunciation, and meaning, and the Disputed Mark constituted a copy, imitation and translation of the Cited Mark. The services such as “buyers and sellers of goods and services provide an online market” under the Disputed Mark and the mineral water under the Cited Mark do not belong to identical or similar goods or services. However, considering that Qingdao Heshanquan and Qingdao Laoshan are located in the same area and both are food business enterprises, the registration of the Disputed Mark is likely to mislead the public, making the public think that the approved services of the Disputed Mark is provided by Qingdao Laoshan or is associated with Qingdao Laoshan, which could damage Qiangdao Laoshan’s interests. The court held that the registration of the Disputed Mark violated Article 13(3) of the 2014 Trademark Law.

3. The applicant of a trademark was canceled, and its trademark application shall not be approved for registration

The CNIPA concluded the opposition action filed by Shanghai Rongying Brand Management Co., Ltd. (“Shanghai Rongying”) against the “Hualai Shifu in Chinese” mark with app. no. 54491795 in Classes 35 and 43 applied by Tangshan Miyuan Enterprise Management Consulting Co., Ltd. (“Tangshan Miyuan”).

The CNIPA found that the opposed mark “Hualai Shifu in Chinese” was designated for use in services such as market research and business analysis in Class 35, and restaurant services in Class 43. Shanghai Rongying cited “Hualaishi in Chinese,” “Hualaishi in Chinese CNHLS & Design” and other marks that were approved in Class 35 for displayed goods on communication media, and restaurants in Class 43. The composition, pronunciation, and overall appearance between the opposed mark and the cited marks were similar and constituted as similar marks. Parts of the opposed mark’s designated services were identical with the cited marks’ approved services. The marks constituted similar marks on similar services and is likely to cause confusion to the consumers.

According to the evidence provided by Shanghai Rongying, Tangshan Miyuan was canceled on May 11, 2021, and its qualification as an entity no longer exists. There was no evidence showing that the applicant had filed an assignment for the opposed mark prior to the cancelation date of the applicant. The CNIPA would accept the applicant’s failure to file an assignment for the opposed mark if the opposed party cannot provide contrary evidence. As a civil right, trademark right should be enjoyed and exercised by a subject with civil entity qualifications. Therefore, the opposed mark should not be approved for registration if the applicant lost its entity qualification. According to Article 4, Article 30, and Article 35 of the Trademark Law, the “Hualai Shifu in Chinese” mark shall not be registered.

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