Weekly China Trademark News Updates

June 8, 2021

1. The Supreme People’s Court issued the Official Reply of Defendant’s Request for Compensation for Reasonable Expenses due to Abuse of Rights by the Plaintiff in IP Infringement Litigation

On June 3, 2021, the Supreme People’s Court (“SPC”) has issued the Official Reply of Defendant’s Request for Compensation for Reasonable Expenses due to Abuse of Rights by the Plaintiff in IP Infringement Litigation (the “Reply”) to be implemented immediately.

The Reply confirmed that, in an intellectual property infringement litigation, if the defendant can provide evidence to prove that the lawsuit brought by the plaintiff constitutes the abuse of rights according to the law, the people’s court should uphold the defendant’s request that the plaintiff should compensate for the reasonable attorney fee, transportation fee, accommodation fee, and other expenses. The defendant may also file another separate lawsuit to requires the plaintiff to compensate the said reasonable expenses and fees.

2. The Supreme People’s Court issued the Top 10 Typical Internet Cases

On May 31, 2021, the Supreme People’s Court held a press release for the Top 10 typical internet cases and introduced the overall scheme of judicial protection on the internet. We have selected the following case for your reference.

Typical Case No. 8 – Tianjin Jiaruibao Metal Products Co., Ltd. v. Guizhen Xu, Yanhui Deng, Zhenquan Zhao, Tianjin Duoweisi Carpet Co., Ltd., Tianjin Ouhaoya Carpet Co., Ltd., and Zhejiang Tmall Network Co., Ltd. (Third Party)

On December 9, 2016, Jiaruibao opened a “Jiaruibao Flagship Store” on Taobao’s Tmall platform. Zhenquan Zhao, Duoweisi, and Ouhaoya also opened stores on Tmall platform. All four shops engaged in carpet sales. The offline business locations for all four shops are located in the same area. Since June 2019, Zhenquan Zhao has borrowed Guizhen Xu’s ID card to sell carpet orders through Zhenquan Zhao, Duoweisi, and Ouhaoya’s Taobao stores with a fake “Declaration Letter” issued by the three stores containing false content, and forged them with Guizhen Xu’s signature. Thereafter, the legal representative of Duoweisi Weiliang Zhao entrusted Yanhui Deng, who was familiar with Taobao network business, to complete the copyright registration procedures for the three carpet graphics involved in the case. Based on the said copyright registrations, Weiliang Zhao filed complaints with Alibaba’s intellectual property protection platform alleging copyright infringement against the three hot-selling products in the “Jaruibao Flagship Store” for five times, which resulted in the deletion of some product links. Jiaruibao filed an unfair competition lawsuit. After trial, the people’s court found that Zhenquan Zhao and Duoweisi had conspired and maliciously used Alibaba’s intellectual property protection platform rules to complain about Jiaruibo and led to deletion of its product links constituted unfair competition against Jiaruibao. The court held that Zhenquan Zhao, Duoweisi, Ouhaoya, and Yanhui Deng should compensate Jiaruibao for economic losses of RMB 350,000 (USD 54,670).

Typical significance: The notice of link deletion rule is an important legal rule for resolving infringement disputes among right holders, internet service providers, and internet users. This case is a typical case in which an e-commerce operator falsified facts and defrauded the registration of the related works and issued malicious notices to the internet service platform, which caused the interests of competitors in the same industry to be harmed and constituted a typical case of unfair competition. This case has important exemplary significance for guiding the right holder to correctly exercise the right to request for notice of deletion of links, curbing malicious complaints, and maintaining honesty, fairness, and standardization of the internet order.

The case number is 2019 Jin 0016 Min Chu No. 5880.

For more information on the rest of the Top 10 cases, please visit the following link (in Chinese): http://www.court.gov.cn/zixun-xiangqing-306391.html

3. Rolls-Royce invalidated “LAO SHI LAI SHI in Chinese”

Recently, the Beijing High Court has concluded a second instance administrative trademark invalidation dispute between Rolls-Royce PLC (“Rolls-Royce”) and Yongkang Tiewang Industry and Trade Co., Ltd. (“Tiewang”). The court affirmed the first instance court’s decision and rejected the CNIPA’s petition to appeal.

The Beijing High Court found that the disputed trademark “Lao Shi Lai Shi in Chinese” and the cited mark 1 “Rolls-Royce in Chinese” were relatively similar in text composition, pronunciation, and overall visual effects. Considering that the cited mark 1 enjoyed relatively high fame in “car” related goods, and such a term was not a commonly used vocabulary with strong distinctiveness, Tiewang should have known about this, but it did not make a reasonable effort to avoid applying for a trademark registration that was similar to the cited mark 1. Such an application was hardly a coincidence. Therefore, it can be determined that the disputed trademark constituted as an imitation of the cited mark 1. Although there were certain differences between the goods of the disputed mark such as “steel plates, steel pipes, metal doors,” and the goods of the cited mark 1 such as “cars” in terms of function, use, manufacturing unit, sales channels, considering the extent of the overlapped relevant public, similarity of the marks, and the well-known status of the cited mark 1, one can determine that the registration of the disputed mark may mislead the public, weaken the distinctiveness of a well-known mark, and thereby harm the interests of Rolls-Royce. Therefore, the registration of the disputed trademark constituted as the circumstances described in the third paragraph of Article 13 of the Chinese Trademark Law 2014.

The case number is 2019 Jing Zhong No. 9721.

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