Weekly China Trademark News Updates

March 02, 2022

1. RMB 50 million lesson for using “Delu in Chinese” as a corporate name without authorization

The Suzhou Intermediate Court of Jiangsu Province concluded a trademark infringement and unfair competition case in favor of the plaintiffs raumplus Besitz-und Entwicklungs-GmbH & Co.KG, Kasten Dirk Bergmann, Delu (Taicang) Furniture Technology Co., Ltd. against the defendants Delu Furniture (Shanghai) Co., Ltd., Delu Furniture (Nantong) Co., Ltd., and Zhu Peijun. The court ordered the defendants to compensate the plaintiffs for economic losses and reasonable legal costs of RMB 50 million (USD 7.9 million).

The defendants Delu Furniture (Shanghai) Co., Ltd. and Delu Furniture (Nantong) Co., Ltd. were jointly established by the plaintiff Kasten Dirk Bergmann and a third party, Shanghai Leidini Company. Kasten Dirk Bergmann then subsequently transferred all its equity to Shanghai Leidini Company. According to the joint venture contract between the two parties, after Kasten Dirk Bergmann withdraws its capital, the joint venture established by the two parties will no longer use the trade names and trademarks authorized by raumplus Besitz-und Entwicklungs-GmbH & Co.KG, and the joint venture company name needs to be modified.

Defendants Delu Furniture (Shanghai) Co., Ltd. and Delu Furniture (Nantong) Co., Ltd. continued using “Delu in Chinese” as the corporate name and promoted “Leidini in Chinese (LEDINI) is Delu’s customized high end sub-brand” after the plaintiff ended the joint venture with Shanghai Leidini Company. In addition, Delu Furniture (Nantong) Co., Ltd. registered and used the domain name “Delu.com.” The plaintiffs had repeatedly sent demand letters, but it has not effectively stopped the defendants’ infringement.

The court found that in this case, the “raumplus” and “Delu in Chinese” trademarks of raumplus Besitz-und Entwicklungs-GmbH & Co.KG. were all in Class 20 including furniture and other goods, which were identical with furniture sold by the defendants. At the same time, the defendants used the “Delu in Chinese” trademark in furniture invoices, brochures, design drawings, WeChat accounts, store decoration, store fronts, exhibition halls, bidding documents, and used the “raumplus” logo on furniture invoices and public promotion. These marks and logos were identical with the trademarks of raumplus Besitz-und Entwicklungs-GmbH & Co.KG. Accordingly, the defendants’ conduct constituted as using the plaintiff’s registered trademarks without authorization in Class 20 goods. The defendants’ conduct also amounted to unfair competition. Based on the evidence submitted by both parties, the court determined that the sales revenue obtained by the defendants from the alleged infringement through various modes such as bulk business, direct sales, and franchise should be far more than RMB 200 million (USD 31 million), and the profit should be at least RMB 28.1 million (USD 4.4 million). The court found that the defendants had malicious intent to infringe, which met the conditions for the application of punitive damages, so the court fully supported the plaintiffs’ claim of RMB 50 million (UDS 7.9 million) in damages.

2. Assigning squatted trademark to the original rightsholder would not change determination of bad faith hoarding

High-tech Zone Tonganlayashen Trading Firm (“HZTT”) applied for the registration of the “Maviret” trademark with reg. no. 25515429. AbbVie Ireland Unlimited Company (“AbbVie”) later filed an invalidation against the said trademark on January 18, 2019. The CNIPA found that HZTT had applied for registration of more than 50 trademarks on various types of goods and services, including “graboplast,” “joon,” “Amtrust,” “Skytap,” “herbol,” and many other trademarks that were identical or similar to others’ prior trade names and marks. AbbVie had applied to the EUIPO for registration of the “MAVIRET” trademark on September 30, 2016, which was identical with the disputed trademark “Maviret.” And HZTT failed to submitted evidence to show that it had created the disputed trademark independently. The CNIPA reasoned that, as a trading firm, HZTT should be aware of the trade names or logos in the related industries. HZTT’s applications of other’s marks had exceeded general business needs, and had obvious intent to copy, plagiarize, or imitate other’s prior trademarks and trade name. HZTT’s conduct not only caused the relevant public to misunderstand the source of the goods, but also disturbed the normal order of trademark registration and management and damaged the market order of fair competition. Therefore, the registration of the disputed trademark constituted as the situation of “obtaining registration by other improper means” as stipulated in Article 44, paragraph 1, of the Chinese Trademark Law 2013.

On December 10, 2019, HZTT and AbbVie jointly submitted an application for trademark assignment to the CNIPA to assign the disputed trademark from HZTT to AbbVie, which was approved and published on March 13, 2020.

Subsequently, the Beijing Intellectual Property Court made a judgment to dismiss the plaintiff’s claim. The court held that although the disputed trademark has been assigned to AbbVie, the malicious intent of the registration of the disputed trademark cannot be changed. Accordingly, it can be determined that HZTT disrupted the normal order of trademark registration management, damaged the market order of fair competition, and violated the principle of good faith. The registration of the disputed trademark has constituted the circumstance of “acquiring registration by deceptive means or other improper means” as stipulated in Article 44, paragraph 1, of the Chinese Trademark Law. Even if the assignment took place prior to this lawsuit, it would not affect this court’s decision.

3. Manufacture and sell bottles of another’s registered 3D trademark constituted as trademark infringement

Recently, the Shandong High Court ruled in favor of SOCIETE JAS HENNESSY & CO. (“Hennessy”) against Shandong Yuncheng Xinde Packaging Co., Ltd. (“Xinde”) in a trademark infringement case for selling the infringing wine bottle. The court found that Xinde’s manufacturing and selling of the infringing bottle constituted as manufacturing and selling Hennessy’s 3D trademark.

Hennessy owns trademark nos. 3240985, 4842349 and 16269635 as shown below. Many win bottles as shown on Xinde’s website were familiar with Hennessy’s registered trademarks.

The court found that the trademark involved was approved on wine (beverage), and the infringing products were wine bottles, namely, a container for wine. Although the infringing goods and the trademark involved were not the same kind of goods, the 3D shapes of the accused infringing goods and the 3D trademark involved were both wine bottles. In general, wine existed in liquid form and were usually packaged in wine bottles for distribution, and wine sellers and makers usually need to purchase wine bottles to fill wine. Therefore, from the general understanding of the relevant public, wine bottles and wine were closely related in use and function and were related goods. They must be used together in order to be circulated and sold to meet consumer needs; and because wine as a liquid need to be sold in wine bottles, and the two have overlapping sales channels; in terms of consumption objects, due to the relevance of their functions and uses, consumers will also buy wine bottles when purchasing alcohol products. Therefore, the consumption objects of the two also had a certain coincidence and consistency. Therefore, for the relevant public, it was generally believed that wine and wine bottles were goods with a specific connection, and the two should be deemed to constitute similar goods.

Xinde advertised and displayed the infringing wine bottle by displaying the wine filled with the wine bottle. Comparing the infringing wine bottle with the wine bottle in the 3D trademark involved, the shape of the wine bottle, the sticker position of the wine bottle, the shape, size, height, and the overall shape and style of the wine bottle, and the embossed style, shape, and overall appearances were basically identical. The infringing wine bottle and 3D trademark wine bottle involved constituted the same trademark. A 3D trademark had dual attributes, namely, as a container for holding wine and as a trademark logo. Therefore, Xinde’s manufacturing and selling the accused infringing wine bottle was an act of manufacturing and selling Hennessy’s 3D trademark involved in this case.

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