Weekly China Trademark News Updates

May 10, 2023

1. The CNIPA issued the “Work Plan for Systemically Governing Bad Faith Trademark Registration and Promoting High-quality Development (2023-2025)”

On May 8, 2023, the CNIPA issued the ” Work Plan for Systemically Governing Bad Faith Trademark Registration and Promoting High-quality Development (2023-2025).” The work plan is aimed at consolidating the achievements in combating bad faith trademark registration in recent years and deepening the governance of bad faith trademark registration in all fields.

2. “IKEA” is recognized as a well-known mark

Inter IKEA Systems B.V. (“IKEA”) sued Qingdao Yi Jia Staircase Co., Ltd., Linyi Mingde Yi Jia Home Furnishing Co., Ltd., Shanghai Red Star Macalline Brand Management Co., Ltd. Rizhao Branch, and Wang Zhaobin for trademark infringement and unfair competition.

The court found that IKEA is the owner of the “IKEA in Chinese” mark with reg. no. 5782277 and the “IKEA” mark with reg. no. 175291. The said marks were all valid. The defendants used a large number of logos such as “IKEA in Chinese” and “Mingde IKEA in Chinese” in WeChat public account and sales channels and manufacturing sites of “IKEA Whole Wood Mansion,” etc., which constituted identical and similar with the “IKEA in Chinese” trademark with reg. no. 5782277. The defendants used “IKEA” in WeChat public account during the poster publicity week, which was identical with the “IKEA” mark with reg. no. 175291. It was very easy for the relevant public to mistakenly believe that the defendants or their products were related to the plaintiff. The defendants’ action constituted trademark infringement. Regarding the use of the “ENKEA” mark, IKEA’s “IKEA” mark with reg. no. 175291 was registered in China since  1982. After years of use by IKEA, that is, large-scaled publicity and promotion, it has been widely known to the relevant public and has been recognized by administrative agencies and judicial agencies as a well-known mark and has received protection for many times. It should be recognized as a well-known mark. This particular mark reached well-known status before Yi Jia Staircase Co., Ltd. registered its “ENKEA” mark with reg. no. 7682322 on September 8, 2009. Combining the series of acts of the defendant Yi Jia Staircase Co., Ltd., its registration and use, the registration was a bad faith registration and should not be restricted within five years from the date of trademark registration, and the plaintiff has the right to request prohibition of its use. The defendants Yi Jia Staircase Co., Ltd. and Mingde Yi Jia Company used “ENKEA” in large quantities in its WeChat public account, “IKEA Whole Wood Mansion,” and other sales places, production workshops, etc. Compared with the “IKEA” mark, the mark “ENKEA” is similar with the “IKEA” mark in the combination of letters and pronunciation, and these marks shall constituted similar marks under the Chinese Trademark Law, which was likely to cause the relevant public to believe that the defendants or their products were associated with IKEA. Thus, the defendants’ actions infringed upon the trademark right of the “IKEA” mark with reg. no. 175291 owned by IKEA, and such use should be prohibited. The defendant, Red Star Macalline Rizhao, is a professional company engaged in the business of furniture products and should have a relatively high review obligation. The contract between the defendants and the third party clearly stipulated that the operating brands were ” IKEA in Chinese Staircase” and “ENKEA IKEA Whole Wood Mansion” and when the “ENKEA” and “IKEA” logos were clearly used in the store, as a store operator, Red Star Macalline Rizhao did not perform reasonable management duties, which constituted trademark infringement. At the same time, the defendant Yi Jia Staircase Co., Ltd. registered the domain name “enkea.cn” where the identifying “enkea” in this domain name is similar to IKEA’s “IKEA” mark with reg. no. 175291, and the defendant used it as a domain name in publicity and in contact with customers. It was very likely to cause confusion, which constituted trademark infringement of the “IKEA” mark with reg. no. 175291.

With regard to unfair competition, the defendant used the plaintiff’s “IKEA in Chinese” mark with reg. no. 5782277 as its business name, and the business scopes of the two defendants were similar to that of the plaintiff, which could easily lead to confusion among the relevant public, who believed that the defendants and the plaintiff had a direct relationship. This behavior constituted unfair competition. In summary, the court held that the defendants should stop infringing on the plaintiff’s trademark rights, and ruled that the defendants Qingdao Yi Jia Staircase Co., Ltd. and Linyi Mingde Yi Jia Home Co., Ltd. should stop using the word “Yi Jia in Chinese” in their business names. And they should compensate IKEA for economic losses and reasonable expenses of RMB3 million (USD433,025), the defendant Wang Zhaobin was jointly and severally liable for compensation, and the defendant Shanghai Red Star Macalline Brand Management Co., Ltd. Rizhao Branch should compensated Ikea for economic losses and reasonable expenses of RMB50,000 (7,217).

3. Huawei was awarded double punitive damages of RMB 5 million in a trademark infringement lawsuit

Huawei Technologies Co., Ltd. (“Huawei”) sued Shenzhen Shangpai Technology Co., Ltd. (“Shangpai”) and Liu Yuliang for trademark infringement and unfair competition. Later, Huawei removed the unfair competition claim.

The court found that Shangpai set “Huawei” as a search keyword and prominently used “Huawei in Chinese” and “HUAWEI” logos in product display pictures, which could have the effect of identifying the source of goods for consumers, so the court determined that the use of the accused infringing logo belonged to trademark use under the Chinese Trademark Law. In this case, the accused infringing mobile phone stabilizer fall into the same class of goods as those goods approved under the “HUAWEI” mark with reg. no. 16844938 approved for photographic equipment racks and camera tripods. Though the accused infringing mobile phone stabilizer was not similar to the “HUAWEI” mark with reg. no. 14203957 approved for smartphones, cameras, earphones, and mobile phone protective cases based on the the CNIPA Goods and Services Classification, however, the CNIPA Goods and Services Classification was for reference only. In actual use, it belongs to the supporting facilities for the use of camera functions in smartphones. The functions and uses of the two were closely related, and there was a certain overlap in sales channels and consumers, which constituted similar goods. Regarding the similarity of trademarks, the “Huawei in Chinese” mark in this case was exactly identical to the “Huawei in Chinese” mark with reg. no. 16844938. The accused infringing mark “HUAWEI” with the “HUAWEI” mark with reg. no. 14203957, the 8 pastel flower logo and the HUAWEI text were identical. The former has an extra line of text at the bottom, and the details of the two were slightly different, but the overall structure was similar. Based on the general attention of the relevant public, it was easy for the relevant public to misidentify the source of Shangpai’s products or believed that its source had a specific connection with the goods registered by Huawei, which was likely to cause confusion, and constituted as similar marks. Therefore, Shangpai’s use of the “HUAWEI” logo in the process of selling mobile phone stabilizer products in the online store constituted an infringement of Huawei’s “HUAWEI” mark with reg. no. 16844938 and the “HUAWEI in Chinese” mark with reg. no. 14203957. Regarding the amount of compensation, Huawei requested the application of punitive damages, taking Shangpai’s benefits from the infringement as the compensation base, plus twice the punitive damages. The court comprehensively considered the subjective fault degree of Shangpai and the objective infringement circumstances. In order to effectively play the role of punitive damages in punishing and preventing infringement, the court determined to double the punitive damages, and supported the calculation method of punitive damages claimed by Huawei, and fully supported Huawei’s compensation claim of RMB5 million (USD722,157) against Shangpai.

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