Weekly China Trademark News Updates

November 30, 2023

1. Michelin won a RMB 10 million verdict against “Mizhilian in Chinese” for trademark infringement and unfair competition

Compagnie Generale Des Etablissements Michelin (“Michelin”) sued Shanghai Mizhilian Catering Management Co. (“Mizhilian”) for trademark infringement and unfair competition. The court found that Michelin’s trademark “MICHELIN” with reg. no. 136402 and trademark “Michelin in Chinese ” with reg. no. 519749 in Class 12 did not constitute identical or similar goods with the catering services used by the disputed mark. Therefore, it is necessary to determine whether Michelin’s cited marks constitute well-known marks. Michelin submitted evidence such as trademark registration certificates, business revenue and profit, enterprise ranking, promotion and advertisement expenses, honors received, news reports and previous protection of well-known mark in support of its well-known status. These can prove that the cited marks have been widely known among the relevant public in mainland China for tires in Class 12 and were also well-known to the public. The cited marks are well-known marks on the goods of tires. Regarding the relationship between “MICHELIN” and “Mizhilian in Chinese,” “Mizhilian in Chinese” is the Cantonese equivalent of “MICHELIN.” Although one of the Chinese translations of “MICHELIN” is “Miqilin in Chinese,” it can be ascertained from online media and reports submitted by Michelin that Michelin’s use of the “Mizhilian in Chinese” logo has been promoted for a long time and has been broadly distributed, and its influence and power was not limited to Hong Kong and Macau but also mainland China. There is an inseparable correspondence between “Mizhilian in Chinese,” “Michelin in Chinese,” and “MICHELIN.” The products used by Michelin’s two marks are tires, inner tubes, etc. Considering that Michelin has always been committed to providing travelers with comprehensive information, including travel, restaurants, etc., Michelin’s “Michelin Restaurant and Hotel Guide” evaluates restaurants. The rating is gradually accepted and respected by the public, and its influence is growing. Although Michelin did not directly provide catering services, Mizhilian’s use of “Mizhilian in Chinese” on drinks and snacks, which fell into to the same catering class as Michelin’s catering rating service. The two were closely related. Consumers could easily associate “Mizhilian in Chinese” logo on drinks and snacks incorrectly with the catering rating services provided under the said Michelin’s well-known marks. Mizhilian has damaged the reputation of Michelin’s well-known marks and diluted its distinctiveness, constituting trademark infringement. At the same time, Mizhilian’s registration and use of the “shmizhilian.com” domain name and promotion of the “Mizhilian in Chinese” brand on the domain name constituted an infringement of Michelin’s “MICHELIN” mark with reg. no. 13640, and such use should be stopped. Mizhilian’s use of “Mizhilian in Chinese” as its corporate name constituted unfair competition. Regarding damages, the court calculated the profit from infringement based on the amount of franchise fees collected by Mizhilian and ultimately supported Michelin’s claim for damages of RMB10 million (USD1.4 million).

2. RMB50 million in damages awarded to the owner of the “CHILDLIFE” mark

Clarke, Murray Collin, BIOZEAL, LLC and Weimi E-Commerce (Shanghai) Co. Ltd. sued Qidong Lu, Nanjing Childhood Time Bio-Technology Co. Ltd. (“Nanjing Childhood Time”), and Zhejiang Jixiang E-Commerce Co. Ltd. for trademark infringement and unfair competition. The court found that Clarke registered the “CHILDLIFE” mark in the United States on January 30, 1996, and then applied for a territorial extension to China on February 6, 2006 (International Registration No. G880154). After this mark expired, Clarke reapplied for the same mark on December 2, 2016 in Class 5, which was approved for registration on January 21, 2018 and remains valid. Clarke had a license agreement with BIOZEAL that allowed BIOZEAL to use the said mark exclusively. According to the facts found in the evidence, the use of “CHILDLIFE” as the trade name of the inne products sold by the overseas flagship store of Nanjing Childhood Time, and the sale of the CHILDLIFE products and the use of the word inne in the promotional images constituted trademark use. The infringing store used the trademark “CHILDLIFE” on its inne products without BIOZEAL’s permission, and the infringing goods and the “CHILDLIFE” products were both children’s nutritional solution products, which constituted the same goods. Considering the distinctiveness and popularity of the trademark “CHILDLIFE,” the use of the trademark “CHILDLIFE” in the key position of the sales picture of the inne products was likely to cause confusion and misrecognition among the relevant public. Therefore, the use of the trademark “CHILDLIFE” by the infringing stores in the sale of inne products constituted trademark infringement. At the same time, although the infringing store’s use of the “CHILDLIFE” trademark during the sale of inne products did not constitute as removing other’s trademarks in the physical sense, in essence, it has the same function and effect of removing other’s trademarks. It also infringed on the “CHILDLIFE” trademark identification function and caused public confusion and misunderstanding. Therefore, the infringing stores constituted trademark infringement and its act constituted reverse counterfeiting. With regard to unfair competition, according to the evidence in the case, Childlife products entered China in 2006, and have gained a certain degree of popularity and many honors and awards in the market of children’s nutritional solution, with a long sales time, wide area and large sales, and their packaging and decoration had a certain degree of influence in the market of children’s nutritional supplements and so on. Although there is a difference between the inne products and Childlife products, but because Childlife products’ packaging and decoration have a high reputation, inne products packaging and decorations could easily cause confusion and misrecognition to the relevant public, the two constituted substantially similar. Therefore, the infringing store sales of inne products with the aforementioned decoration constituted unfair competition. In addition, “Childhood Time in Chinese” is BIOZEAL’s influential trade name, and the unauthorized use of the trade name “Childhood Time in Chinese” by Nanjing Childhood Time after the termination of the distribution relationship between the two parties constituted unfair competition. At the same time, Nanjing Childhood Time’s false publicity behavior/malicious complaints/use of the ”Childlife” keywords also constituted unfair competition. With regard to damages, the court held that the infringing behavior of Nanjing Childhood Time constituted aggravated circumstances, and the punitive damages shall be applied. According to the statistics, the sales of the infringing goods amounted to RMB300 million (USD42.24 million), and the punitive damages in this case amounted to RMB120 million (USD16.9 million) based on a profit margin of 20%. Accordingly, the court supported the plaintiffs’ claim of RMB50 million (USD7 million) in damages.

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