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Weekly China Trademark News Updates – October 12, 2021

2021-10-12

Weekly China Trademark News Updates

October 12, 2021

1. Osram successfully invalidated the “Ou Shi Lang in Chinese” trademark

Recently, the Beijing High Court made a second-instance judgment on the invalidation of the “Ou Shi Lang in Chinese” trademark (“Disputed Mark”) with reg. no. 18331958 that rejected the CNIPA’s appeal and affirmed the first-instance court’s judgment that the Disputed Mark constituted as a similar trademark used on the same or similar goods with the cited trademark of Osram Co., Ltd. (“Osram”).

Disputed Mark Cited Marks 1 & 4 Cited Marks 2 & 5 Cited Marks 3 & 6

The court found that: the Disputed Mark “Ou Shi Lang in Chinese” constituted as similar to the Cited Marks 1 & 4 and the Chinese portion of the Cited Marks 2 & 5 in terms of composition and pronunciation. The Disputed Mark also constituted as similar to the Cited Marks 3 & 6 because “OSRAM” corresponds to “Ou Si lang in Chinese.” The Disputed Mark’s approved goods for “video display products” did not fall into the same subclasses with the cited marks’ approved goods for “light-emitting diode, electronic bulletin board, image recording equipment, image transmission equipment, lighting equipment and devices, and lighting equipment,” but were closely associated in terms of function, sales channel, sales target, etc. Considering that the evidence can prove that the cited marks 4 & 6 enjoyed certain fame on lighting equipment, the co-existence of the Disputed Mark and the cited marks were very likely to cause confusion to the relevant public or believe that there were certain association between the goods and the source of the goods. Thus, the Disputed Mark constituted as similar marks to the cited marks on identical or similar goods. The Disputed Mark violated Article 30 of the Chinese Trademark Law. The first-instance judgment was affirmed.

2. Ralph Lauren prevailed in the second instance unfair competition dispute regarding the “POLO” logo and was awarded RMB 3 million in damages

The Beijing IP Court concluded a copyright infringement and unfair competition dispute between appellants Ralph Lauren Corporation (“RLC”), Polo/Lauren Company, LP. (“PLC”) and appellees Guangzhou Gangpai Garment Co., Ltd. (“Gangpai”), appellees Guangzhou Huaren Garment Industry Co., Ltd. (“Huaren”), Beijing Dahongmen Fuhai International Trading Co., Ltd. (“Fuhai”) which revoked the first-instance decision and ordered Gangpai and Huaren to stop use PLC’s corporate name and compensate PLC RMB 3 million in damages and RMB 100,000 in reasonable litigation expenses.

The Beijing IP Court found the following facts in its judgment:

Regarding the first issue, whether the three appellees infringed the two appellants’ copyrighted art works. The two appellants claimed that the artworks involved in this case should be protected by the Copyright, and the two appellants enjoyed the copyright of the artwork, however, there were excessive differences between the racket swinging movements, riding gestures between the accused horse-riding logo and the artwork involved in this case, which did not constitute as similar. The two appellants’ claims that the three appellees infringed its copyright could not be supported. The first-instance court’s decision should be affirmed.

Regarding the second issue, whether the three appellees’ use of the appellants’ packaging and decoration amounted to unfair competition. The two appellants claimed the packaging features of gold metal hooks and wooden hangers, cardboard shopping bags, belt packaging boxes, and a series of its decoration features were existing and common designs in the apparel industry that did not have distinctive features compared to other similar goods. The claimed features did not constitute as packaging or decoration under the Anti-Unfair Competition Law of China (“AUCL”) and the two appellants’ claims shall not be supported. The first-instance court’s decision should be affirmed.

Regarding the third issue, whether the accused Gangpai used unfair means to imitate the two appellant’s well-known trademarks amounted to unfair competition. There are express provisions in the Chinese Trademark Law on the two appellants’ accusations, and according to the legislative intent of the AUCL, the specific law that regulated the alleged action should be applied over the AUCL. The two appellants’ claims shall not be supported.

Regarding the fourth issue, whether the three appellees use the two appellants’ corporate names without authorization amounted to unfair competition. First, before the infringement of its corporate name, the two appellants continued to promote and use the “POLO” logo on clothing products in China through media reports and the establishment of retail stores. The “POLO” logo enjoyed very high reputation among the relevant public in China. “POLO” was the main part of the trade name that the two appellants have been using since their establishment. According to the relevant public’s long-term exposure of the term “POLO,” the relevant public was accustomed to using the “POLO” logo to refer to the appellants, which constituted as the abbreviation of the appellants’ corporate name. Therefore, “POLO,” as the appellants’ name and abbreviation, should be protected under the AUCL. Second, the appellants accused the Gangpai and Huaren of unauthorized use of the infringement marks “LEYUDN POLOPOS,” “POLO SIMON, “POLO SIMON,” and “Paul Simon in Chinese & POLO SIMON.” Gangpai and Huaren argued that these were legally registered trademarks, however, these marks were invalidated by the people’s courts. According to Article 47 of the Chinese Trademark Law 2019 and Article 30 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Administrative Cases for the Authorization and Confirmation of Trademarks (Amended in 2020), the above-mentioned trademarks were not protected by the exclusive right to use from the beginning. Therefore, Huaren’s arguments were untenable. Third, the accused clothing products such as T-shirts, casual pants, belts, etc. were identical or similar to the appellants’ famous clothing products; the alleged infringing luggage had strong relevance to clothing goods in terms of function, use, sales channels, target consumer, etc., especially in this case, where these products were all placed and sold in the same retail store, which had caused consumers to be confused, bought and misidentify the goods. Thus, the alleged infringing goods constituted as similar goods. The use of “LEYUDN POLOPOS,” “POLO SIMON,” “POLO SIMON,” “Paul Simon POLO SIMON,” and other marks containing the words “POLO” on the above-mentioned accused infringing goods constituted as similar to the appellants’ corporate name “POLO” in terms of overall visual appearances, which was likely to cause the relevant public to misidentify and constituted as use other’s corporate name as goods without authorization. According to the corporate name marked on the packaging and tag of the infringing goods, it can be determined that Huaren was the manufacturer and seller of the goods, and Gangpai was the authorized licensor of the infringing mark. The company registry of Gangpai showed that its legal representative was former Huaren shareholder and supervisor, which proved its association. Therefore, Gangpai and Huaren shall be jointly and severally liable. Consider that when the alleged infringement occurred, RLC’s corporate name did not include the “POLO” logo, the claim of unauthorized use of its company name were not supported, that is, the court only found that Gangpai and Hauren’s use of PLC amounted to unfair competition. Gangpai and Huaren were ordered to stop using the infringing logo, to publish news to eliminate negative impacts, and to compensate for losses. The first-instance judgment erred in application of law and this court amended.

Regarding the issue of compensation for losses, since PLC did not provide direct evidence of the actual losses suffered due to the infringement and the infringer’s gains due to the infringement, the court referred to the duration of the infringement involved, scope of implementation of the infringing actions, sales price of infringing goods, and other subjective infringing factors to ascertain an economic compensation within the scope of statutory compensation. Especially considering the fact that the official website of the Gangpai introduced that “the brand “POLOSIMON” has been created since 2010, and there are nearly a hundred stores across the country,” it can prove that its infringement duration was long and the profits were huge; Gangpai has never applied for the registration of a separate “POLO” word mark, but clothing displayed in its business premises has a separate “POLO” logo, and its official website emphasized that its products “incorporate American style,” which proved that the Gangpai had obvious bad faith in taking advantage of other’s goodwill. Although the appellants filed a separate lawsuit against Huaren and Gangpai’s infringement of its trademark rights and claimed financial compensation, the above facts were sufficient to prove that Huaren and Gangpai have made huge profits from the infringement and its gains obviously exceeded the amount of economic compensation claimed by the appellants. Therefore, the Beijing IP Court fully supported PLC’s economic compensation. At the same time, supported the appellants’ request for reasonable litigation expenses including notarization fees, copy fees, and lawyer fees.

Since Fuhai was a marketing organizer, the existing evidence proved that it has fulfilled its duty of reasonable duty in selling the alleged infringing goods to the merchants, and had no subjective fault, so it shall not assume legal responsibility.

3. The decoration of “Yuan Qi Sen Lin” shall be protected and Yuan Qi Sen Lin was awarded RMB 650,000 in damages

The Beijing IP Court concluded a second-instance unfair competition judgement involving appellants Yuan Qi Sen Lin (Beijing) Food Technology Group Co., Ltd. (“Yaun Qi Sen Lin”), Zhejiang Quanshui Dingdong Food Co., Ltd. (“Quanshui Dingdong”) and appellees Beijing Jingdong Sanbailushi Du E-Commerce Co., Ltd. (“JD.com”) and Zhejiang Tmall Network Co., Ltd. (“Tmall”) that rejected the appellants’ appeal and affirmed the lower court’s decision.

Regarding the first issue, whether Yuan Qi Sen Lin’s products constituted having certain influential product name, packaging, and decoration. The Beijing IP Court found that starting from June 2018, Yuan Qi Sen Lin has promoted its products through various online and offline methods to make its products known to the relevant public in a relatively short period of time. According to the notarization and audit submitted by Yuan Qi Sen Lin and other evidence can prove that Yuan Qi Sen Lin’s products had a large sales volume before July 2019 and were highly ranked. Therefore, based on the sales, the duration, extent, and geographic scope of its products, its products can be deemed to have a certain impact. According to the first-instance’s fact findings of the packaging and decoration of Yuan Qi Sen Lin’s products, its products were unique in design, fonts, color, shape, arrangement and combination. The evidence was insufficient to prove that the packaging and decoration have been commonly used by relevant products. As mentioned, after the continuous promotion of Yuan Qi Sen Lin, the relevant public has assocaited the products that use its packaging and decoration with Yuan Qi Sen Lin, which has the function of identifying the source of the goods, and can be regarded as the distinctive packaging and decoration of Yuan Qi Sen Lin’s products.

Regarding the second issue, whether the alleged infringement of Quanshui Dingdong amounts to unfair competition. The packaging and decoration of Quanshui Dingdong’s products were highly similar to Yuan Qi Sen Lin’s products in terms of color, main composition of pattern, layout, product text introduction, and shape. Although there were differences in details, there was no obvious overall differences, which was likely to cause confusion to the relevant consumer. Therefore, the first-instance court did not err in finding that Quanshui Dingdong’s actions amounted to unfair competition.

Regarding the question of whether the amount of compensation ordered in the first-instance judgment is reasonable, since Yuan Qi Sen Lin and Quanshui Dingdong did not submit sufficient evidence to prove Yuan Qi Sen Lin’s actual losses and Quanshui Dingdong’s infringement profits, the first-instance court comprehensively considered the degree of fame, operation duration, scope, and sales methods of Yuan Qi Sen Lin’s products, and the subjective fault of Quanshui Dingdong, its operation duration, scale, and sales in ascertaining that Quanshui Dingdong shall compensate Yuan Qi Sen Lin for economic loss of RMB 650,000 (USD 101,000) was appropriate. Moreover, it is not inappropriate for the first-instance court to support Yuan Qi Sen Lin’s claim of a reasonable enforcement expenses of RMB 70,000 (USD 1,087).

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