Shenzhen Ping'an International Hotel Co., Ltd. v. Ping An Insurance (Group) Company of China Ltd.

China IP,[Unfair Competition]

 

Lower Court Docket No.: 1624, first instance (初), civil case (民), (2017) Shenzhen Intermediate People's Court (粤03)

Docket No.: 1853, second instance (终), civil case (民), (2019) Guangdong High People's Court (粤)

 

SUMMARY OF THE ARGUMENT

When it comes to cross-class protection, a right holder can choose the trademark with higher awareness and stronger prohibition right to exercise the holder's right, thus making the recognition of well-known trademarks necessary. Generic vocabulary can have acquired distinctiveness through long-term promotion and use, so the "proper use" of a trademark of the "generic term" nature is limited to the use of the first meaning of the term, i.e. the literal and inherent meaning of the word(s); The use of the second meaning of a "generic term" is actually an infringement act of the good reputation of another's well-known trademarks.

STATEMENT OF THE CASE AND FACTS

Defendant-Appellant: Shenzhen Ping'an International Hotel Co., Ltd. ("Ping'an International Hotel")

Plaintiff-Appellee: Ping An Insurance (Group) Company of China, Ltd. ("Ping An China")

Ping An China was incorporated in 1988 and has expanded its business across the country and to many overseas countries and regions through continuous operations. Ping An China has registered several "Ping An" trademarks in different service categories such as insurance, banking and investment, and the "Ping An" trademark has been recognized as a well-known trademark many times with a high awareness. Now, Ping An China has developed into a large private financial company group, enjoying a high reputation both at home and abroad. Ping'an International Hotel Co., Ltd. was established on January 18, 2013. It had used the logo of "Ping'an International Hotel" in prominent positions of its hotel located in Caitian North Road, Futian District, Shenzhen, and promoted and engaged in business activities through the website www.szharmonyhotel.com, "Ctrip.com" and other means. Ping An China believed that when Ping'an International Hotel was established, the registered trademark of Ping An China numbered 6974784 "Ping An" was already a well-known trademark in the service categories of "insurance", "banking" and "investment", so Ping'an International Hotel's using "Ping An" as its registered brand name was an obvious subjective attempt to take advantage of the awareness of the "Ping An" well-known trademark, constituting an act of unfair competition. Ping An China thus appealed to the Shenzhen Intermediate People's Court, requesting that the Defendant be ordered to immediately stop using the enterprise name and brand name that had infringed on the No. 6974784 "Ping An" well-known and registered trademark of the Plaintiff, immediately change its enterprise name, and the new enterprise name after the change shall not contain the words "Ping An", compensate the Plaintiff for an economic loss of RMB 2 million and reasonable costs of RMB 50,000, and bear the litigation costs of this case.

In the first instance, the Shenzhen Intermediate People's Court ruled that the Defendant Ping'an International Hotel should immediately stop using the company name containing the words "Ping An" and compensate the Plaintiff Ping An China an economic loss of RMB 2 million and reasonable expenses of RMB 33,222 for the defense of its rights, and dismissed other claims of the Plaintiff Ping An China.

Ping'an International Hotel appealed to Guangdong Higher People's Court. Guangdong Higher People's Court ruled in the second instance to reject the appeal and upheld the original judgment. The judgment of first instance has now come into effect.

ANALYSIS

This case involves many theoretical issues in the judicial protection of well-known trademarks. For example, how should the principle of "recognition by necessity" of well-known trademarks be followed in judicial practice? Under the circumstance that Ping An China had already obtained the registration of the "Ping An" trademark No. 6974805 in the category of "restaurants and hotels" under Class 43, is it still necessary to recognize its trademark No. 6974784 as a well-known trademark in the category of "insurance, finance and capital investment"? For a well-known trademark under the category of "insurance, finance and capital investment", can the cross-category protection of well-known trademarks be extended to the category of "restaurants and hotels"?

In this case, the court held that "Ping An" was a common instead of a concocted term, so how should it accurately define the boundary between the "reasonable use" and the infringement of the common words by the parties, i.e. whether the use of "Ping An" by Ping'an International Hotel in this case was a use of the first meaning (i.e. the literal meaning of the term itself) or the second meaning (i.e. the reliable, trustworthy and quality insurance, banking and capital investment services implied by "Ping An") of the term "Ping An"? Did Ping'an International Hotel have the intention of taking advantage of the sound reputation of the well-known trademark "Ping An"?

In this case, the judgment contains a detailed analysis and discussion of the above-mentioned disputed issues, takes into account various factors such as the malicious and continuous infringement of Ping'an International Hotel, and orders Ping'an International Hotel to compensate Ping An China for an economic loss of RMB 2 million.

This case was selected as one of the "2020 Top Ten Typical Intellectual Property Cases of Shenzhen Courts". 

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