Analysis of trail difficulties in conflict cases regarding trademark and enterprise name

Cao Liping; Zhang Xuan,[Patent]


One of the manifestations of the gradual maturity of the market economy is the increase of the brand’s awareness of the whole society, and the commercial marks that are directly related to enterprises’ brand are trademark and name of the enterprise. Because the area covered by trademark and enterprises’ name often represent enterprises’ business type and scale, therefore, the conflicts of rights between the two are also increased.
Short words such as enterprises’ abbreviation and name can be used as the referential sign for enterprises’ name, and also the trademark, therefore from the cases entering litigation, the enterprises’ names that are involved in the trademark and enterprises name conflicts, are rarely involve enterprises’ full name, but mainly refer to enterprises’ name, abbreviation. Especially when the word trademark and enterprises’ abbreviation are the same, the situation of disputes happens more common.
Because the types of the cases caused by trademark and enterprises’ name are various, this article will analyze the trial’s difficulties of trademark infringement and unfair competition disputes caused by registration and the behavior of using the enterprises’ name.
Determination of basis of claim
Basis of claim often refers to the legal regulations that allow one party of the litigation to has an advocate towards another party of litigation.[1]In practice, the regulation that is caused by trademark or enterprises’ name mainly involves Trademark Law Article 57, Article 58, and the Confusion term in the Anti-Unfair Competition Law (Anti-Unfair Competition Law (1993) Article 5, Item 3, the amended and current Anti-Unfair Competition Law (2018) Article 6, Item 2 or Paragraph 4).
According to the above regulation, if the plaintiff use registered trademark exclusive right as the right basis, he should own the right through registration, transfer or being authorized, and normally would not consider the reputation and effectiveness of the trademark. However, if it uses enterprises’ name or unregistered trademark as the right basis, then according to the related legal regulation, the enterprises’ names or the unregistered trademark should own certain market reputation.
Basis of claim directly affects which cause of action the plaintiff chooses to conduct right protection. In practice, many operator’s enterprises’ name and abbreviation are similar or even same to their registered trademark. Therefore, when they advocate that others’ behavior of registration or using the enterprises’ name is illegal, whether choose advocate trademark right infringement or unfair competition involve enterprises’ name, the plaintiff needs to make a choice. According to the statistics, in the cases involve such circumstances, ninety percent of the plaintiffs only advocate that the enterprises’ name was confused, eight percent of the plaintiffs advocate the trademark infringement and enterprises’ name were confused at the same time. There is only around two percent of the plaintiffs advocate trademark right infringement. For example, in the IQIYI case[2], the plaintiff owns the “QIYI” and “IQIYI” text trademark, meanwhile, its enterprise’s name also contains the text “QIYI”. However, it only relies on the enterprise’s name to advocate that the “MiaoQiYi” the defendant used in the enterprise’s name has constituted confusion with the enterprise’s name “QIYI” and “IQIYI”, violated the Article 6, Item 2 of “Anti-Unfair Competition Law”. In the “Houze” case[3], the defendant based on its “Houze” registered trademark and enterprise’s name simultaneously, advocated that the defendant constituted confusion of using “Houze” as the enterprise’s name for registration, which violated the Article 58, of Trademark Law, and Article 6, Item 2 and Item 4 of the Anti-Unfair Competition Law. While in the “Caocao tailored taxi” case[4], the plaintiff based on its registered trademark “Caocao tailored taxi” and “曹操 Caocao”, advocated that the defendant’s behavior of using “Caocao” as business name and register enterprise’s name violated Article 58 of the “Trademark Law”.
Regarding the choice of basis of claim, two issues are worth noting in practice:
First, about the application of Article 58 of the “Trademark Law”[5]. This paragraph belongs to the applicability rules, considering that its system arrangement with the Article 57 of the Trademark Law, situation regulation of trademark infringement, right owner advocate apply the Article 58 of the Trademark Law. This situation is not suitable to apply Trademark Law directly but should apply the Antiunfair Competition Law. If the sued behavior belongs to the behavior of utilizing a business logo, then the regulation in Article 6 of the Anti-Unfair Competition Law can be applied[6]. Regarding which article of the sixth paragraph should be applied. Currently there is contradiction exist, one kind of opinion considers, since only the “commodity’s name” in the first paragraph of the sixth article similar to registered trademark, in this way the first paragraph should be referred to; another opinion holds that because of the sixth paragraph deleted the registered trademark in the prior law, the content of the first three paragraphs did not involve registered trademark as well, so only the fourth paragraph can be used.
Second, the issue regarding the coincidence of claims. If the plaintiff’s registered trademark and enterprises’ name are the same, while when the defendant’s enterprises’ name is the same or similar to the plaintiff’s registered trademark and business name, whether the plaintiff can simultaneously make the advocate based on its trademark right and enterprise’s name right? This depends on whether the plaintiff’s advocated litigation behavior is one item or multiple items. Under normal circumstances, one litigation behavior should not be affirmed as trademark right infringement and constitute unfair competition at the same time. Generally speaking, if the defendant highlights the use of enterprises’ name or abbreviation, then it can be affirmed as trademark use. When the operation that the defendant conducts same or similar to the commodity or service type that the plaintiff’s trademark right involved, then it can depend on the plaintiff’s advocate to affirm the defendant infringed trademark right. While by that time, the unfair competition litigation request towards the plaintiff based on enterprises’ name right will not be supported.
Judgment of logo use
(1) Whether the litigated behavior used trademark or enterprises’ name
The Article 48 of the Trademark Law stipulates the trademark’s user behavior, which refers to use the trademark on commodity, commodity packaging or container or commodity transaction instruction, or uses the trademark onto behavior of identifying the origin of commodities including advertising promotion, exhibition or other commercial activities. Using trademark is to indicate the source of the commodity, and provide convenience for the consumers to purchasing by identifying the brand”; using the enterprises’ name is to indicate the operating body and not to relate to the specific commodity or service.
In practice, in the litigated behaviour that is caused by the dispute involving trademark, and enterprises’ name, the disputes that the plaintiffs use their enterprise’s name to advocate that others use the registered trademark and constitute unfair competition is rare. Most of the disputes are presented as a plaintiff as the trademark owner or enterprise’s name owner advocate that the behavior of the defendant register and use enterprise’s name infringed its trademark right or constituted unfair competition. It can be divided into three categories specifically: First, the defendant enterprises’ name same or similar to the plaintiff’s registered trademark or enterprises’ name and abbreviation and highlight the use of the text in the operating activities; second, the defendant enterprises are same or similar with the defendant’s registered trademark or enterprises’ name and abbreviation. However, the defendant used the enterprises’ name by specifications and did not highlight the use of the name; third, the defendant enterprises name and plaintiff’s registered trademark or enterprise name and abbreviation are same or similar, but the plaintiff did not submit evidences to prove that the defendant actually used the enterprises’ name.
Regarding the behavior of the first category, if the defendant’s enterprises’ name combines with the commodity or service, then it can perform the function of indicating the commodity or service origin. This type of behavior has gone beyond the using scope of enterprises’ name, and often belongs to trademark use.
Regarding the behavior of the second category, the behavior of label the enterprises’ name by specification, which does not belong to trademark use behavior normally. For example, in the “Heineken” case [7], the plaintiff owns the “Heineken” trademark, and the enterprise’s name is “Heineken” as well. The court considered that the defendant use the name “Heineken” to register the enterprise name, and label “supervised by the Changle Xili alcohol Co. Ltd.” on the package of the litigated infringed beer, and conduct promotion and sale of the beer, which has constituted confusion and violated the Anti-Unfair Competition. Another case shows that when the plaintiff obtained evidence, they used the registered trademark as keywords and retrieved that the defendant mentioned the enterprise’s name in the title or body paragraph of their publicity. Still, this type of behavior of the defendant does not belong to trademark use normally.
Regarding the third category behavior, if the defendant only used the text that is same or similar to the registered trademark of others as the text in the enterprises’ name to register, but did not use the enterprise name, then it not belong to trademark use, and will not lead to the confusion of the relevant public. In this way, this type of simple enterprise name registration behavior should not be recognized as trademark right infringement or constitute unfair competition. For example, in the “Miniso” case[8], the plaintiff own “Miniso” registered trademark right, it advocates that the defendant’s behavior of using the registered trademark as enterprise’s name to register to constitute unfair competition. However, in this case, since the plaintiff only submitted the defendant’s registered business information, but did not submit the evidence that the defendant used the enterprise’s name, the court rejected the claim.
(2) Determination of confusion
Regarding the first type of behavior mentioned in the above article, if the defendant’s enterprise’s name is the same with the plaintiff’s registered trademark, and the commodities that the defendant operates are same with the plaintiff’s registered trademark approved products, then it can be presumed that it constitutes confusion. If the defendant’s enterprise’s name is similar with the plaintiff’s registered trademark (normally present as the plaintiff’s registered trademark is the combination of text and graph, but the defendant only used the text among them as the business name), when the commodities operated by the defendant is the same or similar to the approved commodities of the plaintiff’s registered trademark, then it needs to review the confusion factors specifically. For example, in the “Tongdefu” case[9], the plaintiff owns the “Tongdefu” ChineseEnglish and graphic combination trademark, advocate the behavior of the defendant label enterprise’s name and “Tongde Fusong” on its product’s package is highlight the business name and infringed the defendant’s trademark right. The court considered that the two labels of “Hechuan Taopian” and “Chongqing Tongdefu” more prominent compare with “Tongdefu” in the whole package. The behavior of defendant labeling the enterprise’s name did not constitute highlight use, while the historical resources that the defendant submitted showed that it used to utilize the text related to “Tongde Fusong”. Its use of “Tongde Fusong” indicated the history of the business name and operation philosophy, so it is not easy to make the consumer misunderstand that the commodity comes from the plaintiff, in this way it was affirmed that the defendant did not infringe the plaintiff’s trademark rights.
Regarding the second litigated behavior that was mentioned above, it should focus on whether the defendant’s behavior will lead to confusion. For example, in the “Boss” case[10], the court affirmed that the packaging and instruction of the gas stove and extractor hood which are accused infringement, the website operated by the defendant, and the recruiting advertisement of the sales center all marked “Boss electric appliance Hong Kong International (China) Co. Ltd. (Authorized)”, considered the enterprise name’s reputation of the plaintiff is very high, easy to mislead the public to recognize the commodity that the defendant operated as those operated by the plaintiff. Therefore it is affirmed that the defendant constituted unfair competition.
Judge of behavior’s subjective fault
(1) Presumptive fault
In cases of trademark infringement, the focus of disputes and trial are usually on similar signs and alike products. As long as the actor has not obtained the legal authorization to use the trademark and meets the legal requirements, it is generally determined that the actor has infringed the exclusive right to use a registered trademark. In fact, the perpetrator’s subjective fault is also one of the necessary conditions for the determination of infringement. Still, in most cases, this subjective element is confirmed by presumption, and the judgment is usually expressed in terms such as “unauthorized”.
(2) Finding fault
Although a large number of infringements of trademark rights are handled as presumed faults, this method of handling cannot be absolute. Especially when the trademark right and the company name belong to two legal rights, the subjective fault of the perpetrator cannot be ignored to determine whether the relevant act is infringing or not. For example, in the “Ge Li Si” case[11], the court held that the trademark “Ge Li Si” on the 18th type of wallets and other commodities registered by the plaintiff was related to the company name used by the defendant and registered earlier than the clothing. The textual composition of the “Ge Li Si” trademark is exactly the same. “Ge Li Si” itself is a contrived word with no inherent meaning, with strong inherent distinctiveness. According to common sense, the possibility of similar registration due to coincidence is low without contact or knowledge at all. The defendant is located in Shenzhen City, Guangdong Province. The plaintiff has been operating leather goods firm in Guangzhou City, Guangdong Province for a long time. As a commodity operator with close geographical proximity and a relatively high degree of business scope, the possibility that the plaintiff does not know the “Ge Li Si” brand and trademark was low. The plaintiff’s infringement lawsuit against the fair use of the trademark rights obtained by the plaintiff was not in a good intention, constituted an abuse of rights, and his claims related to this should not be supported by law.
The difference from the judgment rule of subjective fault in trademark infringement cases is that in anti-unfair competition cases when the defendant’s conduct constitutes unfair competition, the fault cannot be simply presumed, but sufficient evidence is needed to prove that the defendant’s actions were deliberate or even malicious.
In practice, it can be concluded that the typical case of the defendant’s subjective fault in the registered company name is the intersection of the defendant and the plaintiff in certain areas. The defendant knows that the plaintiff’s commercial logo exists, but still registers words similar to the plaintiff’s commercial logo as the business name. For example, in the “Xiaomuzhi” case[12], the court found that “Tianjin Huashang Company, as the franchisee, signed the “Franchise Chain Operation Contract” with Hangzhou Xiaomuzhi Company as the franchiser of the “Xiaomuzhi” brand on June 30, 2008. The legal representative Tian Mou signed the contract on behalf of the company, and he should know the relevant content of the contract. Although Tianjin Xiaomuzhi Company insisted that it had no connection with Tianjin Huashang Company, and they are two independent legal persons, the two companies’ legal representatives are both Tian. The promotional information and related contact information displayed on the website of Tianjin Huashang Company are straightly directed to Tianjin Xiaomuzhi Company. Tianjin Huashang Company regards its registered business location as the business location of Tianjin Xiaomuzhi Company’s Tianjin Main Store. Based on this, the court found that Tianjin Xiaomuzhi Company had been aware of Hangzhou Xiaomuzhi Company and its operating resources and development trends when it was established, but still regards “Xiaomuzhi” as the corporate name, subjectively “free-riding” and has the intention of clinging to others’ business reputation clearly. A similar situation also includes that the defendant was an employee of the plaintiff. After the defendant left his job, he still chose the same or similar enterprise name as the plaintiff’s commercial logo for name registration and use.
When determining whether the name of the defendant’s registered company has deliberate circumstance such as clinging to the business reputation of others, the reputation of the plaintiff’s commercial logo can be one of the considerations.For example, in the “CaoCao tailored taxi” case[13], the court held that considering the circumstances that time when the defendant was established earlier than the time when the plaintiff was assigned to obtain the trademark rights, the plaintiff used the trademark in question before the establishment of the defendant in a limited area, and the different of the registered places and service users of both parties existed, these are not enough to prove that the defendant’s registration of “CaoCao goods’ taxi” as the company name and use of the company name had the subjective malice of attaching to the “CaoCao tailored taxi” brand or the plaintiff’s reputation.
Of course, the subjective fault of the actor is only one of the elements for determining that the accused act constitutes infringement or unfair competition. The final determination of the nature of the act is a process of comprehensively considering various elements to reach a conclusion, including the aforementioned basis of the right of claim and the use of commercial signs, etc.
1 Wang Zejian: “Civil Law Thinking-The Basic Theoretical System of Claim Rights”, Peking University Press, December 2009, pages 36-41.
2 Beijing Haidian District People’s Court (2018) Beijing No. 0108 Minchu No. 59083 Case of unfair competition dispute between Beijing Qiyi Century Technology Co. Ltd., Beijing Qiyi Century Technology Co., Ltd. and Beijing Miaoqiyi Entertainment Culture Co., Ltd., after the case was pronounced at the first instance, both parties agreed to the verdict, and the first-instance judgment took effect.
3 Beijing Haidian District People’s Court (2017) Jing No. 0108 Minchu No. 55461 Beijing Houze Financing Guarantee Co. Ltd., and Houze Investment Guarantee Co. Ltd. in a trademark infringement and unfair competition dispute case. After the judgment of the first instance, Houze Financing Secured Co. Ltd. filed an appeal and the verdict was upheld in the second instance.
4 Beijing Haidian District People’s Court (2019) Jing No. 0108 Minchu No. 14200, Zhejiang Geely Holding Group Co. Ltd., and Shenzhen CaoCao Good’s Taxi Technology Co., Ltd. and other disputes over trademark infringement and unfair competition. After the judgment of the first instance, both parties accepted, the judgment of the first instance take effect.
5 Zhu Jingwen, editor-in-chief: “Jurisprudence”, Renmin University of China Press, August 2008, 1st edition, page 356.
6 Wang Ruihe, editor-in-chief: “People’s Republic of China Anti-Unfair Competition Law” Law Press, January 2018, page 15 of the 1st edition clearly stated that “the object to be confused is an influential mark”.
7 The Intermediate People’s Court of Weifang City, Shandong Province (2017) Lu No. 07 Minchu No.590 Heineken Brewing Co., Ltd. v. Shandong Jinfulong Beer Co. Ltd., Changle Heineken Wine Co., Ltd., etc. for trademark infringement and unfair competition disputes. After the judgment of the first instance of the case was pronounced, both parties agreed and the judgment of the first instance became effective.
8 Beijing Haidian District People’s Court (2017) Jing No. 0108 Minchu No. 34311 Case concerning trademark infringement and unfair competition between Guangdong Saiman Investment Co., Ltd. and Beijing Jiangxin Yingxiang Culture Media Co. Ltd. After the judgment of the first instance was pronounced, both parties agreed The judgment of the first instance shall take effect.
9 Chongqing Higher People’s Court (2013) Yu Gao Fa Min Zhong Zi No. 292, Chengdu Tongdefu Hechuan Tao Pian Food Co. Ltd. and Chongqing Hechuan District Tongdefu Tao Pian Co. Ltd. in a trademark infringement and unfair competition case. After the verdict was pronounced in the first instance, Chengdu Tongdefu Hechuan Tao Pian Food Co., Ltd. filed an appeal, and the original verdict was upheld in the second instance, which is now effective.
10 Zhejiang Higher People’s Court (2018) No. 20 Zhe Min Zhong, Hangzhou Boss Electric Co., Ltd. and Boss Electric Hong Kong International (China) Co., Ltd. in a trademark infringement and unfair competition dispute. After the judgment of the first instance, both parties All appeals have been brought into effect.
11 The Supreme People’s Court (2014) Min Ti Zi No. 24 Wang et al. and Shenzhen Gelisi Apparel Co., Ltd. infringement of trademark rights dispute case has come into effect.
12 Tianjin Higher People’s Court (2012) Jin Gao Min San Zhong Zi No. 46: Lan Mou, Hangzhou Xiaomuzhi Auto Maintenance Technology Co., Ltd. and Tianjin Xiaomuzhi Auto Maintenance Service Co., Ltd., etc., trademark infringement and unfair competition disputes. After the verdict of the first instance was pronounced, both parties filed an appeal, which is now effective.
13 Same as Note 3.

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