In brand competition, some companies often play tricks such as "hitchhiking" and "getting close to famous brands". Would using text similar to others' registered trademarks as a company name constitute infringement? Recently, the People's Court of Baqiao District, Xi'an City tried a dispute over infringement of trademark exclusive rights in accordance with the law.

Case Review

Fujian Hongxing Erke Sports Goods Co., Ltd. (hereinafter referred to as Hongxing Erke Company) was established on June 8, 2000. Its business scope includes the production, wholesale, and retail of sports clothing and various types of sports shoes. It is a large clothing enterprise, and its registered "Hongxing Erke" series trademarks have been used for a long time and widely promoted, with high visibility.

On December 14, 2020, Hongxing Erke Company entrusted an agent to log in to a certain treasure website and found an online store called "Hongxing Erke" selling the "Hongxing Erke" series of products while browsing the webpage. After investigation, it was found that "Hongxing Erke" extensively used the "image" and "Hongxing Erke" trademarks in product titles, product display images, and product details pages. On April 4, 2022, Hongxing Erke Company entrusted an agent to purchase Hongxing Erke coconut shoes at a certain "Hongxing Erke" store, priced at 328 yuan. At that time, 95 pieces had already been sold.

Hongxing Erke Company believes that the infringing products sold by the "Hongxing Erke" store are highly overlapping with the "Hongxing Erke" brand products operated and licensed with trademark exclusive rights in terms of functions, purposes, sales channels, consumer groups, and other aspects. They constitute the same products as the products operated by their own party, causing confusion among relevant consumers about the source of the goods and infringing on their legally enjoyed trademark exclusive rights. The "Hongxing Erke" store heavily uses the "Hongxing Erke" logo to promote and sell infringing products, with subjective intent of free riding. So he filed a lawsuit with the Baqiao Court on the grounds of infringing on the exclusive right to use a trademark. Require the defendant to stop the infringement, publish a statement to eliminate the impact, compensate for economic losses of 50000 yuan, and bear litigation costs.

During this period, Hongxing Erke Company applied to a notary office for preservation and notarization, and the evidence collection process was preserved. The notary office later issued a notarization certificate, which preserved the evidence documents and related electronic data.

Court Trial

After accepting the case, the Baqiao Court confirmed the status of trademark rights in accordance with the law. After trial, it was found that civil subjects enjoy trademark rights in accordance with the law, and trademarks approved and registered by the Trademark Office are registered trademarks, including commodity trademarks, service trademarks, collective trademarks, and certification trademarks; The trademark registrant has the exclusive right to use the trademark and is protected by law. The plaintiff is the registrant of the "Hongxing Erke" trademark and enjoys trademark rights in accordance with the law. The defendant used the plaintiff's registered "Hongxing Erke" name on the same product without the plaintiff's permission, which is enough to mislead consumers and infringe on the plaintiff's exclusive right to use the trademark.

Taking into account factors such as the popularity of the trademark involved, the defendant's infringement behavior, subjective fault, the defendant's sales volume, and the reasonable expenses incurred by the plaintiff to stop the infringement behavior, the defendant is judged to compensate the plaintiff for economic losses (including reasonable expenses) of 20000 yuan, and other litigation claims of the plaintiff are rejected. After the judgment was made, neither party filed an appeal.

Judge's statement

Trademarks solidify the reputation of enterprises, carry the quality of goods or services, and are important intangible assets. This "trademark attachment" behavior not only seriously damages the legitimate rights and interests of brand enterprises and consumers, but also disrupts the market economic order and undermines the fair competition market environment.

The use of registered trademarks in the company name that already have corresponding market awareness and reputation, and whose business scope also belongs to the same industry or directly related industries, clearly has the subjective intention of "free riding" and "standing by famous brands".

Here is a special reminder that the majority of market operators must enhance their awareness of intellectual property rights, be honest and trustworthy, and operate legally. As operators and producers, please actively carry out trademark registration and put on the "coat" of intellectual property protection for innovative achievements. As product sellers and service franchisees, they should exercise reasonable care obligations, choose formal channels for cooperation, and participate in competition in a legitimate manner. At the same time, it is reminded that consumers should choose to purchase from merchants authorized by the brand when purchasing goods.

Source: Xi'an Intermediate People's Court