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Watson & Band’s Case selected as one of 2018 Top 10 IP Cases in China Courts by the Supreme People’s Court
Thu Apr 25 11:35:00 CST 2019 Published by:Editor

On April 22, the Supreme People’s Court published the 2018 Top 10 IP Cases in China Courts and the 2018 Top 50 Typical IP Cases in China Courts. Among these cases, the trademark infringement case that Watson & Band represented for UNIQLO Trading Co., Ltd. against Guangzhou Zhinanzhen Exhibition Services Co., Ltd. and Guangzhou Zhongwei Enterprise Management Consulting Services Co., Ltd. [ref: SPC (2018) SPC Civil Retrial No.396 Civil Judgment] is selected among the 2018 Top 10 IP Cases in China Courts.

 

Watson & Band’s Partner Yizhou Liu and Associate Mengfei Yu represented UNIQLO Trading Co., Ltd. and UNIQLO’s Shanghai Global Harbor Store in the said (2018) SPC Civil Retrial No.396 case and the entire series of cases. In the said series of cases, the opposing party was involved in bad faith registrations and legal actions; therefore Watson & Band collected abundant evidence reflecting said bad faith and submitted the evidence to the court. On the other hand, relying on our strong trademark prosecution team, we also petitioned at the client’s instruction to invalidate the opposing party’s trademark. The disputed trademark was finally successfully invalidated by reason of improper registration, greatly contributing to the success of this case.

 

Our tacit cooperation among professional teams and our innovative complex enforcement plan ensure final success of this case and won protection for the client’s legitimate rights and interests.

 

[Case Briefing]

Guangzhou Zhinanzhen Exhibition Services Co., Ltd. (hereinafter “Zhinanzhen Company”) and Guangzhou Zhongwei Enterprises Management Consulting Services Co., Ltd. (hereinafter “Zhongwei Company”) are co-owners of the disputed trademark, which is approved to be used on goods under Class 25.


UNIQLO Trading Co., Ltd. (hereinafter “UNIQLO Company”) and Fast Retailing (China) Trading Co., Ltd. (hereinafter “Fast Retailing Company”) jointly operate the “UNIQLO” brand and run a large number of physical direct-sale stores in MainlandChina. Said trademark was actually used in their business operations.


Zhinanzhen Company and Zhongwei Company filed 42 trademark infringement lawsuits against UNIQLO Company or Fast Retailing Company and different UNIQLO direct-sale stores based on their exclusive right to use the registered trademark in dispute in Beijing, Shanghai, Guangdong and Zhejiang. According to the facts found by the court, Zhongwei Company and Zhinanzhen Company respectively hold registered trademarks in a total number of over 2600, some of which are extremely or considerably similar to well-known trademarks of other parties in terms of pronunciation or visual effect. Furthermore, Zhinanzhen Company and Zhongwei Company once offered to sell the disputed trademark on the Huawei Trademark Assignment Website, and proposed 8 million RMB to Fast Retailing Company for assignment of the disputed trademark.


Shanghai No.2 Intermediate People’s Court ruled in its trial judgment that UNIQLO Company must cease the infringement and dismissed all the other claims. None of Zhinanzhen Company, Zhongwei Company and UNIQLO Company agreed and both parties filed appeals. In its appellate judgment, Shanghai Higher People’s Court rejected the appeals and upheld the trial judgment. UNIQLO Company objected that filed a retrial petition with the Supreme People’s Court. The Supreme People’s Court found during the retrial proceedings that Fast Retailing Company had filed a petition with the Trademark Review and Adjudication Board for invalidation of the disputed trademark. After the trademark invalidation proceedings and the following trial and appellate administrative actions, the disputed trademark was finally declared invalid, based on which the Supreme People’s Court revoked the trial and appellate judgments and dismissed all of the claims of Zhinanzhen Company and Zhongwei Company.

 

[Typical Significance]

 “Application, registration and use of trademarks must abide by the principle of good faith.”


In response to the current situation that some business operators violate the principle of good faith and register a massive number of trademarks that are similar to other parties’ well-known trademarks, and thereafter out of conspiracy initiate judicial proceedings against the targeted owners for unjustifiable interests, the Supreme People’s Court points out in its judgment that whereas (i) Zhinanzhen Company and Zhongwei Company clearly targeted at companies such as UNIQLO and intended to assign the relevant trademarks at high prices after they acquired the trademark rights through improper means; (ii) failing to assign the trademark, they initiated a series of trademark infringement actions against UNIQLO Company or Fast Retailing Company and the different direct-sale stores based on almost identical facts, holding said company and store as joint defendants; and (iii) they took advantage of the large number of UNIQLO direct-sale stores and initiated a considerable number of legal actions nationwide, pleading the courts to order that UNIQLO Company or Fast Retailing Company and their direct-sale stores cease the infringement and pay damages, Zhinanzhen Company and Zhongwei Company had obvious bad faith and definitely violated the principle of good faith. Consequently, the law would not justify and protect their claim for unjustifiable interests, which claim inappropriately used judicial resources.


The Supreme People’s Court explicitly expresses that acquiring trademark rights out of bad faith and utilizing the trademark rights to claim unjustifiable interests would not be protected by the law. This case incorporates typical significance in terms of building a well-ordered environment for trademarks, purifying the market situation and curbing bad-faith litigation based on trademark rights acquired through improper means.

 

Partial text source: WeChat public account of Supreme People’s Court


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