“吉尼斯” TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION

China IP,[Trademark]

CASE 8 :
“吉尼斯” TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION
◆ First Instance: (2015) FoZhongFaZhiMinChuZi No. 8
◆ Second Instance: (2017) YueMinZhong 2347
Guangdong Province
 
[Headnotes]
Where the accused infringer’s use of a mark is a descriptive or nominative fair use, it shall not be trademark infringement prohibited by China's trademark law. Nominative fair use shall show the the accused infringer’s good faith and not exceed reasonable limits. Descriptive fair use shall be premised on the fact that the mark is used in accord with its descriptive meaning which may be judged in terms of the plain and ordinary meaning, the usage included in authority documents or the usage established by the relevant public, etc.
 
The application of punitive damages is not limited to repeated acts which have been determined as trademark infringement by judicial or administrative procedures. It shall be willful infringement that the accused infringer fails to fulfill reasonable duty of care and commits the act of infringement after receiving the trademark owner’s cease and desist letter, notice, etc. In case of serious circumstance, punitive damages may be applied.
 
[Synopsis]
Plaintiff of first instance: Guinness World Records Limited (hereinafter referred to as “Guinness”)
 
Defendant of first instance: Chery Automobile Co., Ltd. (hereinafter referred to as “Chery”), Anhui Chery Automobile Sales Co., Ltd. (hereinafter referred to as “Chery Sales”)
 
Guinness is the owner of registered trademarks “GUINNESS WORLD RECORDS”, “ 吉尼斯世界纪录” and “ 吉尼斯”, and the approved services for use include “organizing performance”, “organizing business trade show”, etc. Guinness filed a case before the Court and stated that Chery and Chery Sales used the marks involved in the case in a prominent way and conducted false propaganda during the “China Tour of CheryArrizo 7 Challenge the Peak”, which constituted trademark infringement and unfair competition.
 
The Court held that the use of marks “ 挑战吉尼斯” and “GUINNESS 我是吉尼斯” was trademark use instead of nominative or descriptive use. It constituted trademark infringement that Chery and Chery Sales used the marks involved in the case similar with Guinness’s trademarks on same services and likely caused confusions and mistakes among the public, and unfair competition that Chery and Chery Sales used one-sided slogans and likely caused misunderstanding over “members’ good driving skills” as “autos’ high quality” among the public. After receiving Guinness’s cease and desist letter, Chery and Chery Sales failed to fulfill their reasonable duty of care and continued to use in large quantities, which was subjective act of bad faith. Therefore, punitive damages were applied and the Court awarded 2.12 million Yuan in compensatory and punitive damages.
 
[Judge's Comment]
This case involves the legal limits of wellknown automobile companies’ commercial publicity practices and attracts the automobile industry’s extensive attention. Trademark infringement is premised on that the mark involved in the case is used as trademark, but how to distinguish the trademark use from the nominative or descriptive fair use is the difficulty in trial practices.
 
By elaborating on the constitutive elements of trademark use, the judge deeply analyzes the difference between the non-trademark fair use and the freeriding trademark use, analyzes the nature of trademark infringement, and clarifies the boundary between the legal use and the illegal use.
 
Moreover, punitive damages and application conditions thereof are explored helpfully in this case. This case shows that Guangdong courts have equally protected the legitimate rights and interests of foreignfunded enterprises, imposed severe punishment on IPR infringements, and provided a strong judicial guarantee for creating a world-class business environment.

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