Case No 5: Dispute on the exclusive right of registered trademark between Beijing Concert Hall and its former general manager

1. Background

Beijing Concert Hall has hosted a group of shows under the name “Da Kai Yin Yue Zhi Men” (“Open the Door of Music”) over the years. Qian Cheng, then general manager of the Beijing Concert Hall, registered the expression as a trademark and brought the hall to court for its use of the trademark in operations without his permission and infringement of his exclusive right of the registered trademark after he left that employment. He requested the hall to stop infringement, make an apology and provide compensation for economic losses and other cost totaling 40,000 yuan ($6,250).

2. Ruling

The Beijing Xicheng District People’s Court found that the Beijing Concert Hall had used a trademark which had gained a reputation and been similar to the registered trademark on the same kind of commodity prior to the trademark registrant and before the registration. The court also held that Qian Cheng, who enjoys the exclusive right to use the registered trademark, did not have the right to forbid the hall’s uses of the trademark within its previous scope of activities. It did not support Qian’s argument that the Hall had no factual and legal basis to plead against him in court. In the result, it dismissed Qian’s claims.

Qian refused to accept the decision and instituted an appeal to the Beijing IP Court. The appeal court ruled that the trademark “Da Kai Yin Yue Zhi Men” had been used in shows and promotions and was part of all the activities at the concert hall; a fixed relationship had been established between the trademark and Beijing Concert Hall, which granted the right of pleading to the hall for its prior use of the trademark and established that the hall’s use could not be considered an infringement of Qian’s registration. The Beijing IP Court thus rejected the appeal and upheld the original decision.

3. Significance

This case involves the right of pleading based on prior use in the revised Trademark Law. The Beijing IP Court analyzed the law and discussed the use of trademark, reputation of the mark, and the subjective attitude of the user. The judgment safeguarded the brand of “Da Kai Yin Yue Zhi Men”, which had been used continuously by Beijing Concert Hall for nearly 12 years, and balanced the interests of both the prior user of the trademark and the registered trademark holder.

Case No 6: Unfair competition dispute between Beijing iQiYi Technology Co, Ltd and Beijing Jike Jike Technology Co Ltd

1. Background

Jike Jike is the manufacturer and seller of the “hiwifi” router, which can screen out advertisements on online video site iQiyi.com after the router users download a plug-in module from the “hiwifi” cloud computing platform. The iQiYi company thought that Jike Jike’ s module is unfair competition, and requested the court to order the company to stop its use, eliminate the negative effects and pay more than 2.10 million yuan ($312,500) as compensation.

2. Ruling

The court of first instance, the Beijing Haidian District People’s Court, found that Jike Jike’s plug-in module directly intervened in iQiYi’s operation for commercial profit which behavior was beyond the reasonable limits of competition, violated the principles of integrity and business ethics, and constituted unfair competition. Jike Jike refused to accept the judgment and appealed to the Beijing IP Court.

The IP Court held that every business operator should obey rules and not affect other competitors’ legitimate business models for its own interest. It ruled that Jike Jike’s plug-in module changed iQiYi’s business model forcibly in providing services to its “hiwifi” users, thus damaging the legitimate interests of iQiYi.

The court also found that Jike Jike’s behavior made iQiYi fail to sustain normal operations due to lack of advertising income to pay the high royalty fees of video programs. Consequently, the interests of Internet users will eventually be adversely affected.

After identifying the unfair competition behavior of Jike Jike, the Beijing IP Court dismissed the appeal and upheld the original judgment.

3. Significance

In the Internet era competition has become increasingly fierce and more and more forms of unfair competition have emerged. They are not always easy to identify. The courts made the judgment though analyzing Jike Jike’s subjective malice, the harm to another’s business model and the eventual influence on consumers. The case provides guidance in determining competition relationship and the legitimacy of competition against the background of the Internet environment.