Judicial Protection Standard for Product Name Constitute of Unregistered Well-Known Trademark
——Commercial Press Co., Ltd v. Sinolingua Co., Ltd.
[Syllabus]
In the network environment, if the alleged infringement act is not prohibited in time, it will cause the respondent to improperly use the rights of others to gain further market share, which may cause economic losses to the petitioner, and such damage will be difficult to make up. Therefore, the respondent's alleged infringement act should be prohibited, and under such a circumstance, a pre-litigation injunction should be granted.
[Case No.] Beijing Intellectual Property Court (2016) J 73 MC No. 277
[Cause of Action] Disputes over infringement on trademarks and unfair competition
[Collegial Panel Members] Zhang Lingling Feng Gang Yang Jie
[Keywords] Trademark, unregistered well-known trademark, unfair competition, knowledge spreading
[Relevant Legal Provisions] Article 15 of the Tort Law of the People's Republic of China, Articles 13 and 14 of the Trademark Law of the People's Republic of China, Article 5 (2) and Article 20 (1) of the Law of the People's Republic of China on Anti-Unfair Competition
[Basic Facts]
Both the Plaintiff the Commercial Press Co., Ltd. (hereinafter referred to as Commercial Press) and the Defendant Sinolingua Co., Ltd. (hereinafter referred to as Sinolingua) are the publishing agency. The Plaintiff the Commercial Press has continuously published the popular version of Xinhua Dictionary to 11th edition since 1957, and in 2010-2015, the average market share of Xinhua Dictionary published by Commercial Press in the dictionary market exceeded 50%, and as of 2016, the global distribution volume for Xinhua Dictionary published by the Commercial Press exceeded 567 million, for which it has been listed in the Guinness World Records “the Most Popular Dictionary” and the Guinness World Records “the Bestselling Book (as revised on a regular basis)” and many other honors.
The Plaintiff the Commercial Press alleged that the acts of the Defendant Sinolingua, i.e. producing and selling the “Xinhua Dictionary”, infringed the unregistered well-known trademark “Xinhua Dictionary” of the Plaintiff, and the Defendant Sinolingua applying the special package of the famous product Xinhua Dictionary (11th Edition) of Commercial Press constituted unfair competition. The Court is requested to render the following judgements: the Defendant should immediately stop the infringement of trademark rights and the acts of unfair competition; the Defendant should post statements in the relevant media including China Press and Publication TV Broadcast Newspaper to eliminate the effects arising from the infringement; the Defendant should pay the Plaintiff damages for economic losses in the amount of RMB 3 million and for reasonable costs and expenses in RMB 400,000.
The Defendant Sinolingua argued that “Xinhua Dictionary” was developed from the national project name to the common name of dictionary in the public domain and the Plaintiff had no right to assert the interests of trademark in relation to “Xinhua Dictionary” and to prohibit others from properly using it. The decoration of involved Xinhua Dictionary (11th Edition) did not belong to the “special package” as specified in Article 5 (2) of the Anti-unfair Competition Law of the People's Republic of China and would not cause confusion or misunderstanding of the buyers. The Plaintiff filing a lawsuit aimed to monopolize the common name of dictionary (i.e. “Xinhua Dictionary”) by way of judicial judgment, which had the improper purpose of eliminating competition and achieving monopoly on the dictionary market.
Beijing Intellectual Property Court believes that “Xinhua Dictionary” has the distinctive features of a trademark and upon the use of the Plaintiff the Commercial Press, it has become a well-known trademark and constitutes an unregistered well-known trademark. The Defendant Sinolingua’s replication and imitation of the Plaintiff’s unregistered well-known trademark “Xinhua Dictionary” has infringed on the trademark. Xinhua Dictionary (11th Edition) published by the Plaintiff the Commercial Press falls into the special package and decoration of famous products, and the Defendant Sinolingua’s use of the special decoration of famous product Xinhua Dictionary (11th Edition) without consent constitutes unfair competition. The Court of first instance ruled as follows: the Defendant Sinolingua should immediately cease the infringement of the trademark at issue and the unfair competition conduct; the Defendant should post statements in the relevant media including China Press and Publication TV Broadcast Newspaper to eliminate the effects arising from the infringement; it shall compensate the Plaintiff the Commercial Press for economic losses of RMB 3 million and for reasonable costs and expenses of more than RMB 270,000.
After the judgment of the trial court was rendered, the Parties involved reached a settlement on the execution of the judgement and the judgment in the first instance went into effect.
Holding
Beijing Intellectual Property Court made the following judgment ((2016) J73 MC No.277) on December 28, 2017: the Defendant Sinolingua was ordered to immediately cease to use the unregistered well-known trademark “Xinhua Dictionary” of the Plaintiff the Commercial Press and immediately cease the unfair competition of using the same or similar decoration as or to the special decoration of famous product Xinhua Dictionary (11th Edition) of the Plaintiff the Commercial Press; the Defendant shall post statements in the relevant media and assume the liability for compensating the economic loss of RMB 3 million (RMB THREE MILLION ONLY) and reasonable costs and expenses of RMB 277,989.2 (RMB TWO HUNDRED SEVENTY SEVEN THOUSAND NINE HUNDRED EIGHTY NINE POINT TWO ONLY).
[Reasoning]
The judgment of Beijing Intellectual Property Court believes that the issue of the Case focuses on the following two points: first, whether the involved “Xinhua Dictionary” constitutes an unregistered well-known trademark, and if so, whether the alleged conduct of Sinolingua constitutes an infringement; second, whether Xinhua Dictionary (11th Edition) published by the Commercial Press constitutes special package and decoration of a famous product, and if so, whether the alleged behavior of Sinolingua constitutes unfair competition; third, if the aforementioned infringements are confirmed, what legal liabilities should be borne by Sinolingua.
I. whether the involved “Xinhua Dictionary” constitutes the unregistered well-known trademark? If so, whether the alleged conduct of Sinolingua constitutes an infringement?
(I) The Court holds that the involved “Xinhua Dictionary” constitutes a registered well-known trademark.
Firstly, “Xinhua Dictionary” has the distinctive features of trademark. The distinctiveness is a basic feature of the trademark, and is a basic attribute that a mark can be considered as a trademark. The mark with distinctive features only can play a role that distinguishes the source of goods and then can be registered or protected as a trademark. In the Case, “Xinhua Dictionary” has formed stable cognitive connections in the relevant consumers, with specific historical origin, development process and long-term sole provider and objective market pattern, maintaining the mixed attributes of product and brand as the product name, and it has the meaning and role indicating the source of goods and the distinctive features of trademark. In this Case, pursuant to the trial standard as established in the prior cases ((2011) MTZ No.55 Civil Judgment and (2013) MSZ No.371 Civil Ruling), it is confirmed that “Xinhua Dictionary” has the distinctive features of trademark and can play a role in identifying the source of goods.
Secondly, “Xinhua Dictionary” constitutes the unregistered well-known trademark. Judging from the extent of knowledge the relevant public has on the “Xinhua Dictionary” at issue, “Xinhua Dictionary” has been widely known to the relevant public across the whole country. Based on the duration that the Commercial Press uses the name “Xinhua Dictionary” and the sales volume of the dictionary, hundreds of millions of "Xinhua Dictionary” copies have been sold across the whole country in the past 60 years, with very huge sales volume and extremely extensive sales range. Based on the duration, extent and geographical range that the Commercial Press publicizes "Xinhua Dictionary", it has obtained great influence and high popularity. Taking the above facts into consideration, “Xinhua Dictionary” can be confirmed as constituting an unregistered well-known trademark.
Lastly, the Commercial Press can assert the unregistered well-known trademark with respect to the name of “Xinhua Dictionary”. As of the time when the alleged acts took place, the mark “Xinhua Dictionary” has not been granted for trademark registration, but “Xinhua Dictionary” has reached the extent of well-known trademark upon use of the Commercial Press, which should be protected by the Trademark Law of the People's Republic of China. The protection should be made to “Xinhua Dictionary” as the unregistered well-known trademark of the Commercial Press, which not only protects the role of identifying the source and the goodwill as a result of Commercial Press’s operation of the “Xinhua Dictionary” but also makes it assume the legal obligation and social liability for product quality assurance by way of trademark protection. This will not jeopardize the spreading of knowledge. Instead, in order to maintain the good brand reputation of “Xinhua Dictionary”, the Commercial Press will pay much more attention to promoting the quality for the dictionary published and issued by it with the mark of “Xinhua Dictionary” and facilitate the extensive spreading of correct knowledge.
(II) The Court holds that Sinolingua’s to replication and imitatation of the unregistered well-known trademark “Xinhua Dictionary” of the Commercial Press are prone to cause confusion, which constitutes trademark infringement.
The products on which the Commercial Press and Sinolingua use the name “Xinhua Dictionary” are dictionaries under Category 16, which are identical products. Sinolingua uses completely identical trademark as the unregistered well-known trademark “Xinhua Dictionary” of the Commercial Press in its published dictionary, which constitutes using the unregistered well-known trademark of the Commercial Press by way of replication. According to documented evidence, Sinolingua used the mark “Xinhua Dictionary” in its published dictionary products under Class 16, which has caused the consumers to confuse its published Xinhua Dictionary as the one published by the Commercial Press when they buy and use the dictionary. The abovementioned behavior of Sinolingua has caused relevant public confusion and misunderstanding. Therefore, the conduct that Sinolingua uses the mark of “Xinhua Dictionary” in the dictionary for Class 16 has constituted replicating others’ well-known trademark not registered in the same products in China, and would easily cause confusion. It is a breach of the provisions of Article 13 (2) of the Trademark Law of the People's Republic of China.
II. Whether Xinhua Dictionary (11th Edition) published by the Commercial Press constitutes the special package and decoration for famous product? If does so, whether the alleged behavior of Sinolingua constitutes the unfair competition?
(I) The Court holds that Xinhua Dictionary (11th Edition) published by the Commercial Press constitutes the special package and decoration for famous product.
Firstly, Xinhua Dictionary (11th Edition) published by the Commercial Press is a famous product. Xinhua Dictionary (11th Edition) has been largely published and issued across the whole country since it has been firstly published and issued in June 2011, up to the time that the alleged behaviors occur, which has obtained greater popularity. Based on the situation that the Commercial Press promotes and operates Xinhua Dictionary across the whole country, and a series of honors and important awards obtained by Xinhua Dictionary, the Xinhua Dictionary (11th Edition) published by the Commercial Press can be confirmed to be a famous product.
Secondly, the decoration of Xinhua Dictionary (11th Edition) belongs to the special decoration. The decoration used in the Xinhua Dictionary (11th Edition) is a unique arrangement and combination made to the elements unrelated to its functionalities, forming the overall image that can distinguish from other operators’ similar products. After long-term promotion and use by the Commercial Press, the abovementioned decoration can be associated with the source of goods of “Xinhua Dictionary” (11th Edition) by the relevant; the words, image, color and their arrangement and combination reflected in such decoration can play a role in identifying and distinguishing the source of goods, with the nature of specificity. Therefore, the decoration of “Xinhua Dictionary” (11th Edition) falls into the special decoration of famous products as protected in Article 5 (2) of the Anti-unfair Competition Law of the People's Republic of China.
(II) The Court believes the conduct that Sinolingua uses the special decoration of “Xinhua Dictionary” (11th Edition) without consent constitutes unfair competition.
The Commercial Press has provided the comparison pictures of the Plaintiff's and the Defendant’s products as follows:
As shown in the comparison pictures above, the alleged infringing products are published upon the issuance of Xinhua Dictionary (11th Edition) and they are similar to Xinhua Dictionary (11th Edition) in the aspects of their overall design in the dictionary cover, word design in the top part of cover, edition design of the middle part of the cover, graphic design of the bottom part of the cover, color and word design of the dictionary’s backbone. Thus, the decoration of the alleged infringing products of Sinolingua is similar to the one of Xinhua Dictionary (11th Edition) of the Commercial Press in the word structure, graphic design, color matching, arrangement position and other overall visual effects, and common consumers with general attention can easily be confused and mistaken about the source of the Plaintiff’s and the Defendant's products. And according to documented evidence, the alleged infringing products have caused the relevant consumers to be confused and mistaken in the market. Therefore, Sinolingua violates the unfair competition as specified in Article 5 (2) of the Anti-unfair Competition Law of the People's Republic of China by using the special decoration of famous product Xinhua Dictionary (11th Edition) without consent.
III. what legal liabilities shall be borne by Sinolingua?
The Court renders the following ruling: Sinolingua should immediately cease infringement and post statements to eliminate the effects; full support should be given to the claims of the Commercial Press for damages of RMB 3 million and it shall also be ordered to compensate RMB 277,989.2 for reasonable costs and expenses.
Firstly, in consideration of the above alleged infringements implemented by Sinolingua, it should immediately cease to use the unregistered well-known trademark “Xinhua Dictionary” of the Commercial Press, and it should be prohibited from using the same or similar trademark as or to “Xinhua Dictionary” in the dictionary products for Class 16. Meanwhile, it should also immediately cease to use the same or similar decoration as or to the special decoration of famous product Xinhua Dictionary (11th Edition) of the Commercial Press, and post statements to eliminate the negative effects of its infringement on the Commercial Press.
Secondly, by reference to the information statistical quantity of the dictionary printing power of attorney for partly alleged infringement as recorded by Beijing Municipal Bureau of Press, Publication, Radio, Film and Television, annual average return on net assets for publishing enterprises listed in the mainland in 2014, the sales status of Sinolingua across the whole country, taking the nature of alleged infringements of Sinolingua and subjective intention into the overall consideration, the Court determines the amount of damages of the Case as 1.5 times the amount that is determined according to the aforesaid methods, subject to Article 63 (1) of the Trademark Law of the People's Republic of China. The specific calculation is as follows: during the period from September 30, 2012 to September 30, 2016, Sinolingua made a profit by publishing the alleged infringing dictionary, i.e.: 20, 310,160* 11.29% = RMB 2,293,017.064. That amount by multiplying 1.5 times has exceeded the claims of the Commercial Press for compensation of RMB 3 million; thus, the Court makes fully support to the claims of the Commercial Press for compensation of RMB 3 million.
Lastly, the Commercial Press asserts the compensation of RMB 400,000 for reasonable costs and expenses, and provides the evidence proving the reasonable expenses for the purpose of partly protecting legal rights. Taking into consideration the relevance and necessity between the evidences of reasonable expense provided by the Commercial Press and the Case, the Court affirms the reasonable expenses of RMB 277,989.2 with evidences and the exceeded part is not be affirmed.
