The Principle for Resolving Conflict of Rights: Attach Equal Importance to Protection of Prior Rights and Coexistence of Rights
——Beijing Quna Information Technology Co., Ltd. v. Guangzhou Quna Information Technology Co., Ltd.
[Syllabus]
A conflict of rights is substantially that of interests. The process to redefine and clarify the boundary of rights represents that to measure and trade-off conflicting interests, and reflects the value orientation of judgment.
[Case No.] Guangdong High People's Court (2013) YGFMSZZ No.565
[Cause of Action] A dispute over unfair competition
[Collegial Panel Members] Yue Lihao Yu Jie Shi Jinghan
[Keywords] Unfair competition, specific name of famous service, domain name
[Relevant Legal Provisions] Article 4 of the Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Civil Dispute Cases Regarding Computer Network Domain Names
[Basic Facts]
On May 9th, 2005, Zhuang Chenchao registered the domain name “qunar.com” and established the “qunar” website. After Beijing Quna Information Technology Co., Ltd. (hereinafter referred to as “Beijing Quna Company”) was incorporated and registered on March 17th, 2006, the domain name “qunar.com” was transferred by Zhuang Chenchao (legal representative of Beijing Quna Company) to Beijing Quna Company. After years of use, the service logos such as “去哪儿”, “去哪儿网” and “qunar.com” became specific names of famous service.
Guangzhou Quna Information Technology Co., Ltd. (hereinafter referred to as “Guangzhou Quna Company”) was formerly known as Guangzhou Longyou Xianzong Travel Agency Co., Ltd., founded on December 10th, 2003, and covering a scope of business similar to that of Beijing Quna Company. On June 6th, 2003, the domain name “quna.com” was registered. After several transfers, it was acquired by Yuan Jingen (the legal representative of Guangzhou Quna Company) on May 9th, 2009. On May 26th, 2009, Guangzhou Quna Company got its present name after approved renaming, and the domain name “quna.com” was transferred to this company soon afterwards. Guangzhou Quna Company subsequently registered domain names “123quna.com” and “mquna.com”, and used “去哪”, “去哪儿”, “去哪网” and “quna.com” in its external publicity materials and operations.
On April 25, 2011, Beijing Quna Company filed a lawsuit in the court of first instance against Guangzhou Quna Company, alleging that its use of “去哪”, “去哪儿”, “去哪网” and “quna.com” in its external publicity materials and operations constituted unfair competition, and requested the court to rule that Guangzhou Quna Company immediately cease the unfair competition and pay a damage of RMB 3 million for the economic losses.
Holding
Guangzhou Intermediate People’s Court rendered a civil judgment (2011) SZFMSCZ No.217 on June 9th, 2013, holding that: Both Beijing Quna Company and Guangzhou Quna Company provided online travel service, and there existed competition between them. The commercial marks “去哪儿”, “去哪儿网” and “qunar.com” used by Beijing Quna Company were specific names of famous service. Guangzhou Quna Company’s use of the commercial marks “去哪”, “去哪儿”, “去哪网” and “quna.com” constituted an infringement of the specific names of the famous service of Beijing Quna Company, and Guangzhou Quna Company’s use of the word “quna” in its company name constituted unfair competition. Guangzhou Quna Company’s use of the domain names “quna.com”, “123quna.com” and “mquna.com” constituted an infringement of the interests in the domain name of Beijing Quna Company. Thus, the court of first instance ruled: 1) Guangzhou Quna Company stop using “quna” as its company name; 2) Guangzhou Quna Company stop using “去哪”, “去哪儿”, “去哪网” and “quna.com” as its service marks; 3) Guangzhou Quna Company stop using the domain names “quna.com”, “123quna.com” and “mquna.com”, and transfer these domain names to Beijing Quna Company within the stipulated time limit; 4) Guangzhou Quna Company pay RMB350,000 to Beijing Quna Company to compensate its economic losses; and 5) All other claims of Beijing Quna Company be rejected.
Unsatisfied with the judgment of first instance, Guangzhou Quna Company appealed to High People’s Court of Guangdong Province, arguing that its domain name “quna.com” was legitimately registered on June 6th, 2003, and was thus a prior right. Furthermore, it had no malicious intent in acquiring the domain name “quna.com” and subsequently registering the domain names “123quna.com” and “mquna.com”.
The court of second instance delivered a judgment on March 19th, 2014, holding that: “去哪儿”, “去哪儿网” and “qunar.com” used by Beijing Quna Company constituted specific names of famous service; Guangzhou Quna Company’s use of the word “quna” as its company name constituted unfair competition. However, the use of domain names “quna.com”, “123quna.com” and “mquna.com” by Guangzhou Quna Company was the exercise of prior rights, which had a legal basis. Therefore, the court of second instance upheld the decision of the court of first instance that Guangzhou Quna Company stop using “quna|” in its company name and using marks like “去哪”; set aside the first-instance decision that Guangzhou Quna Company stop using the domain names “quna.com”, “123quna.com” and “mquna.com” and transfer these domain names to Beijing Quna Company within the stipulated time limit; and reduced the amount of compensation to RMB250,000 accordingly.
[Reasoning]
The court of second instance believed it correct for the court of first instance to find as unfair competition Guangzhou Quna Company’s use of the word “quna” in its company name and use of marks such as “去哪”. The dispute of second instance focused on whether the use of domain names “quna.com”, “123quna.com” and “mquna.com” by Guangzhou Quna Company had legal basis. According to Article 4 of the Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Civil Dispute Cases Regarding Computer Network Domain Names, “in the trial of domain name dispute cases, the people’s court shall find the respondent’s registration and use of a domain name to be an infringement or unfair competition when the following conditions are satisfied: 1) the civil rights and interests claimed by the plaintiff for protection are legitimate and valid; 2) the defendant’s domain name or its main part constitutes the reproduction, imitation, translation or transliteration of the plaintiff’s well-known trademark, or is same as or similar to the plaintiff’s registered trademark and domain name, etc., enough to cause confusion among the relevant public; 3) the defendant has neither rights and interests in the domain name or its main part, nor just cause to register or use such domain name; 4) the defendant registers or uses the domain name with a malicious intent.” Therefore, the key to determining whether Guangzhou Quna Company conducted unfair competition was whether its use of the domain names satisfied all of the four elements above.
Firstly, on the use of the domain name “quna.com”, the court of second instance opined that Guangzhou Quna Company enjoyed legitimate rights and interests in the domain name “quna.com”, and had just cause to use it; failing this third requirement, Guangzhou Quna Company’s action did not constitute unfair competition. The reason is as follows: 1) On June 6th, 2003, the domain name “quna.com” was registered for the first time, but it was not until May 9th, 2005, about 2 years after such initial registration of “quna.com”, that the domain name “qunar.com” was registered and website created. Therefore, the registration of “quna.com” was legitimate. After several transfers, the domain name “quna.com” was acquired by Yuan Jingen (legal representative of Guangzhou Quna Company) on May 9th, 2009, and later by Guangzhou Quna Company on July 3rd, 2009. Such transfers did not break the law, either. The law shall not interfere with Guangzhou Quna Company’s use of its legally acquired domain name “quna.com”. 2) On August 27th, 2010, Beijing Quna Company submitted a complaint letter against the domain name “quna.com” of Guangzhou Quna Company to the Beijing Secretariat of the Asian Domain Name Dispute Resolution Center, requesting that this domain name be transferred to Beijing Quna Company. According to the expert group, the complainant could not satisfy the three conditions stipulated in Uniform Domain Name Dispute Resolution Policy, hence, there was no reason to grant its request to “order the respondent to transfer the disputed domain name to the complainant”. This further proved that Guangzhou Quna Company had just cause to use the domain name “quna.com”; 3) As domain names were limited in length and quantity, similar domain names are registerable. The only difference between Beijing Quna Company’s domain name “qunar.com” and Guangzhou Quna Company’s domain name “quna.com” was the dropped letter “r”. Although the two domain names are similar, the two parties are obliged to tolerate the possible confusion between these two domain names in their use. It is illogical to deduce Guangzhou Quna Company’s malice in using the domain name “quna.com” from the confusion resulting from the use of these two domain names, and proceed to presume that Guangzhou Quna Company had no just cause to acquire the domain name “quna.com”, and therefore conducted unfair competition.
Secondly, on the use of the domain names “123quna.com” and “mquna.com”. The domain names “123quna.com” and “mquna.com” are more similar to the domain name “quna.com” used by Guangzhou Quna Company than Beijing Quna Company’s domain name “qunar.com”. As Guangzhou Quna Company had just cause to use the domain name “quna.com”, the domain names “123quna.com” and “mquna.com” registered afterwards shall also be allowed to be registered and used. In conclusion, there were valid reasons for Guangzhou Quna Company to argue that it had a legal basis to use the domain names “quna.com”, “123quna.com” and “mquna.com”. The court of second instance supported its appeal according to law.
As also noted by the court of second instance, both parties in this case enjoyed the rights and interests in domain names with legitimate sources, therefore shall tolerate, respect and co-exist in long term with each other. Neither may one party deprive the other of its living space because the former’s popularity increased in operation; nor may the other party maliciously exploit the higher goodwill of the more famous party for improper business benefits. Therefore, Guangzhou Quna Company shall have the right to continuously use the domain names “quna.com”, “123quna.com” and “mquna.com”, but be obligated to add corresponding distinguishing marks on the domain name-related search links and websites so that consumers could distinguish the abovementioned domain names from “去哪儿”, “去哪儿网” and “qunar.com”, which are specific names of Beijing Quna Company’s famous service.
