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11 Oct 2016

Big win for foreign brand owner against cybersquatters in recent Chinese IP Court judgment

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Chinese version

The Beijing Intellectual Property Court recently handed down a decision in favour of the famous American department store, Macy’s West Stores, in an unfair competition claim brought by Macy’s West Stores against a local PRC company, Beijing Guowang Information.  Guowang registered two domain names, macys.com.cn and macys.cn.  Guowang was ordered by Beijing IP Court to pay damages and transfer the domain names to Macy’s.

Macy’s also claimed for trademark infringement against Guowang but was unsuccessful as Guowang never used the Infringing Domain Names to operate any business.

Generally, foreign brand owners have experienced costly frustrations with the China’s “first to file” trademark system, more notably in the cases of New Balance (Zhou Le Lun v New Balance Trading (China) Limited & Others) and Michael Jordan (Michael Jordan v Qiaodan (China) Limited).  The Macy’s decision followed the Dayuecheng case where the same IP Court ruled in favour of the brand owner of Dayuecheng “大悦城” (known as the famous chain department stores and mixed-use property development in China), overturning the Beijing Eastern District People’s Court’s decision.   The IP Court held that the defendant in that case, which is an online shopping mall’s operator, had violated the principle of honesty and good faith and engaged in unfair competition conduct by using the “大悦城” mark (Dayuecheng) in search results for rank bidding. The more recent Macy’s decision is another reassuring and encouraging sign that Chinese Courts may be now more prepared to take a vigilant stance against bad faith squatters, especially in unfair competition actions, for the reasons below.

First, “malice” in registering and using domain names is a required element for establishing unfair competition conduct under Article 4 of the Interpretation of the Supreme People’s Court on Application of Laws in the Trial of Civil Disputes Over Domain Names of Computer Network.  The IP Court found that Guowang’s act of registering domain names containing others’ famous marks without actually using them was malicious.  The Court came to this finding having considered the fact that Guowang had registered a significant number of domain names containing the names of other famous brands.  While “malice” is also a relevant factor for dealing with trademark squatters under the PRC Trademark Law, it seems that the bar is lower in the unfair competition context.

Second, the extent of foreign brands’ “reputation” in China is an important factor to inferring “malice” on the part of the squatter.  The fact that the IP Court recognised the reputation of “Macy’s” as a trade name and trade mark in mainland China notwithstanding the fact that Macy’s, like many foreign brands, has not officially entered into the China market, is encouraging.  Macy’s has neither operated any department stores in China, nor did it have any other business operations in the country until last year.  Despite this, the Court readily accepted evidence adduced by Macy’s in relation to its reputation worldwide as well as evidence of its reputation in China which is primarily based on Chinese press coverage.  The judicial recognition of the reputation of “Macy’s” in the context of unfair competition is reassuring, given that in trademark proceedings, it will be very difficult if not impossible for Macy’s to establish the well-known status due to the high standard of proof. Thus, unfair competition is as a welcome alternative or concurrent means of brand protection in China.

Finally, like the Dayucheng case, the decision is yet another instance in which Article 2 of the PRC Anti-Unfair Competition Law oupled with the said Interpretations was relied upon by the brand owner to establish that the act of squatting was in breach of “principle of honesty and good faith”.  This fortifies the understanding that the hurdle in establishing such breach under Anti-Unfair Competition Law may be lower than that under the PRC Trademark Law.

The recent approach of the IP Court should, therefore, instill some confidence in foreign brand owners in their fight against domain name squatters, although dealing with trademark squatters is still likely to be more of a challenge.

 

 

English version

外国品牌所有者于近日在中国知识产权法院对域名抢注者取得重大胜利

最近,知名美国百货公司梅西百货在对一家中国公司北京国网信息有限责任公司的反不正当竞争的诉讼中取得胜诉。国网早前注册了两个包含梅西商号的域名,macys.com.cn 及macys.cn 。 北京知识产权法院判令国网对梅西百货公司作出赔偿,并将该诉争域名转移给梅西。

梅西对国网的申索亦包括商标侵权,但是,由于国网不曾使用侵权域名展开任何经营活动, 梅西的这部分申索并没有成功。

对于外国品牌所有者来说,中国商标注册的先申请原则对其在中国市场的拓展和经营带来巨大的挫折,有时甚至需要付出昂贵的代价 (参见周乐伦诉新百伦贸易(中国)有限公司一案,及迈克尔·乔丹诉乔丹体育一案)。  今年,北京知识产权法院在梅西案之前,也曾推翻北京东城区人民法院的一份判决,判令一家网上销售平台的经营者在竞价排名中使用“大悦城”商标的行为违反了诚实信用原则,从而构成对“大悦城”的商标所有者中粮集团的不正当竞争。  考虑到以下几种因素,我们或许可以认为该法院近期在梅西案中的判决对品牌所有者来说是个鼓舞的消息: 中国的法院或许愿意对恶意抢注者采取更警惕的态度,尤其在反不正当竞争的诉讼。

首先,根据最高人民法院关于审理涉及计算机网络域名民事纠纷案件适用法律若干问题的解释第四条,证明域名注册构成反不正当竞争需要证明对方之
恶意。 在本案中,知识产权法院判定,国网申请注册包含其他人注册商标的域名却从未使用的行为具有恶意。 法院在该判定中亦考虑到国网注册了许多其他包含知名品牌商标的域名的情形。 纵然 “恶意”在域名和商标抢注问题中均为相关因素,需要证明商标抢注者的恶意的标准似乎更高。

第二,由于国外品牌在中国大陆的声誉乃推论抢注者的恶意的重要论据,我们非常乐于见到知识产权法院在本案中认可了Macy’s作为商标及商号在中国大陆的声誉,尽管 梅西百货与许多知名外国品牌一样,还未曾正式进入中国市场。  梅西百货在中国大陆并没有开设任何实体百货公司,或有任何其他经营业务。  法院接受了梅西百货所提交有关其在全世界范围的声誉的证据以及基于中文报纸杂志报道的其在中国的声誉的证据。  由于在中国驰名商标的举证要求通常十分严苛,要证明Macy’s在中国是一个驰名商标是相当困难的。 因此,在这种情况下,Macy’s的商号声誉在不正当竞争的诉讼中得到司法认可无疑是倍受欢迎的,这使得其得以用不正当竞争诉讼进行其在中国的品牌保护工作。

最后,与大悦城一案一样,品牌所有者在此案中同样成功援引了中国反不正当竞争法的第二条及上述最高人民法院的解释来证明抢注者违反了反不正当竞争法所要求的诚实信用原则。 这说明相对于商标法中的诚实信用原则,品牌所有者在不正当竞争诉讼中证明抢注者违反诚实信用原则可能较为容易。

尽管品牌所有者在对抗商标抢注者时还是要面对重大挑战, 知识产权法院最近的处方式应当给外国品牌所有者带来了对抗域名抢注者的信心。

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