General Trademark Infringement
General trademark infringement refers to the act of using a trademark identical or similar to a registered trademark on the same or similar goods without the permission of the trademark owner, or engaging in other acts that interfere with or obstruct the trademark owner's use of their registered trademark, thereby infringing upon the legitimate rights and interests of the trademark owner.
Reverse Passing-Off
However, there is also a less common type of special trademark infringement: reverse passing-off.
What is Reverse Passing-Off?
Reverse passing-off is different from traditional trademark infringement in many ways. It refers to the act of removing someone else's trademark and replacing it with one's own trademark, rather than using an identical or similar trademark on the same or similar goods.
Case of Reverse Passing-Off
The Xinwu District People's Court of Wuxi City, Jiangsu Province, once adjudicated a case of unfair competition involving reverse passing-off. The court ordered the infringing company to immediately cease the infringing acts, issue an apology, and compensate the plaintiff company for economic losses and reasonable expenses totaling over 1.9 million yuan.
The Plaintiff: Shuangxiang Company
The plaintiff, Shuangxiang Company, is a well-known rubber and plastic machinery manufacturing enterprise in Wuxi. It was established in December 2001 and holds multiple invention patents in the field of rubber and plastic machinery and related devices. The "Shuangxiang" trademark has been recognized as a "Famous Trademark of Jiangsu Province."
The Defendant: Tengyu Company
The defendant, Tengyu Company, was registered on May 19, 2016. Its main business scope includes environmental protection machinery and rubber and plastic machinery, with overlaps in business and customers with Shuangxiang Company.
Discovery of Infringement
In 2021, Shuangxiang Company discovered that Tengyu Company had extensively used photos of Shuangxiang's factory, products, and production equipment on its website and falsely claimed honors it had allegedly received in its external promotions.
Investigation and Findings
It was found after investigation that the legal representative of Tengyu Company, Mr. Cao, had previously been an employee of Shuangxiang Company. The products displayed by Tengyu Company were actually purchased from Shuangxiang Company and then secretly relabeled with the nameplate of Wuxi Tengyu Environmental Protection Technology Co., Ltd.
Initial Actions Taken by Shuangxiang Company
Shuangxiang Company first filed a complaint with the Wuxi Market Supervision and Administration Bureau on the grounds of false advertising. Tengyu Company was subsequently found guilty of false advertising and fined 300,000 yuan.
Subsequent Legal Action
Shuangxiang Company then filed a lawsuit against Tengyu Company in the Xinwu District Court, claiming over 1.9 million yuan in compensation for unfair competition.
Defendant's Arguments
During the court proceedings, Tengyu Company argued the following points:
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Shuangxiang Company had not provided evidence of any losses incurred, and Tengyu Company had not gained any benefits.
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Some management personnel of Tengyu Company had previously worked for Shuangxiang Company. An employee, Mr. Cui, had posted photos and videos of Shuangxiang Company on his personal Douyin account, which Tengyu Company claimed was an individual act unrelated to the company.
Court's Judgment
After reviewing the case, the Xinwu District Court held the following views:
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The equipment with the replaced nameplates was manufactured by Shuangxiang Company. Given the high technical requirements for such equipment, not all companies are capable of producing it. When customers saw the equipment, they would naturally associate Tengyu Company's technical capabilities with those of Shuangxiang Company, leading to confusion. This should be recognized as a deliberate act of confusion.
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The legal representative and sales personnel of Tengyu Company had previously worked for Shuangxiang Company. Knowing that the infringing text, photos, and equipment were related to Shuangxiang Company, they still engaged in confusing behavior, indicating significant subjective fault.
Final Decision
Based on the above findings, the court ordered Tengyu Company to immediately cease the infringing acts, issue an apology, and compensate the plaintiff company for economic losses and reasonable expenses totaling over 1.9 million yuan.
Appeal and Final Ruling
Tengyu Company appealed the decision to the Intermediate People's Court of Wuxi City, Jiangsu Province, but the appeal was rejected, and the original judgment was upheld.
Summary:
Regarding the nature of trademark infringement:
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From the perspective of trademark rights, it is a serious act of trademark infringement.
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From the perspective of consumer rights, it is an act of consumer fraud.
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From the perspective of market competition, it constitutes an act of unfair competition.
Legislation on Reverse Passing-Off:
Legislation regarding reverse passing-off varies globally but generally falls into two patterns:
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One is to treat the act as trademark infringement and prohibit it through trademark law.
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The other is not to focus on the infringement of trademark rights, but to address reverse passing-off from the perspective of unfair competition, incorporating it into unfair competition law.
Additionally, the Convention Establishing the World Intellectual Property Organization (WIPO) also prohibits reverse passing-off as an act of unfair competition.
