Judicial practice has shown that even if the rights holder holds a trademark registered outside the territory, if they use it as a basis to carry out actions that harm the legitimate rights and interests of domestic operators, they will still be subject to the regulation of China's Anti Unfair Competition Law.
The Shanghai Intellectual Property Court recently concluded a typical case, a dispute over unfair competition between a certain technology limited company and Jiang and his wholly-owned Hong Kong company. Through a thorough analysis of the purpose of the behavior and the consequences of the damage, this case clearly outlines the judicial path for cross-border intellectual property protection and has important reference value for similar cases.
Disputes arising from trademark use
The plaintiff's company has been mainly engaged in protective mask products since its establishment in August 2016, and has continuously used the "graphic+DOC" logo on dust masks. After years of promotion and sales, the logo has gained a certain level of popularity in related fields and established stable connections with its own company.
The Hong Kong company wholly controlled by the defendant Jiang was established in November 2018. From 2020 to 2021, Jiang had engaged in mask transactions with the plaintiff company and facilitated its commercial cooperation.
In December 2020, the defendant company applied to register the trademark "DOC+Care" with the European Intellectual Property Office, and was approved for use in Class 10 medical protective masks and other products in April of the following year.
Since May 2021, Jiang and the defendant company have claimed infringement of the "DOC+Care" trademark by claiming that the plaintiff company has not registered the trademark in question or is still using the "+DOC" logo in the European Union. They have taken multiple actions, including sending a lawyer's letter to the plaintiff company, filing a complaint on Alibaba International, writing to its German distributor, and reporting to the market supervision department.
The plaintiff company believes that the other party, knowing that its trademark was used first, initiated a rights dispute based on the registered EU trademark, seriously disrupting its normal operation, causing economic losses, and suspected of constituting unfair competition. Therefore, it filed a lawsuit with the Hongkou District People's Court in Shanghai.
Jiang and the defendant company admitted to carrying out the accused actions, but argued that they acted based on legally obtained EU trademark rights and did not constitute unfair competition.
Court trial: Penetrating appearances to determine nature
The Hongkou Court held in the first instance that sending a lawyer's letter and reporting to regulatory authorities (not filed) did not directly cause damage to the plaintiff's company's sales channels and export interests; However, the act of complaining to Alibaba International and sending letters to German distributors violates the principles of good faith and business ethics, and has indeed caused harm and constituted unfair competition. The two defendants are ordered to compensate 500000 yuan.
Jiang and the defendant company are dissatisfied and appealed to the Shanghai Intellectual Property Court. The court recently made a second instance judgment, rejecting the appeal and upholding the original verdict.
Core Judgment Basis for Second Instance
The presiding judge of the second instance in this case explained the key points of the judgment:
1. Legal application: This case involves Hong Kong related and foreign-related factors, and is a foreign-related civil dispute. According to the Law of the People's Republic of China on the Application of Law in Foreign related Civil Relations, the Anti Unfair Competition Law of China is applicable because the sued behavior mainly targets domestic enterprises, conflicts of core competitive interests, and the main place of conduct (such as the establishment of Alibaba International Station) are within the territory of China, and both parties have agreed to choose Chinese law afterwards.
2. Determination of the nature of the behavior: Intellectual property rights have regional characteristics, and foreign trademark rights themselves do not constitute a natural defense against domestic unfair competition.
After the court's investigation, the focus of this case is not on the effectiveness of the EU trademark, but on the legitimacy of its registration and exercise.
Both Chinese and European laws believe that knowingly registering the same or similar trademark on the same or similar goods with the prior use of the trademark by others constitutes malicious registration. Even if the trademark is valid in the place of registration, if it harms the legitimate rights and interests of others, it is still subject to the regulation of the Anti Unfair Competition Law.
The defendant Jiang had already been aware of the involved identification in the transaction with the plaintiff company, but still registered and initiated complaints based on it. The subjective malice was obvious, the behavior was improper, and caused objective damage, thus constituting unfair competition. The two defendants are ordered to jointly compensate the plaintiff company for economic losses and reasonable expenses totaling 500000 yuan.
The court has linked foreign trademark registration with domestic unfair competition by analyzing the purpose and consequences of the behavior, providing judicial remedies for domestic enterprises to deal with overseas malicious registration and reverse pressure. While respecting the principle of trademark territoriality, it effectively regulates cross-border malicious behavior through the application of anti unfair competition laws, demonstrating the adaptability of the judiciary to complex intellectual property issues in global trade.
Clearly defining the unauthorized registration of the original trademark owner's trademark by distributors outside the territory as "malicious registration" and determining that their subsequent abuse of infringement warnings (such as sending letters or complaints) constitutes unfair competition, including "abuse of intellectual property rights" in the regulatory scope, reflects the strict limitation of the judicial exercise of trademark rights boundaries.
The judgment did not solely rely on the "appearance of rights" to determine the legality of the warning, but rather penetrated the subjective malice and objective damage consequences of the examiner, regulating the abuse of legal procedures.
This "penetrating" review highlights the core value of the intellectual property system in "protecting innovation and combating speculation", and has a profound impact on regulating market competition order.