Recently, the Guangzhou Intellectual Property Court made a final ruling on a highly anticipated dispute over the rights of an animation character. The case involving Huayi Animation Co., Ltd. (Shenzhen) suing Guangzhou Hetang Brand Management Co., Ltd., Chunquan Brand Management (Guangzhou) Co., Ltd., and individual Nong, among others, for copyright infringement and unfair competition has come to a conclusion. The court determined that the three defendants' use of the "Guangtouqiang" animation character in their commercial activities constituted substantial similarity to the character protected by the plaintiff's copyright, thereby infringing on their copyright. Additionally, the defendants' direct use of the "Guangtouqiang" name in recruitment and promotional activities improperly leveraged the public recognition and market value accumulated by the "Boonie Bears" series, constituting unfair competition. The final ruling upheld the original judgment, ordering the three defendants to immediately cease infringement and jointly compensate the plaintiff company for economic losses and other damages amounting to one million yuan.

Background of the Dispute: A Well-Known IP Misappropriated for Commercial Use

Huayi Animation is the copyright holder of the "Boonie Bears" series of animated films and TV shows. Since its debut in 2012, the series has been widely popular, especially the character "Guangtouqiang," which has become deeply ingrained in the public consciousness and enjoys a high level of recognition. The focus of this case was on the use of the "Guangtouqiang GUANGTOUQIANG" trademark (the disputed trademark) and the character image. A third party applied for the registration of this trademark in Class 43 services in 2013 and later transferred it to defendant Nong in 2020. In 2021, due to Nong's inability to prove that the trademark had been used effectively in commerce during the specified period, the trademark management authority decided to revoke it. Nong's administrative lawsuit was not supported by the Beijing Intellectual Property Court, and the decision has since taken effect.

During the period of uncertainty regarding the ownership of the trademark (from September to December 2020), Nong successively authorized the other two defendant companies to use the trademark. Subsequently, Hetang Company prominently used the "Guangtouqiang" name in the promotion of the "Guangtouqiang Teahouse" project, while Chunquan Company used the same name in its website promotions to attract franchisees and charge fees. Feng, another defendant, participated in the promotion as the brand ambassador of the "Guangtouqiang Teahouse."

The plaintiff company argued that the defendants, knowing full well the high popularity of the "Guangtouqiang" character and the repeated rejections of other "Guangtouqiang" trademark registrations under Nong's name, continued to use the name and image for recruitment, which was suspected of copyright infringement and constituted unfair competition.

Million-Yuan Compensation Highlights Judicial Stance

During the trial, Hetang Company, Chunquan Company, and Nong argued that:

The Baiyun District Court of Guangzhou ruled in the first instance that the three defendants' actions constituted copyright infringement and unfair competition. Feng's portrayal in the promotion was found to be substantially similar to the "Guangtouqiang" character, infringing on the rights of reproduction and performance. The court ordered the three defendants to jointly compensate the plaintiff company one million yuan, with Feng bearing joint liability within the scope of 50,000 yuan. The three defendants appealed to the Guangzhou Intellectual Property Court, but the appeal was ultimately dismissed, and the original judgment was upheld.

Judicial Clarification: Defining the Boundaries of Merchandising Rights for Animation Characters

The core challenge and highlight of this case were the plaintiff's claims that the defendants' use of the "Guangtouqiang" name for commercial activities infringed on the merchandising rights derived from the well-known animation character name, constituting unfair competition. The presiding judge pointed out that although the name of an animation character is not a legally defined type of civil right, when it accumulates public recognition and emotional attachment due to the popularity of the work and combines with specific goods or services to generate commercial value and business opportunities, it can be considered a "prior right" under Article 32 of the Trademark Law. Allowing operators to arbitrarily use well-known animation character names as commercial identifiers would contradict the legislative purpose of the Anti-Unfair Competition Law.

Therefore, as a well-known animation character name with prior high popularity owned by Huayi Animation, the legitimate rights and interests embodied in "Guangtouqiang" should be protected by the judiciary. The merchandising rights contained in the animation character name are a non-typical legal interest, and their legal basis, protection grounds, and boundaries are still unclear in current regulations. This case, through judicial practice, has cautiously explored and established the remedial rules for such rights, providing significant reference value for similar cases.