News and Cases from China: May 2017

Beijing’s luxury Pangu 7 Star Hotel held to have infringed a registered ‘Pangu’ trade mark

The Pangu 7 Star Hotel is generally considered to be Beijing’s top luxury hotel - although five is the maximum number of stars awarded in the international hotel rating tradition.  In a first-instance decision, the Beijing Chaoyang District People's Court recently found that, in using ‘Pangu’ on the top of its hotel as well as in advertising materials, Pangushi International Hotel Co., Ltd. had infringed the Plaintiff’s ‘Pangu’ trade mark, registered in relation to hotel services. The defendant company was ordered to immediately cease the infringement.






Largest Counterfeit Shoe Case in China to date

Recently, police in Anhui Province raided a factory where counterfeit sports shoes were being made. Over 500,000 pairs of shoes, 60 million logos and packaging materials, valued at up to 600 million Yuan (approx. US$ 88.3 million), were seized, making this the largest counterfeit shoes case in China to date. The case has already been transferred to the local court where it is awaiting trial.





First Instance decision finds a Cloud Storage Service Provider Liable for Infringement  

The Beijing Shijingshan District People’s Court recently held that the Defendant, Alibaba Cloud, a service provider, had not taken adequate steps to prevent the publication of allegedly infringing material.  It had had notice of the allegedly infringing content for 8 months, which far exceeded the normal response time. The Court held that Alibaba Cloud had infringed and ordered it to pay compensation of about RMB260, 000 (approx. US$ 38,000) to the Plaintiff, Locojoy.  The Defendant has already filed an appeal to the Beijing Intellectual Property Court.           





Peak Sport Company succeeds against use of OEM mark ‘PEAK SEASON’

Recently, the Shanghai Intellectual Property Court gave final judgment in the ‘Peak’ trade mark case. Peak Sport, a famous Chinese sportswear manufacturer, had registered the trade mark ‘Peak’ in China.  The Defendant, an American company, had registered the mark  ‘Peak Season’ (PEAK being the most distinctive and significant part of the mark) in the US and licensed a Chinese company to manufacture and export clothing under the mark. Peak Sport subsequently became aware that the US licensee was exporting ‘Peak Season’ branded clothing, and commenced trade mark infringement proceedings in China.  It failed at first instance, the Court finding there had been no trade mark use in China.

Peak Sport then appealed to the Shanghai IP Court, which found in its favour.  Although the products were not available on the Chinese market, the fact that they were being sold on meant that the Chinese public could have access to them.  The mark served as an indictor of source and was, therefore, being used as a trade mark in China.   Given the overall similarity of the marks, there was likely to be customer confusion.  Because the products had not entered the market in China, the Defendants were ordered to pay only reasonable costs of RMB 20,000 (approx. US$ 2,935.00).

The key issue for trade mark disputes involving foreign OEMs, is whether use of the trade mark in the OEM constitutes ‘use’ under China’s  Trademark Law.