Dispute over Trademark Infringement and Unfair Competition between a Photoelectric Equipment Company and a Lighting Engineering Company

[Facts]

A Photoelectric Equipment Company is the exclusive owner of No. 6762514 Registered Trademark “”. The Intermediate People’s Court of Shenzhen City, Guangdong Province entered a civil judgment (No. 20054 [2021], Final, Civil Division, 03, Guangdong) to confirm that the trade name “Yajiang” of A Photoelectric Equipment Company has a certain influence, prohibit A Technology Company in Shenzhen from using the “Yajiang” as its trade name, and affirm the directional connection of A Photoelectric Equipment Company to the trade name “Yajiang”. A Lighting Engineering Company won the bid for a lighting project of A Real Estate Company in Haikou, and the awarded contract stipulated that the brand of lamps to be used shall be “Yajiang” or “Huaermei”. In the process of fulfilling a contract for the lighting project, A Lighting Engineering Company purchased “Yajiangda” lamps from A Lighting Factory in Zhongshan, and counterfeit “” lamps from A Trading Company in Xiamen. The “Yajiangda” lamps and the counterfeit “” lamps were both installed as the branded products of “Yajiang” in the lighting project of A Real Estate Company in Haikou. A Photoelectric Equipment Company believed that A Lighting Engineering Company had infringed its trademark right and constituted unfair competition, and filed a lawsuit with the Hainan FTP Intellectual Property Court, seeking an injunction to order A Lighting Engineering Company to stop the trademark infringement and unfair competition and to compensate for the economic loss.

[Judgment]

The Hainan FTP Intellectual Property Court held that the trade name “Yajiang”, an influential enterprise name in the lighting industry, is a property right of A Photoelectric Equipment Company. A Lighting Engineering Company provided counterfeit “” lamps and “Yajiangda” products of A Technology Company in Shenzhen to A Real Estate Company as the branded products of Yajiang. This was essentially a “hitchhiking” act to confuse other products with the branded products of “Yajiang” in merchandise transaction documents and during procurement, supply, and other commercial activities, which is sufficient to make the public confused about the origin of such products. This constitutes an act of unfair competition by using the enterprise name, and the use of counterfeit “” lamps constitutes an infringement of the exclusive right of the registered trademark of A Photoelectric Lighting Company. Therefore, A Lighting Engineering Company shall take the corresponding responsibility. The Hainan FTP Intellectual Property Court ruled that A Lighting Engineering Company shall compensate A Photoelectric Equipment Company for economic losses and reasonable expenses of RMB 470,000. A Lighting Engineering Company, unsatisfied with the judgment and appealed. The court of the second instance dismissed the appeal and affirmed the original judgment.

[Significance]

This case involves determining whether there is a competitive relationship between the seller and the manufacturer. Analyzing from the perspective of the elements of an act, the Hainan FTP Intellectual Property Court determined that the seller, in its business activities, intentionally confused trademarks, and purchased and provided two types of products of confusing trademarks, which constitute the act of confusion under Article 6 of the Law of the People’s Republic of China for Countering Unfair Competition and shall be determined as unfair competition. This case has reference significance for strengthening the standardized use of trademarks by business operators, guiding honest business practices, and protecting fair competition.