Unitalen Client China Resources Holdings Won a Retrial Case of Civil Infringement of Trademark and Unfair Competition

February 22, 2022

Case brief:

Since China Resources Holdings opened supermarkets in mainland China in 1992, it has operated more than 3,000 supermarkets in many provinces and cities across the country. Its trademark No. 776090 "华润" (English name as "China Resources") and trademark No. 3843561 "华润万家" (English name as "China Resources Vanguard") have been continuously used in operation of supermarkets to this day since they were approved for registration. After long-term use and publicity, these trademarks have become well-known in related industries. In addition, China Resources Holdings has been engaged in capital investment, real estate, commodity retailing and other industries for a long time. After years of operation, its trade name "华润" has been widely known by the public in many related industries.

Chengdu Huarun Lighting (Chinese name as "成都华润灯饰"), which is engaged in lighting wholesale and retail, registered "华润" as an enterprise name in 2002, and used "Huarun Lighting" (Chinese name as "华润灯饰") in its storefront signboards, product labels and other places for promotion.

China Resources Holdings held that the above acts not only infringed on its exclusive right to use its registered trademarks, but also constituted unfair competition, so it filed a lawsuit with the Chengdu Intermediate Court, requesting the court to order Chengdu Huarun Lighting to cease the acts of infringement and compensate China Resources for losses.

Decision process:

In the first instance, the Chengdu Intermediate People's Court took the view that the use of "Huarun Lighting" by Chengdu Huarun Lighting was not use of a trademark, and that the retail services using the mark was not the same as or similar to the services "sales promotion (for others)" in which the registered trademarks as claimed are designated for use. Therefore, the court determined that there was no absolute proof of trademark infringement. At the same time, the court determined that since the son of the operator of Chengdu Huarun Lighting was named "华润" when he was born in 2001, the registration and use of the trade name "华润" of Chengdu Huarun Lighting was legitimate and did not constitute unfair competition. Then, the court dismissed all the claims of China Resources Holdings. Later, China Resources Holdings was not satisfied with the first-instance judgment and appealed to the Sichuan High Court. The court of second-instance further took the view that the registration and use of the trade name "华润" in Chengdu Huarun Lighting was legal because the name was derived from the name of the operator's son, and the court also believed that the retail services were not the same as or similar to the services "sales promotion (for others)" in which the registered trademarks as claimed are designated for use. Therefore, the court dismissed the appeal of China Resources Holdings and upheld the first-instance judgment.

China Resources Holdings refused to accept the judgment of the first and second instances, and entrusted Unitalen to apply to the Supreme People's Court for retrial.

Then, Unitalen and China Resources Holdings reached an agreement on preparation of expert argument, in-depth investigation and evidence collection and other plans, and made an investigation on legal issues including the relationship between "sales promotion (for others)" in class 35 and "retail or wholesale services" and limitation on commercial use of a person’s name. With the joint efforts of China Resources Holdings and the Unitalen team, the Supreme People's Court ruled to bring the case to trial. After the trial, it was finally determined that the defendent's acts constituted trademark infringement and unfair competition, the judgment of the first and second instances was abrogated, and Chengdu Huarun Lighting was ordered to immediately stop infringing on the petitioner's exclusive right to use the trademarks "华润" and "华润万家" registered in services "sales promotion (for others)" in class 35, stop using the enterprise name with the characters "华润" and changing the enterprise name, and compensating the petitioner for economic losses and reasonable expenses.

Typical significance:

It is reported that this case is the first case in which the Supreme People's Court agreed in a trademark civil infringement case that commodity wholesale and retail services and "sales promotion (for others)" in class 35 are similar services. In the judgment of retrial, the Supreme People's Court held that Chengdu Huarun Lighting classified various brands of lighting products sold by itself as an agency or purchased for sales so that consumers can easily pick out and buy products. "华润灯饰" is a service identifier provided on the above lighting products. Such a sales model overlaps with the services in which the trademarks involved are designated for use. The two services are similar services. This case is a useful guideline for handling of similar cases.