10 Typical Cases of IPR Protection —— Case Example 7

Equally Protecting IPR of both Domestic and Foreign Parties according to Law
To Enhance Confidence of Foreign Parties to Make Investment
——Chongqing B Company v.  M Company and C Company over disputes of trademark infringement and unfair competition


[Case Summary]
Laytex is a well-known natural latex pillow and mattress brand in Thailand. The plaintiff, Chongqing B Company was authorized by the right holder as the sole legal user and operator of the trademark in Chinese market. The company applied for the registration of the "laytex" trademark No. 16995590 in China. On May 1, 2015, Chongqing B Company issued an authorization certificate to  M Company and designated it as the general agent for Guangdong Province. On May 12, 2015, C Branch of M Company was established. After that, both parties did not sign a formal agency agreement. On May 18, 2015 and January 18, 2016, K, the legal representative of M Company, applied for three design patents for the packaging bag, all of which contained the logo of laytex. The plaintiff, Chongqing B, filed a lawsuit based on claims including the use of the laytex logo on the latex pillow produced and sold by the defendant M Company constituted trademark infringement; the unauthorized use of the unique packaging and decoration of its own products; the unauthorized use of its own company title in the company name constituted unfair competition.
[Ruling Results]
The court held that the registered trademark of the plaintiff should be protected according to law. Although the design patent applied by K has the “layex” logo and the authorization announcement date of the patent was earlier than the registration date of the registered trademark of the plaintiff, Chongqing B Company, the trademark of the plaintiff was used first, and the defendant came across the the plaintiff ’s trademark in contact with the plaintiff during the negotiation of agency matters,  and then the design patent was applied in the same or similar packaging decoration as the plaintiff, thereby the stability of the patent was not guaranteed. Secondly, the object of design patent protection was the shape, pattern or combination of products, not the text in the design pattern. The defendant used a logo similar to the registered trademark of others on the same product, and his actions constitute trademark infringement. The decoration pattern, color, text content and layout of the pillow packaging sold by the defendant were highly similar to the plaintiff's packaging, and it was marked with “B (LAYTEX) natural latex pillow” on the label with a clear intention to create a confusion or have a specific connection with the plaintiff ’s goods, which constitutes unfair competition. When the defendant set up a branch, the plaintiff ’s name was used as the company’s name without the plaintiff ’s permission, and the pillows were sold with a note claiming to be the general agent of China, which confused customers of the source of the goods. The plaintiff 's request of banning the defendant from using its name was also supported by the court. Therefore, the two defendants were ruled to immediately stop the infringement and unfair competition, and stop using "B" as their companies’ name and compensated the plaintiff for economic losses and reasonable rights protection costs of 500,000 yuan. Thetwo defendant filed appeal and the second instance maintained the original ruling.
[Significance]
As the country promotes a higher level of comprehensive opening up, more and more well-known overseas brands are seeking development in Chinese Mainland through agents and other means. After contacting foreign brands or their agents, some parties deliberately infringed on the registered trademarks of others in order to seek economic benefits, or engaged in unfair competition through illegal use of other people ’s business names or packaging and decoration patterns. In this case, a negative evaluation of the above-mentioned acts was made, and the infringer was ordered to immediately stop trademark infringement and unfair competition and compensate the loss. Offering equal IPR protection for both domestic and foreign parties is of great significance to create a fair, just and transparent international business environment.