Page 144 - 2017 White Paper
P. 144
7 White Paper on the Business Environment in China
Star River Company and Hongfu Company were still September 8th 2008, Picasso Company granted Shanghai
dissatisfied and applied to the Supreme People’s Court Pafuluo Stationery Co., Ltd. (“Pafuluo Company”) the right
for retrial. The Supreme People’s Court held that Weifu to exclusively use the concerned trademark with respect
Company used the mark “Star River Garden” which was to writing instruments in Mainland China, the term being
similar to the trademark “Star River” as the name of its from September 10th 2008 to December 31st 2013. On
building, which would confuse the relevant public easily, March 12th 2009, this Trademark Licensing Contract
constituting infringement upon the relevant trademark Recordal was approved by the State Administration for
of Star River Company and Hongfu Company. Therefore, Industry and Commerce. On February 11th 2010, Picasso
the Supreme People’s Court revoked the judgements of and Pafuluo Company extended the licensing term ten
the first instance and the second instance and ordered years based on the original agreement. On January 1st
Weifu Company not to use the names related to “Star 2012, Picasso Company and Pafuluo Company agreed to
River” as the names of its buildings which were not sold terminate the concerned trademark licensing contract
yet or planned to be sold and to compensate Star River recordal, but other agreements about this trademark
Company and Hongfu Company for economic losses in were still effective.
the amount of 50,000 yuan.
On February 6th 2012, Picasso Company and Shanghai
2. Comment Yixiang Stationery Co., Ltd. (“Yixiang Company”) signed
a Trademark Licensing Contract, agreeing that Yixiang
This case involved the protection of the registered Company had the right to exclusively use the concerned
trademarks in the service categories of sales of trademark during January 15th 2012 to August 31st
immovable properties and received extensive attention. 2017. Pafuluo Company claimed that the acts of Picasso
The judgement of retrial of the Supreme People’s Court Company and Yixiang Company complied with the
clarified whether the parties should be ordered to stop circumstance of“the parties colluded in bad faith, thereby
using when conflicts occurred between intellectual harming the interests of the third party” and “violates
property rights such as trademark and property rights, a mandatory provision of any law of administrative
which should consider the public interest and should regulation” specified in the Contract Law. Pafuluo
follow the principal of protection in good faith. In the Company initiated a lawsuit with the court, requesting:
instant case, considering that the name of the community the court hold that the Trademark Licensing Contract
included the words “Star River”, Weifu Company had been signed by Picasso Company and Pafuluo Company
approved by the civil affairs bureau and the residents of was invalid and that the two defendants should jointly
the community had already been occupying the premises compensate Pafuluo Company for economic losses in the
for many years. There was also no evidence proving that amount of one million yuan. Shanghai First Intermediate
the residents knew the name of the community infringed Court held that the disputed Trademark Licensing
upon the trademark of Star River Company when Contract was entered into with true intent and not in
purchasing the properties. Thus, the Court did not order violation of the Contract Law of China.
existing premises with the name had to cease using the
name. However, it did order Weifu Company not to use 2. Comment
names related to “Star River” which were not sold yet or
planned to be sold. The judgement of this case not only The judgment of this case clarifies that to meet the
protected the interests of the trademark owner, but also standard of “malicious collusion damage to the interests
avoided the undue punishment on the existing premises of third parties” in accordance with the contract law, the
where there was no evidence of infringement. defendant must have the subjective intent to harm others
by colluding. In this case, the Court would not accept
Shanghai Pafuluo Stationery Co., Ltd. v. mere closeness in temporality to be indicative of such
Shanghai Yixiang Stationery Co., Ltd. and a subjective intent. However, the earlier exclusive use of
Picasso International Enterprise Co., Ltd. the trademark can sometimes influence a subsequent
contract signed by a third party to be indicative of bad
1. Case Brief faith. The judgment of the second instance of this case
is of great significance for clarifying the market rules of
Picasso International Enterprise Co., Ltd. (“Picasso trademark licensing transactions. The judgment of this
Company”) is the owner of a figurative trademark. On case has also laid a foundation for dozens of related cases
144
Star River Company and Hongfu Company were still September 8th 2008, Picasso Company granted Shanghai
dissatisfied and applied to the Supreme People’s Court Pafuluo Stationery Co., Ltd. (“Pafuluo Company”) the right
for retrial. The Supreme People’s Court held that Weifu to exclusively use the concerned trademark with respect
Company used the mark “Star River Garden” which was to writing instruments in Mainland China, the term being
similar to the trademark “Star River” as the name of its from September 10th 2008 to December 31st 2013. On
building, which would confuse the relevant public easily, March 12th 2009, this Trademark Licensing Contract
constituting infringement upon the relevant trademark Recordal was approved by the State Administration for
of Star River Company and Hongfu Company. Therefore, Industry and Commerce. On February 11th 2010, Picasso
the Supreme People’s Court revoked the judgements of and Pafuluo Company extended the licensing term ten
the first instance and the second instance and ordered years based on the original agreement. On January 1st
Weifu Company not to use the names related to “Star 2012, Picasso Company and Pafuluo Company agreed to
River” as the names of its buildings which were not sold terminate the concerned trademark licensing contract
yet or planned to be sold and to compensate Star River recordal, but other agreements about this trademark
Company and Hongfu Company for economic losses in were still effective.
the amount of 50,000 yuan.
On February 6th 2012, Picasso Company and Shanghai
2. Comment Yixiang Stationery Co., Ltd. (“Yixiang Company”) signed
a Trademark Licensing Contract, agreeing that Yixiang
This case involved the protection of the registered Company had the right to exclusively use the concerned
trademarks in the service categories of sales of trademark during January 15th 2012 to August 31st
immovable properties and received extensive attention. 2017. Pafuluo Company claimed that the acts of Picasso
The judgement of retrial of the Supreme People’s Court Company and Yixiang Company complied with the
clarified whether the parties should be ordered to stop circumstance of“the parties colluded in bad faith, thereby
using when conflicts occurred between intellectual harming the interests of the third party” and “violates
property rights such as trademark and property rights, a mandatory provision of any law of administrative
which should consider the public interest and should regulation” specified in the Contract Law. Pafuluo
follow the principal of protection in good faith. In the Company initiated a lawsuit with the court, requesting:
instant case, considering that the name of the community the court hold that the Trademark Licensing Contract
included the words “Star River”, Weifu Company had been signed by Picasso Company and Pafuluo Company
approved by the civil affairs bureau and the residents of was invalid and that the two defendants should jointly
the community had already been occupying the premises compensate Pafuluo Company for economic losses in the
for many years. There was also no evidence proving that amount of one million yuan. Shanghai First Intermediate
the residents knew the name of the community infringed Court held that the disputed Trademark Licensing
upon the trademark of Star River Company when Contract was entered into with true intent and not in
purchasing the properties. Thus, the Court did not order violation of the Contract Law of China.
existing premises with the name had to cease using the
name. However, it did order Weifu Company not to use 2. Comment
names related to “Star River” which were not sold yet or
planned to be sold. The judgement of this case not only The judgment of this case clarifies that to meet the
protected the interests of the trademark owner, but also standard of “malicious collusion damage to the interests
avoided the undue punishment on the existing premises of third parties” in accordance with the contract law, the
where there was no evidence of infringement. defendant must have the subjective intent to harm others
by colluding. In this case, the Court would not accept
Shanghai Pafuluo Stationery Co., Ltd. v. mere closeness in temporality to be indicative of such
Shanghai Yixiang Stationery Co., Ltd. and a subjective intent. However, the earlier exclusive use of
Picasso International Enterprise Co., Ltd. the trademark can sometimes influence a subsequent
contract signed by a third party to be indicative of bad
1. Case Brief faith. The judgment of the second instance of this case
is of great significance for clarifying the market rules of
Picasso International Enterprise Co., Ltd. (“Picasso trademark licensing transactions. The judgment of this
Company”) is the owner of a figurative trademark. On case has also laid a foundation for dozens of related cases
144
