Summary
The Shandong Provincial Higher People’s Court recently held a trademark agent responsible for one half of the damages suffered by the plaintiff trademark owner based upon (a) extensive bad faith trademark registration; (b) use of the trademark by a company associated with the agent; and (c) the agent’s handling of additional bad faith applications even after the applicant had been the subject of opposition and invalidation decisions confirming bad faith.
The total compensation awarded was RMB200,000 (US$28,000), of which the agent was held jointly and severally liable for half.
This is the second reported decision in which a trademark agent was held civilly liable for compensation, the first being a case decided in 2022 by the Fujian Provincial Higher People’s Court involving the mark “In-Sink-Erator.” In that case, the trademark agent was held jointly and severally liable for 40% of total compensation, resulting in an award against the agent of RMB 640,000 (US$89,600).
Notably, the Shandong court also ordered the defendant to withdraw or voluntarily cancel its bad faith applications and registrations. This is the second reported decision in which a Chinese court ordered a registry pirate to withdraw and cancel its remaining applications and registrations, the first being a case decided in Ningbo City in 2023 (involving the mark “ReFa” [(2023)浙0212民初4045号].
See East IP case notes on the ReFa and In-Sink-Erator decisions here 和 here.
Details of Tony & Tina Decision
Plaintiff (appellant in second-instance proceedings):
- Youku Information Technology (Beijing) Co., Ltd. (“Youku”)
Defendants (respondents in second-instance proceedings):
- Ding Yuanyuan (“Ding”, a Chinese individual)
- Shandong Weicheng Intellectual Property Service Co., Ltd. (“Weicheng”) – Ding’s trademark agent
Courts and Dates of Decisions:
- First instance: Linyi Intermediate People’s Court – decision issued on March 14, 2024
- Second instance: Shandong Provincial Higher People’s Court – decision issued on July 26, 2024
背景介绍
“Tina & Tony” is a Russian cartoon published in China by Youku. Tina is an elephant, and Tony is a hippopotamus.
Riki Co. Ltd. and Alibaba Culture & Media Co., ltd. (“Alibaba”) jointly owned copyright in the relevant animation works.
Youku registered copyright in the animation logo and images of “Tina & Tony” characters in China.
The works were first published in 2015 and the animation generated a high level of recognition in China.
Between December 2018 and August 2019, Ding filed 34 trademarks based on the “Tina & Tony” cartoons, including eight trademarks consisting of images of “Tina & Tony” characters and 26 trademarks for “Tina & Tony” characters’ names.
Youku and Alibaba opposed Ding’s applications for the eight cartoon images based on their prior copyright in the “Tina & Tony” characters and animations. In early 2021, Youku and Alibaba received favorable decisions in each case.
Youku and Alibaba also filed invalidations against Ding’s 26 trademark registrations for “Tina & Tony” character names. These disputes were likewise all decided in Youku and Alibaba’s favor.
The Trademark Review and Adjudication Department (TRAD) decided these cases based upon Ding’s apparent bad faith. Specifically, the decisions were based on Article 44 of the PRC Trademark Law, which prohibits registration of marks using “deceptive or other improper means.” Ding did not appeal any of these decisions.
Ding filed a second batch of 20 trademark applications copying “Tina & Tony” IP between August 2021 to January 2022 and a third batch of 15 trademarks after February 2022.
Altogether, Ding filed 69 trademarks targeting the “Tina & Tony” brand.
Further, Ding was associated with two companies, including Shandong Elephant Tina E-commerce Co., Ltd.” (previously known as Linyi Huakai Illumination Co. Ltd.), which sold “Tina & Tony”-branded food products on Taobao and Tmall.
The Linyi court found that Ding’s affiliated companies had filed more than 40 trademarks that copied or imitated other parties’ famous marks.
Youku submitted evidence that it had spent more than RMB 396,000 (US$56,000) to deal with registry actions and court appeals concerning Ding’s first batch of 34 pirate marks. Youku also claimed RMB 2 million (US$285,000) in other damages.
First Instance Decision by Linyi City Intermediate People’s Court
The Linyi Intermediate People’s Court found that Youku is the copyright holder of the “Tina & Tony” logo and character images, and that:
“(t)he rights and interests of copyright owners and other rights’ owners to commercialize relevant elements in films, television dramas and animations should be protected by the PRC Anti-unfair Competition Law as part of the owners’ important competitive advantages and market interests in the market for derivative works”.
Based on Youku’s extensive evidence of its promotion of “Tina & Tony,” the court also found that the “Tina & Tony” animation logos and character images and names constitute “signs with certain degree of influence (fame)” under Articles 6.1 and 6.4 of the PRC Anti-unfair Competition Law.
The court also found that Ding’s filing for the “Tina & Tony” cartoon character images and names violated the principle that trademark filings should not infringe upon other’s prior rights under the PRC Trademark Law.
Regarding the trademark agent Weicheng, the court found that it had violated the principle of honesty and good faith, as evidenced by the fact that Weicheng continued to assist Ding in filing for “Tina & Tony” trademarks even after the first 34 marks were successfully opposed and invalidated.
Thus, taking into consideration the fame of the “Tina & Tony” IP, the defendants’ bad faith, and the fact that Youku did not submit evidence to prove its actual losses or the defendants’ illegal gains, but did spend considerable resources to stop the infringement, the first instance court ordered that:
- Ding should de-register or withdraw all trademarks relating to “Tina & Tony” IP;
- Ding should stop all forms of pre-emptive trademark application, and should not file any trademarks relating to “Tina & Tony” IP in the future;
- Ding is liable to Youku for RMB 200,000 (US$28,000) in damages, and Weicheng is jointly and severally liable for RMB 100,000 ($14,000) of the total award.
Second Instance Decision by Shandong High People’s Court
Youku appealed the lower court’s decision to the Shandong High People’s Court as it was dissatisfied with the damages awarded, as it constituted only 10% of the amount it originally claimed in the first-instance proceedings.
The defendant Weicheng also appealed, claiming that it should not bear any legal responsibility.
Ding did not appeal.
In its decision, the second instance court upheld the lower court’s holding on both issues:
- Ding’s 69 trademark applications were all filed through Weicheng. In March to April 2021, the TMO rejected Ding’s applications based on Youku’s prior copyright. Weicheng should know that Ding’s applications have violated the relevant provisions of the Trademark Law. But Weicheng continued to file new applications on behalf of Ding in August 2021 to March 2022. As such, the court decision of first instance is correct that Weicheng’s activities constituted assisting in infringement.
Because Youku did not submit evidence to prove its loss or profit obtained by Ding and Weicheng, taking into consideration the fame of Youku’s prior rights, as well as the bad faith of Ding and Weicheng, Linyi Court ordered a damage of US$28,000 is reasonable, and should be upheld.
