Case Represented by Attorneys Fei Yan and Qi Wang Selected as a Typical Case of Zhejiang Province’s Judicial Services Guaranteeing the Construction of the Most Competitive Business Environment

On August 3, the Zhejiang High People’s Court, together with the Zhejiang Provincial Development and Reform Commission and the Zhejiang Provincial Federation of Industry and Commerce, jointly released the Typical Cases of Judicial Services Guaranteeing the Construction of the Most Competitive Business Environment (Second Batch).

This batch consists of five cases, focusing on the theme of “optimizing a fair competition environment.” They address hot issues and judicial needs of concern to private enterprises, including regulating administrative acts involving enterprises, strengthening anti-unfair competition adjudication, and tackling false litigation. They fully demonstrate the clear orientation of promoting strict, impartial, and civilized law enforcement by administrative organs, guiding market entities to operate in good faith and in compliance with the law, and helping create a fair and orderly competitive market environment.

The trademark infringement and unfair competition dispute case between Company A and Company B, Zhang et al., represented by Attorney Fei Yan, Director of Rayto (Hangzhou), and Attorney Qi Wang, was successfully selected as a Typical Case of Judicial Services Guaranteeing the Construction of the Most Competitive Business Environment (Second Batch).

Typical Cases of Judicial Services Guaranteeing the Construction of the Most Competitive Business Environment (Second Batch)
Special Action on “Optimizing a Fair Competition Environment”

Contents

1. A company v. a certain municipal people’s government — administrative reward case
   [Keywords: administrative reward, investment promotion, honoring commitments]

2. A company v. a certain municipal market supervision administration — industrial and commercial change registration case
   [Keywords: industrial and commercial change registration, corporate restructuring, additional approval conditions]

3. A company v. a certain district comprehensive administrative law enforcement bureau — administrative penalty case
   [Keywords: administrative penalty, confiscation of illegal gains, proportionality of penalty]

4. Company A v. Company B, Zhang et al. — trademark infringement and unfair competition dispute
   [Keywords: live-streaming e-commerce sales, trademark infringement, unfair competition]

5. Lan Mou — false litigation case
   [Keywords: false litigation, malicious preservation, criminal punishment]

Case Represented by Attorneys Fei Yan and Qi Wang: Company A v. Company B, Zhang et al. — Trademark Infringement and Unfair Competition Dispute

[Keywords]
Live-streaming e-commerce sales, trademark infringement, unfair competition

[Case Summary]
During live-streaming e-commerce sales on a certain live-streaming platform, Company B and its former legal representative Zhang produced and published a large number of short videos bearing Company A’s trademarks and logos as the main traffic diversion entry points. They used Company A’s trademarks and other logos through live-streaming overlays, the host’s clothing, language and behavior, product placement, and other means. The live-streaming room background was highly similar to the decoration of Company A’s offline physical store, while they actually mainly sold mobile phones of other brands. After Company A filed suit, the court held after trial that the trademark at issue enjoyed a high degree of recognition for mobile phone goods, and Company A’s trade name constituted a trade name with certain influence. Company B and Zhang, in the course of live-streaming e-commerce sales, comprehensively free-rode on the goodwill of the well-known trademark to attract followers and traffic, and sold in large quantities low-priced goods similar in appearance to the right holder’s genuine products, constituting trademark infringement and unfair competition. The circumstances were serious, and punitive damages should apply. The court therefore ordered Company B and Zhang to compensate Company A RMB 1.1 million for economic losses and reasonable rights protection expenses. Company B and Zhang refused to accept the judgment and appealed. The second-instance court rejected the appeal and upheld the original judgment.

[Typical Significance]
This case is a typical case of combating trademark infringement and unfair competition under the traffic-diversion live-streaming e-commerce model. Where, in the course of live-streaming e-commerce sales, a party prominently uses another party’s commercial logo with relatively high recognition to achieve improper traffic diversion and cause confusion, the court, in accordance with the law, found this to constitute trademark infringement and unfair competition, and applied the punitive damages provision to increase punishment for intentional and serious infringement. The judgment fully demonstrates the judicial orientation of strengthening the protection of well-known brands and effectively regulating unfair competition, and promotes the healthy and orderly development of the online live-streaming industry.

[Adjudicating Courts]
First instance: Qujiang District People’s Court of Quzhou City; second instance: Quzhou Intermediate People’s Court.

[Policy Guidance]
Articles 15 and 33 of the Law of the People’s Republic of China on Promoting the Private Economy; Articles 3 and 8 of the Opinions of the Zhejiang High People’s Court on Guaranteeing the Construction of the Most Competitive Business Environment with High-Quality Judicial Services.