In a recent decision the Changsha Intermediate People's Court applied Article 2 of the Anti-unfair Competition Law and found that an online vendor selling genuine Avène products while claiming that its platform was the official Avène website had committed an act of unfair competition.

Facts

Pierre Fabre Dermo-Cosmetique owned the registered trademark EAU THERMALE AVÈNE (Figure 1) and EAU THERMALE AVÈNE in Chinese characters (Figure 2) in China for designated products in the class of "cosmetics, soap, shampoo, mineral or hotspring spray for beauty use".

Click here to view image.

Click here to view image.

In 2014 Pierre Fabre discovered that an online mall was advertising itself as "Avène's official website in China" and "Avène's online mall in China" and using Pierre Fabre's advertising materials.

Notarisation of the online mall's webpage contents in September 2014 revealed that it was owned by Changsha Hui Ji E-commerce Co, Ltd.

Pierre Fabre initiated a civil lawsuit against Changsha Hui Ji before the Changsha Intermediate People's Court on the grounds of trademark infringement and unfair competition, requesting cessation of the infringement, indemnification for the damages caused and a public apology.

Changsha Hui Ji argued that the Eau Thermale Avène products offered for sale in its online mall had come from a legitimate source and that its use of Pierre Fabre's trademark and advertising materials was therefore fair and did not constitute infringement or unfair competition.

Decision

On October 28 2015 the court rendered its judgment, upholding Pierre Fabre's unfair competition claim and ordering Changsha Hui Ji to:

  • cease all acts of unfair competition immediately; and
  • pay Rmb40,000 to Pierre Fabre in compensation for its economic loss.

The court reasoned that although Changsha Hui Ji's website had offered genuine products, its use of Pierre Fabre's trademarks, pictures and advertising materials should have been confined to a necessary and reasonable extent. The court further stated that Changsha Hui Ji's prominent use of Pierre Fabre's registered trademarks and its self-identification as "Avène's official website in China" and "Avène's online mall in China" – combined with pictures and advertising materials that were identical to those used on Pierre Fabre's website – were likely to lead the public to believe that its online mall was operated or licensed by Pierre Fabre, thus giving it unfair competition advantages. In light of this, Changsha Hui Ji was found to have violated the business ethics and good-faith principles outlined in Article 2 of the Anti-unfair Competition Law.

Comment

This case – which was listed in the Supreme People's Court's top-50 exemplary IP cases for 2015 – serves as a reference for distinguishing between fair and unfair use of trademarks.

For further information on this topic please contact Binbin Du or Xia Huan at Wan Hui Da Law Firm & Intellectual Property Agency by telephone (+86 10 6892 1000) or email (dubinbin@wanhuida.com or xiahuan@wanhuida.com). The Wan Hui Da Law Firm & Intellectual Property Agency website can be accessed at www.wanhuida.com.

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