Recently, Beijing IP Court issued a judgment in favor of Macy’s West Stores, Inc. (hereafter referred as “Macy's”) against Beijing Guowang Information Co., Ltd. (hereafter referred as “Guowang”). 

  1. Overview 

Macy’s is the trademark owner of 9 Chinese trademarks (registered in 1994) and over 100 trademarks of “Macy’s” all over the world. Macy’s discovered that Guowang has registered the domain names of “macys.com.cn” and “macys.cn” in 1999 and 2003 but it has never put the domain name in real use. Macy’s then filed a complaint before Beijing IP Court on trademark infringement and unfair competition of Guowang. In the complaint, Macy’s pleaded the court order Guomao to transfer the domain name back to Macy’s and pay damages of CNY 200,000 (USD 29,000). 

In the judgment, the court rules from the following two aspects: 

  1. trademark infringement

Guowang has never put the domain name into use and therefore it does not infringe the exclusive right of trademark of Macy’s. 

  1. unfair competition

Guowang’s act has led to confusion among Chinese public and cause harm to the fair environment of competition, constituting unfair competition. 

Guowang is ordered by the Court to transfer the domain name back to Macy’s and pay damages of CNY 40,000 (USD 5,900). 

  1. Analysis:

In China, if the domain name is registered by another entity, the proprietor may obtain the domain name back through different alternatives. Besides domain name dispute proceedings of ASIAN DOMAIN NAME DISPUTE RESOLUTION CENTRE in Beijing, proprietor may seek relief through civil litigation on unfair competition 

According to Anti Unfair Competition Law of P. R. China

Article 2.2 

"Unfair competition", in this Law, means activities made by managers who damage the others' legal rights and interests, disturb the order of social economy and violate the provisions of this Law. 

The Anti Unfair Competition law stipulates that any act damaging the legal rights and interest of the other in violation of the provisions of this law constitutes unfair competition. 

According to “Judicial Interpretation on Several Issues Concerning Application of Law in Trial of Civil Dispute Case related to Domain Name” by Supreme People’s Court of P. R. China

Article 4 When People’s court hears domain name dispute case, if the following conditions are met, the court should hold that registering and using of domain name by the defendant constitute infringement or unfair competition: 

(1) The civil right of plaintiff seeking for protect is legitimate and valid; 

(2) The disputed domain name or its main portion is copy, imitation, translation or interpretation of well known trademark of the plaintiff; or the disputed domain name or its main portion is identical or similar to the registered trademark and domain name, leading to confusion among public; 

(3) The defendant does not have legitimate right of the domain name or its main portion and it does not have proper reason of registering or using the domain name; 

(4) The defendant has bad faith in registering and using the domain name. 

“Judicial Interpretation on Several Issues Concerning Application of Law in Trial of Civil Dispute Case related to Domain Name” further set forth that the domain name registering meeting the conditions above constitute unfair competition. 

In this case, first of all, Macy’s is the legitimate owner of the trademark, trade name and domain name which is registered or generated before the registration date of the disputed domain names of “macys.cn” and “macys.com.cn”. 

Secondly, the distinctive portion of the disputed domain name is identical to the trade name and trademarks of Macy’s. Evidence provided by Macy’s indicates the mark and the trade name is well known to Chinese public and the Chinese public knows that the marks and the trade name enjoy worldwide fame. When the Chinese public encounters the disputed domain names, he would naturally associate the domain names to Macy’s and lead to confusion. 

Thirdly, the registration of the disputed domain names of “macys.cn” and “macys.com.cn” is lack of reasonable basis. 

Last but not the least, Guowang has bad faith in registering and using the domain name. 

According to “Judicial Interpretation on Several Issues Concerning Application of Law in Trial of Civil Dispute Case related to Domain Name” by Supreme People’s Court of P. R. China

Article 5 The People’s Court should hold the defendant has bad faith if any of the following conditions is met: 

(4) After the registration, the registrant does not use the domain name and he has never prepared to use it. In addition, he purposely block the proprietor from registering the domain name

After registration, Guowang has never used the disputed domain name and its registration has blocked Macy’s from registering and using the domain names. Therefore, Guowang’s act is lack of proper purpose and carries bad faith. 

In conclusion, Guowang’s act has met all the four conditions of the Judicial Interpretation and constitutes unfair competition.