[Basic Case Facts]

 A marketing company is a licensee of the registered trademarks “Liufu” (Luk Fook) and “Liufu Jewellery” for use on decorative items (jewelry) and other goods. Authorized by the licensee, the marketing company can file lawsuits against trademark infringement. The trademark “Jin Liufu Shangmei” was acquired by the jewelry company from a third party and was later declared invalid. The marketing company argues that the jewelry company’s licensing of the “Jin Liufu Shangmei” mark, which is similar to the “Luk Fook” and “Luk Fook Jewellery” trademarks, to a trading company, and that the trading company’s use of this mark on jewelry infringes on the marketing company’s trademark rights. The marketing company also alleges that the jewelry company’s registration and use of “Jin Liufu Shangmei” as a trade name constitutes unfair competition, and therefore filed a lawsuit in court.

 [Judgment Result]

 The court of first instance found that the jewelry company’s actions constituted trademark infringement and unfair competition, and ordered the jewelry company to compensate the marketing company 100,000 RMB, among other things. The jewelry company appealed. The court of second instance upheld the first instance judgment’s finding regarding trademark infringement, but held that the jewelry company’s registration and use of its company name did not constitute unfair competition, and therefore partially modified the first instance judgment. The marketing company appealed to the Supreme People’s Court. After reviewing the case, the Supreme People’s Court reversed the second instance judgment and upheld the first instance judgment.

 The Supreme People’s Court, in its retrial, held that the “Liufu” trademark, through continuous promotion and use by its registrant, a certain group, and a certain marketing company, had acquired a high degree of market recognition. As a competitor, the jewelry company, when registering its business name later, should have been aware of the already well-known “Liufu” trademark, yet still registered and used the similar mark “Jin Liufu Shangmei,” which fully contains the characters “Liufu,” as its trade name. Subjectively, this demonstrated a clear intent to exploit the goodwill of the “Liufu” trademark, and objectively, it was likely to mislead the relevant public into believing that its goods originated from the certain group or that its own company had a specific connection with the group, thus constituting unfair competition. The second-instance judgment, having already determined that “Jin Liufu Shangmei” and “Liufu” were similar and accordingly determined that the jewelry company infringed its trademark rights, incorrectly concluded that its use of “Jin Liufu Shangmei” as a trade name did not constitute unfair competition simply because the jewelry company was using its full business name correctly. This conclusion should be corrected.

 [Typical Significance]

 This case is a typical example of regulating the use of registered company names to engage in counterfeiting and confusion. The judgment clarifies that registering and using a commercial mark similar to another’s registered trademark as a trade name in a company name, even if the company name is used properly, is insufficient to avoid confusion and should be considered unfair competition. This case has positive significance for unifying the adjudication standards for intellectual property infringement cases involving commercial marks and effectively curbing “brand imitation” and “free-riding” behaviors.

Case Number. Retrial:最高人民法院(2026)最高法民再51号

                                                                                                                                                        Source: https://www.court.gov.cn