TYGlobe

Despite holding the license for use of the "XX Ling" trademark, the defendant was still ruled to lose the lawsuit and assume liability for compensation by the court. Recently, in an intellectual property rights protection case represented by lawyers from Shanghai TYGlobe Law Firm, our lawyers acted on behalf of the producer of the TV series *XX Ling* to institute legal proceedings against the defendant holding the right to use the "XX Ling" trademark to safeguard its legitimate rights and interests, and finally succeeded in holding the defendant liable.

Case Overview, Trial Court

Yuehu District People's Court of Yingtan City

Case No.

(2024) Gan 0602 Zhi Min Chu No. 324

plaintiff

Company A

defendant

Party B

Date of Judgment

October 17, 2024

Company A is the producer of the hit TV series *XX Ling*, and exclusively holds the rights to develop and operate derivative products of the aforesaid TV series. Relying on the high popularity and positive reputation of the series, Company A has designed and developed a series of *XX Ling* derivative products based on the content of the TV series, which are sold on major e-commerce platforms and well received by consumers. To protect relevant achievements of the TV series, Company A has filed applications for intellectual property rights including copyright of works of fine art and trademark rights in respect of elements such as logos, character images and scenes contained in the TV series. However, the trademark right of "XX Ling" designated for use on products including bamboo flutes has been pre-emptively registered by a third party.

Party B is a merchant on an e-commerce platform selling musical instruments including bamboo flutes. In March 2023, it obtained the trademark right of "XX Ling" for use on bamboo flutes from a third party, and used the said trademark on the bamboo flutes it sold. In November of the same year, Company A discovered the aforesaid sales conduct of Party B and filed a lawsuit with the court, claiming that such act infringed upon Company A's exclusive market competition rights and interests and constituted unfair competition.

Focus of Dispute: Trademark Use Right versus Market Competition Rights and Interests

Party B pleads in defense that it holds the right to use the "XX Ling" trademark on bamboo flute products, and affixing the "XX Ling" mark on the commodities it sells is a lawful act. Party B has submitted relevant authorization documents and certificates of the trademark use right to the People's Court.

Company A contends that it exclusively enjoys the market competitive advantage of developing and operating peripheral derivatives of the TV series *XX Ling*. Such rights and interests are acquired by the producers of the TV series including Company A through investing in and producing the TV series *XX Ling*, which has gained sound public reputation.

As for the focus of dispute in the present case, Company A contends that the purpose of trademark use is to enable consumers to distinguish the source of Party B's products and services from that of Company A's. However, in this case, Party B has marked words including "same style as *XX Ling*" and "same style as TV series and animations" on its products. On the contrary, the purpose of such act is to confuse the source of Party B's products and services, associate the products it sells with the TV series owned by Company A, and mislead consumers, which constitutes the "confusing act" stipulated in the *Anti-Unfair Competition Law of the People's Republic of China*. To this end, Company A adduces the product promotion contents displayed in Party B's store as evidence.

The court held upon trial that: The evidence submitted by Company A can prove that the TV series *XX Ling* has gained relatively high on-demand view volumes after being broadcast on online platforms and enjoys high popularity. Accordingly, the name of the TV series, characters, props, scenes, theme song titles and other elements therein have received high attention and are known to the relevant public. Therefore, the name of the TV series *XX Ling*, the names of the leading characters, the title of the theme song and other elements have established a stable corresponding relationship with the said TV series, possess the distinctiveness to distinguish the sources of works and products, and may be determined as product names and marks with certain influence protected under the Anti-Unfair Competition Law of the People's Republic of China. Although B is authorized to use the "XX Ling" trademark, apart from using the wording "XX Ling" in product link titles, he also uses such wording as "same style as the TV series and animation", "same style as the TV series", "theme song *XX* of *XX Ling*" and others, which is likely to mislead the relevant public into believing that the goods he displays and sells originate from Company A or have specific association with Company A, so as to obtain competitive advantages. Such act infringes the exclusive right enjoyed by Company A to develop, design, produce and sell peripheral derivatives based on the said TV series, constitutes an act of unfair competition, and shall cease the infringement and compensate for losses.

The Lawyer's Notes are closely focused on the legal basis underlying Company A's rights protection.

The right basis for Company A to safeguard its legitimate rights and interests in the present case is the exclusive right to develop and operate derivative products of the TV series, rather than the copyright of the TV series work itself. Pursuant to the laws of China, when a work has gained high public attention and reputation and is well known to the public, it acquires the attribute of distinguishing itself from other works and identifying the source of products. While possessing ornamental value, the work also has commercial value, which shall not be used by any other person without authorization. On this basis, the counsel representing Company A in this case chooses to apply the relevant provisions of the *Anti-Unfair Competition Law of the People's Republic of China* to safeguard the legitimate rights and interests of Company A, and claims that Party B has constituted unfair competition infringement.

Accurately ascertain the tortious acts committed by the defendant in the present case, and take targeted and precise actions.

The most salient feature of this case is that the defendant, Yi (pseudonym), enjoys the right to use the "XX Ling" trademark. Prior to the court hearing, Yi appeared fully confident and held the belief that he would not lose the case. However, the devil is often in the details. Through analyzing the specific details of Yi's infringing acts, the acting counsel found that Yi named his products "XX Ling Same Style", used the expression "same style as the TV series and animation" in promotional statements, and emphasized that the bamboo flutes he sold could play the theme song of the TV series "XX Ling". It is evident that Yi was not using the trademark, but associating his products with the TV series "XX Ling", which constitutes a "confusing act" as stipulated in the *Anti-Unfair Competition Law of the People's Republic of China*. During the trial, the counsel focused on the aforesaid points when presenting arguments to the trial judge, and his claims were supported by the court judgment.

Work outside court hearings shall not be neglected.

In addition to courtroom contests, a large amount of work outside court hearings also determines the outcome of a case. In the present case, upon discovering the infringing act of Party B, the retained counsel filed a complaint through the official channel of the e-commerce platform, which resulted in Party B's products being forcibly removed from the shelves for rectification by the e-commerce platform due to suspected infringement before the court session of this case was convened. This, on the one hand, corroborates the fact of Party B's infringement. Regarding the issue of the trademark being used by others, the law firm actively cooperated with Company A to submit an application to the trademark authority for revocation of the relevant trademark registration license. The relevant facts can also indirectly negate the legitimacy of the defendant's use of the trademark in this case.

Applicable Law

Article 6 of the Anti-Unfair Competition Law of the People's Republic of China

A business operator shall not commit any of the following confusing acts that mislead the public into mistaking its commodities for those of another person or deeming that it has a specific connection with another person: (1) Using without authorization a mark identical with or similar to the commodity name, packaging, decoration or other identification of another person that has certain influence; (2) Using without authorization the enterprise name (including abbreviation, trade name, etc.), social organization name (including abbreviation, etc.) or personal name (including pen name, stage name, translated name, etc.) of another person that has certain influence; (3) Using without authorization the main part of the domain name, website name, webpage, etc. of another person that has certain influence; (4) Any other confusing act that is sufficient to mislead the public into mistaking the relevant commodities for those of another person or deeming that there is a specific connection between the parties.

Article 48 of the Trademark Law of the People's Republic of China

For the purposes of this Law, "use of a trademark" refers to the act of using a trademark on goods, packaging or containers of goods, as well as trade documents for commodity transactions, or using the trademark in advertising, promotion, exhibitions and other commercial activities, for the purpose of identifying the source of goods.