TYGlobe

Against the backdrop of the current rapid development of the cultural and entertainment industry, Multi-Channel Network (MCN) institutions have risen rapidly as an emerging industrial force. As a leading player in this field, AB Entertainment has accumulated high reputation in the industry, garnered a large number of fans and abundant business resources by virtue of its successfully registered "AB Media" trademark. Recently, however, AB Entertainment has encountered a thorny issue: a number of enterprises have emerged on the market whose registered enterprise names are highly similar to the "AB Media" trademark, such as Beijing AB Cultural Media Co., Ltd. and Guangxi AB Cultural Media Technology Co., Ltd. Most of these enterprises are engaged in business sectors related to AB Entertainment, which undoubtedly increases the likelihood of consumer confusion. In this regard, do these seemingly lawfully registered enterprise names constitute infringement? Is AB Entertainment entitled to demand that these enterprises change their names? In the following sections, this article will conduct an in-depth analysis of the aforesaid issues from the perspectives of the Trademark Law and the Anti-Unfair Competition Law in combination with relevant judicial precedents, and provide practical suggestions for enterprises to avoid such legal risks.

I. Logic for Determination of Infringement Concerning Conflicts Between Trademarks and Trade Names

(I) The Legal Cornerstone for Tort Determination

Conflict between trademarks and trade names refers to the circumstance where an enterprise name (trade name) is identical or similar to a registered trademark owned by another party, which may cause confusion or misidentification among consumers regarding the source of goods or services. At the legal level, the *Trademark Law of the People's Republic of China*, the *Anti-Unfair Competition Law of the People's Republic of China*, and the *Regulations on the Administration of Enterprise Name Registration* jointly constitute the important basis for determining whether such a conflict constitutes infringement.

Article 57 of the *Trademark Law of the People's Republic of China* explicitly stipulates that an act of using a sign identical or similar to another person's registered trademark without the permission of the trademark owner, where such use is likely to cause confusion among consumers, constitutes trademark infringement. Article 6 of the *Anti-Unfair Competition Law of the People's Republic of China* focuses on prohibiting business operators from committing confusing acts that may mislead the public into believing that their business has a specific connection with another person. Article 27 of the *Provisions on the Administration of Enterprise Name Registration* also emphasizes that an enterprise shall avoid conflicts with the prior legitimate rights of others (such as trademark rights) when registering its name. These legal provisions coordinate with each other, providing solid legal support for the accurate determination of infringement acts arising from conflicts between trademarks and trade names.

(II) Key Factors for Consideration in Tort Determination

In practical judicial practice, when adjudicating cases concerning conflicts between trademarks and trade names, the people's courts usually conduct comprehensive consideration from multiple key aspects to determine whether the relevant act constitutes infringement.

First and foremost, the well-knownness of a trademark is a crucial factor. The higher the well-knownness of a trademark, the greater its distinctiveness and influence in the market, and accordingly, the wider the scope of protection conferred by law. The "AB Media" trademark owned by AB Entertainment has already gained certain influence in the cultural and entertainment industry, which endows it with a more sufficient legal basis for protection in the event of conflicts between trademarks and trade names.

Secondly, the degree of similarity between a trade name and a trademark is also an important basis for the determination of infringement. This similarity covers multiple aspects including characters, pronunciation and meaning. For example, "AB Cultural Media" and "AB Media" are completely identical in their core part "AB", and such a high degree of similarity undoubtedly increases the possibility of confusion among consumers. Article 13 of the *Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People's Republic of China* further clarifies the legal criteria for such similar circumstances in infringement determination.

Furthermore, the relevance between the industries concerned shall not be overlooked. Where the sector in which a trade name is used is identical or similar to the sector for which a trademark is registered, consumers are more likely to associate the two, thereby giving rise to confusion. The aforesaid enterprises all have names involving the culture and entertainment sector, and their business scope highly overlaps with that of AB Entertainment, which undoubtedly greatly increases the possibility of a finding of infringement.

In addition, subjective malice is one of the factors that courts will take into consideration when determining infringement. If there is evidence proving that a trade name registrant has actual knowledge of the existence of another party's trademark but still intentionally registers a similar name, such act is highly likely to be deemed to have subjective malice. In judicial practice, a large number of enterprises achieve the purpose of free-riding on others' goodwill by altering their enterprise names, and their subjective malice is even more obvious.

Finally, the likelihood of confusion is the core criterion for the entire infringement determination. Specifically, it is necessary to judge whether the relevant public is likely to mistakenly believe that there is a certain affiliation between the two enterprises due to the similarity between the trade name and the trademark. This criterion integrates multiple aforementioned factors and serves as a comprehensive and holistic basis for judgment.

II. Determination of Infringement Concerning Three Types of Circumstances Where Trade Names Are Used in Enterprise Names

In commercial activities, the infringement issues arising from conflicts between trademarks and trade names have become increasingly prominent. This paper conducts an in-depth analysis from three common scenarios:

1. Infringement involving exact identity with a trademark or the unique name of a well-known commodity: Where the core element of an enterprise name is exactly identical to another person's registered trademark or the unique name of a well-known commodity, and the relevant industry sectors are the same or similar, there is a very high possibility of constituting infringement. Pursuant to Article 57 of the *Trademark Law of the People's Republic of China*, use of an identifier identical with or similar to a registered trademark on identical or similar goods without the permission of the trademark registrant, where such use is likely to cause confusion, constitutes trademark infringement. Even if the enterprise name has only completed industrial and commercial registration and has not been put into actual use, it may be determined as trademark infringement as long as there is a likelihood of confusion among consumers.

In addition, Item 2 of Article 6 of the Anti-Unfair Competition Law of the People's Republic of China expressly provides that unauthorized use of another person's influential enterprise name (including its abbreviation, trade name, etc.) that is sufficient to mislead others into believing that a specific connection exists with the said other person is prohibited.

Case: Little Sheep Trademark Infringement Case

"Little Sheep" is a well-known trademark of Inner Mongolia Little Sheep Catering Chain Co., Ltd., and is a household name in the hot pot catering industry. After its establishment, a catering enterprise adopted "XX Little Sheep Catering Co., Ltd." as its enterprise name and also engaged in hot pot business. Inner Mongolia Little Sheep Catering Chain Co., Ltd. asserted that the aforesaid enterprise's conduct constituted infringement, as consumers would easily confuse the enterprise with its own brand when seeing "XX Little Sheep Catering Co., Ltd.", and mistakenly believe that they are the same entity or have an affiliated relationship. Upon trial, the court held that the "Little Sheep" trademark enjoys extremely high popularity. The aforesaid enterprise used the same core name to operate in the same industry sector, which was likely to mislead consumers. The court finally ruled that the enterprise constituted trademark infringement, ordered it to cease using the relevant enterprise name and pay corresponding compensation.

For enterprises identified by AB Entertainment, where the core element of an enterprise's name is completely identical to the "AB Media" trademark, such as "AB Cultural Media Co., Ltd.", there is an extremely high possibility of constituting trademark infringement from a legal perspective. This is because when consumers are exposed to the products or services of the aforesaid enterprise, they are highly likely to confuse it with AB Entertainment and mistakenly assume that there is an association between the two parties.

2. Infringement involving identities highly similar yet not completely identical to trademarks or corporate trade names: The core part of some enterprise names, though not completely identical with a registered trademark or corporate trade name, is highly similar in terms of written form, pronunciation, meaning and other aspects, and the relevant enterprises operate in the same or similar industry sectors. Whether such circumstances constitute infringement shall be determined through comprehensive consideration of factors including the reputation of the trademark, the degree of similarity, and industry relevance. Pursuant to Item 2 of Article 57 of the *Trademark Law of the People's Republic of China*, using a sign similar to a registered trademark on identical or similar goods without permission, which is likely to cause confusion, constitutes infringement. In addition, Sub-item (1) of Article 1 of the *Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Trademark Dispute Cases* stipulates that using words similar to another person's registered trademark as a trade name, which is sufficient to cause confusion, constitutes trademark infringement.

Case: Xiaomi Technology Co., Ltd. v. Zhongshan Xiaomi Electric Appliance Co., Ltd.

"Xiaomi" is the core trademark of Xiaomi Technology Co., Ltd., which enjoys extensive influence in the field of intelligent electronic products. Zhongshan Xiaomi Electric Appliance Co., Ltd. used "Xiaomi" as its trade name to produce and sell electrical products. Upon trial, the court held that the "Xiaomi" trademark enjoys high popularity. The trade name of Zhongshan Xiaomi Electric Appliance Co., Ltd. is highly similar to the "Xiaomi" trademark, and both operate in electricity-related industries, which is highly likely to cause confusion among consumers and make them mistakenly identify that there is an association between the two parties. Accordingly, the court ruled that Zhongshan Xiaomi Electric Appliance Co., Ltd. constituted infringement.

For the enterprise names provided by AB Entertainment, where the core part of a certain enterprise name, such as that of "AB Culture Media Technology Co., Ltd.", is highly similar to the "AB Media" trademark and the two parties operate in the same industry, the possibility of such act constituting infringement is relatively high when all relevant factors are comprehensively considered. This is because the similar names may cause confusion among consumers as to the source of services, thus undermining the market share and brand image of AB Entertainment.

3. Use of a similar trade name in actual operation despite incomplete consistency with the trademark or enterprise trade name: Where the core element of an enterprise name is not completely consistent with the registered trademark or the enterprise's trade name, but a trade name or mark highly similar to the trademark is used in actual business activities, it is highly likely to constitute trademark infringement. Pursuant to Article 48 of the *Trademark Law of the People's Republic of China*, trademark use includes using the trademark in commercial activities such as advertising and promotion, commodity packaging, etc. Prominent use of a trade name may be determined as trademark use. In addition, Subparagraph (1) and Subparagraph (4) of Article 6 of the *Anti-Unfair Competition Law of the People's Republic of China* also prohibit causing confusion as to the source of goods or enterprise names through such means as packaging, decoration and other methods.

Case: Qiaodan Sports Co., Ltd. (hereinafter referred to as "Qiaodan Sports") v. Michael Jordan

Qiaodan Sports dates back to 1984. By virtue of its continuous investment in and expansion of products such as sports shoes and sportswear, it has secured a proper position in China's sporting goods market.

In the course of its business operation, Qiaodan Sports not only uses "Qiaodan" as its trade name, but also prominently uses a large number of elements related to Michael Jordan in such aspects as products, packaging and publicity, including the Chinese character "Qiaodan", its corresponding pinyin, and graphics similar to the image of Michael Jordan, among others.

Upon trial, the court holds that the conduct of Qiaodan Sports is highly likely to mislead consumers into believing that it has a specific association with Michael Jordan, which constitutes infringement.

This is similar to the *Starbucks v. Shanghai Xingbake* case, where a large number of commercial signs such as actually used store signboards, in-store decorations and staff uniforms are substantially similar to the trademarks of Starbucks Corporation of the United States. Examples include the font styles and color schemes of the signboards, the dominant green color tone of the stores, and the application of the distinctive mermaid graphic elements, among others. Just as Qiaodan Sports prominently uses elements related to Michael Jordan in its products, packaging, promotion and other aspects, both cases underscore the critical impact of actual use acts on the determination of infringement.

For enterprises identified by AB Entertainment, where the core part of an enterprise's name is not fully consistent with the "AB Media" trademark, but the wording "AB" is subject to prominent use in actual business operations, such as prominently displaying "AB" on store signboards, advertising and promotion materials, product packaging and other scenarios, the possibility that such enterprise constitutes infringement is relatively high. This is because such act of prominent use will mislead consumers into forming a wrong perception of the relationship between the relevant enterprise and AB Entertainment, thus damaging the commercial interests of AB Entertainment. The reverse also applies. We have noted that there is one enterprise named "Hui AB Media Company" among them, which is mainly engaged in conference affairs business and has not used any relevant information of AB Media in the course of its actual operation. Therefore, lawyers preliminarily determine that the possibility of this company constituting infringement is relatively low.

III. Overall Conclusion and Opinion

Based on the detailed analysis of the above three categories of circumstances, the following overall conclusions can be drawn with respect to the names of multiple infringing enterprises provided by AB Entertainment: Although the trade names of the aforesaid enterprises are not completely identical to "AB Media", the core part of their trade names is highly similar to the "AB Media" trademark, and most of them operate in the same industry sector, hence there is a possibility of constituting infringement. However, when AB Entertainment decides whether to take legal actions, it shall prudently consider factors including the severity of the actual infringement circumstances, the specific orientation and standard of local judicial adjudication, etc. Where the infringement circumstances are relatively minor, or the amount of damages awarded by local judicial authorities in similar cases is relatively low, AB Entertainment may need to comprehensively weigh the costs and benefits of rights protection; conversely, where the infringement circumstances are serious, which has caused relatively significant damage to the market interests of AB Entertainment, and the local judicial environment is relatively favorable for intellectual property rights protection, AB Entertainment may resolutely take legal measures to safeguard its legitimate rights and interests.

IV. Recommendations for Enterprises on Risk Prevention

(I) Recommendations for AB Entertainment

1. Take Proactive Actions to Safeguard Legitimate Rights and Interests: AB Entertainment shall take active measures against those enterprise names that may constitute infringement. It may first issue a lawyer's letter to the relevant party, notify the party that its act may constitute infringement, and demand the party to cease using the said name and modify its enterprise name. If the lawyer's letter fails to achieve the expected effect, AB Entertainment may, in accordance with specific circumstances, choose to file an administrative litigation or a civil litigation, compel the relevant party to modify its enterprise name through legal channels, so as to safeguard its own legitimate rights and interests.

2. Strengthen monitoring to prevent risks before they occur: Establish and improve a trademark monitoring mechanism, and conduct regular comprehensive monitoring of trademark registration status and enterprise name registration information. By means of professional trademark monitoring tools and market research methods, potential infringement acts shall be detected in a timely manner. Once a newly registered enterprise name is found to be likely to infringe upon its own trademark rights and interests, corresponding measures shall be taken immediately to nip the infringement risk in the bud.

3. Expand the Scope of Protection and Establish a Defense System: To prevent free-riding by other parties, AB Entertainment may consider registering defensive trademarks in relevant categories and derivative fields. In addition to putting in place a sound trademark layout in China, in light of the current globalized business environment, it is also of vital importance to extend trademark protection for international market expansion, for which Madrid Trademark Registration serves as a powerful instrument.

Madrid Trademark refers to the trademark registration conducted among member states of the Madrid Union pursuant to the *Madrid Agreement Concerning the International Registration of Marks*. The Madrid Union consists of a large number of member states. Through Madrid trademark registration, an applicant only needs to file one application, use one language (French, English or Spanish), pay one set of fees, and can designate multiple member states for trademark registration, which greatly simplifies the procedure of international trademark registration and saves time and costs.

For AB Entertainment, securing Madrid international trademark registration enables it to obtain trademark protection across numerous designated member states. This means that it is difficult for third parties to use signs similar to the "AB Media" trademark in the relevant classes and derivative fields of these countries, which greatly reduces the risk of its trademark being infringed upon in the international market. By combining Madrid international trademark registration with defensive trademark registration covering relevant classes and derivative fields in China, AB Entertainment can establish a comprehensive, multi-tiered trademark protection system, effectively safeguard its own brand rights and interests worldwide, and build a solid legal barrier for its international business expansion.

(II) Recommendations for Other Enterprises

1. Conduct prior trademark searches to avoid infringement risks: Prior to the registration of an enterprise name, the enterprise shall proactively and comprehensively search for the existence of prior trademarks that are identical or similar to the proposed name. The search may be carried out via the official website of the Trademark Office of the China National Intellectual Property Administration or professional trademark search databases, to ensure that the selected enterprise name does not infringe upon the trademark rights of others, and avoid infringement risks at the source.

2. Develop Unique Trade Names and Mitigate Rights Conflicts The originality of trade names shall be emphasized, and trade names with unique creativity and distinct characteristics shall be adopted as far as possible. Names similar to well-known trademarks or trade names of other enterprises shall be avoided, so as to reduce the possibility of conflicts with the prior rights of others. A unique trade name can not only reduce the risk of infringement, but also help enterprises establish a unique brand image in the market.

3. Respond to Warnings Timely to Mitigate Legal Liabilities If an enterprise receives an infringement warning, it shall attach great importance to such warning and conduct verification in a timely manner. Once it is confirmed that its own enterprise name may constitute infringement, the enterprise shall resolutely and promptly change its enterprise name, so as to avoid further escalation of the infringement caused by delay and thus incurring heavier legal liabilities.

4. Leverage professional expertise to ensure legality and compliance: Prior to the registration of enterprise names, it is recommended that enterprises consult professional lawyers to carry out a comprehensive legal risk assessment. Equipped with professional legal knowledge and abundant practical experience, lawyers can help enterprises analyze potential legal risks of the proposed names and provide reasonable amendment suggestions, so as to ensure the legality and compliance of enterprise names.

V. Conclusion

Conflicts between trademarks and trade names are common legal issues encountered by enterprises in the course of business operation, and such conflicts are even more prevalent in highly competitive industries such as the culture and entertainment sector. As can be seen from the in-depth analysis of the AB Entertainment trademark infringement case, well-known trademarks are granted a high level of protection under the current legal framework, and enterprise names that are highly similar to well-known trademarks carry a high risk of infringement. Therefore, enterprises shall raise their legal awareness, attach great importance to intellectual property right protection, and avoid getting involved in legal disputes due to name-related issues. Meanwhile, with the constant changes of the market environment and the continuous advancement of enterprise innovation, conflicts between trademarks and trade names are also becoming increasingly complex and diverse. This requires the legislature to further improve relevant legal rules, provide clearer and more explicit guidance for enterprises, and promote fair competition and sound development of the market.