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Being necessary conditions to judge unfair competition

“Well-known Commodity” and “Unique Decoration” being necessary conditions to judge unfair competition

 

Clause 2 of Article 5 of “Anti Unfair Competition Law”: Operators not to be allowed to adopt the following unfair means to engage in market transactions, damage to competitors:

(1)…..

(2) unauthorized use of well-known commodities’ specific name, packaging, decoration, or a similar name resulting in confusion and mistaken;

Plaintiff A, a USA corporation named CROCS, Inc. who is the owner of famous “CROCS” and“卡骆驰”brand for footwear; Plaintiff B, CROCS FOOTWEAR (Shanghai) Co., Ltd(hereinafter referred to “CROCS (Shanghai) ”)set up by CROCS, Inc. in 2011 to conduct operations with regard of Crocs brand footwear in China.

 

Defendants, Xiamen Crocs Trading Co., Ltd (hereinafter referred to “XIAMEN CROCS”), Crocs (JINJIANG) Trading Co., Ltd(hereinafter referred to “JINJIANG CROCS”, LIN Zhiyuan, legal representative of XIAMEN CROCS and “JINJIANG CROCS” and Shanghai LAIHONG Trading Co., Ltd (hereinafter referred to “SHANGHAI LAIHONG) who is the distributor of “XIAMEN CROCS “and “JINJIANG CROCS” in ChinaIn October, 2013, the plaintiffs sued the defendants for unfair competition through the use of their unique name, packaging,decoration of a well-known commodity without authorization and false propaganda before Shanghai Second Intermediate People’s Court. The court accepts and hears the case on October 29th, 2013. In the meantime, the plaintiffs sued the defendants for company name infringement and counterfeiting in another two cases. In November, 2013, LIN Zhiyuan filed an application of jurisdiction objection before the court. This jurisdiction objection is finally rejected by Shanghai Higher Court.

In April, 2014, Shanghai Second Intermediate People’s Court held a hearing and rendered the judgment. First, the court holds the opinion that CROCS brand footwear is a well-known commodity in China, however CROCS’s business decoration lacks remarkable characteristics. The presiding judge holds the plaintiff’s store decorations don’t meet the requirements of “Uniqueness” in the Anti Unfair Competition Law as follows: a. white-green based business premise decoration lacks remarkable characteristics; b. hanging way footwear is not unique to the plaintiff; c. CROCS is a registered trademark of the plaintiff, the use of which on the store signs and counter is common in business practice. While the plaintiff’s decoration compositions has a certain design style, yet it is insufficient to enable the public to distinguish the source of goods or service, so it does not comply with the law to well-known commodity unique decoration conditions. The plaintiff claimed business identifiers, materials analysis text, site design, layout, product manuals, advertising content used in business operations which constitutes a lack of relevance, do not meet the requirements prescribed by law. The evidences belong to works or design may seek protection by copyright law and patent law. So, the four defendants act can’t constitute to infringe the plaintiff’s well-known commodity unique decoration. Second, the defendants must stop false propaganda and eliminate the influence onthe newspaper.

This case was selected as one of the top ten of

 

 

 

2015 IP cases by Shanghai court, and it is the world famous footwear brands unfair competition disputes, not only involving many styles footwear appearance of the product itself and the decor of many series products brand, also involving commercial decorating with the brand used in the course of business, also including trademarks, store decoration, graphic design, cartoon, advertising, etc. Facing many commercial factors, how to identify the unique decoration of well-known commodity is not easy in this case.

Judgment on this case gives us a detailed analysis the “unique” of well-known commodity unique identification. The most prominent decoration of many products, the most recognition feature of the decoration may constitute unique decoration. This case’s judgment in favor of further strictly regulating the commercial elements of reference, use, and maintain healthy competition order.

 

-by Jianmei FAN (Christine) of SBZL