Background

COFCO Corporation, the biggest importer and exporter of grain, oil and food in China as well as a powerful food producer, enjoys great prestige in the international grain, oil and food market. As a Fortune Global 500 enterprise, it has achieved great success in areas closely related to public life, such as trade in agricultural products, bio-energy development, food manufacturing, real estate, property, hotel operation and financial services.

"Joy City", an "international youth urban complex" well-planned and carefully orchestrated by the commercial property sector of COFCO Corporation, positions itself as having features attractive to young people like fashion, popularity, sexiness and being trendy, and is a masterful example of modern and large-scale shopping malls. At present, shopping malls of the "Joy City" series have been built in two locations in Beijing, as well as in Shanghai, Tianjin, Shenyang, Chengdu and Yantai, and "Joy City" has become a core brand for the real estate business of COFCO Corporation. "Joy City" is also one of the trademarks registered in China by COFCO Corporation. Presently COFCO Corporation owns the trademarks of "大悦城" ("Joy City"), "JOY CITY", figure "大" ("Big") under the 35th and 36th categories of service and service items.

In 2011 COFCO Corporation found that Pingdingshan Chang Lü Longhua Property Co., Ltd. and Henan Chang Lü Group Property Co., Ltd. (hereinafter referred to as the "Chang Lü Group") had used the logos of "常绿·大悦城" ("Chang Lü - Joy City") and "JOY CITY" for buildings developed by them. In response to such infringements, COFCO Corporation decided to take legal action and entrusted Kangxin in Lawyers to file a trademark infringement lawsuit against Chang Lü Group.

Process

The key points of this case were: (i) whether "常绿·大悦城" ("Chang Lü - Joy City" in  was used as a place name or as a trademark; (ii) "常绿·大悦城" ("Chang Lü - Joy City" in Chinese) was used by Chang Lü Group for its commercial residential buildings, while COFCO Corporation’s trademarks are all registered under the category of service, so what strategy should be used to build the case that Chang Lü Group’s acts had constituted trademark infringement?

As for these key points, Kangxin Lawyers carried out rigorous legal analysis and argument before the court session opened and forcefully made their case during the trial as follows:

(1) The use of "常绿·大悦城" ("Chang Lü - Joy City") and "JOY CITY" by Chang Lü Group constitutes trademark use in the sense of the Trademark Law.

Chang Lü Group used "常绿·大悦城" ("Chang Lü - Joy City") for its buildings and used "大悦城" ("Joy City") and "JOY CITY" in its advertisements, promotions and sales activities with regard to such buildings on a large scale. The name of a building is the most important identification mark to differentiate one real estate project from another and functions to differentiate the origin of commercial residential buildings. Chang Lü Group’s use of "常绿·大悦城" ("Chang Lü - Joy City") as the name of its goods, i.e. its commercial residential buildings, and use of "大悦城" ("Joy City") and "JOY CITY" in its advertisements and promotions of such goods as a logo to differentiate the origin of its commercial residential buildings, and use of "大悦城" ("Joy City") and "JOY CITY" in its sales services of commercial residential buildings, all constituted trademark use in the sense of the Trademark Law.

In accordance with Article 3 of the Administrative Regulations on Place Names issued by the State Council, "the regulation of place names shall aim to maintain the relative stability of place names in consideration of the history and current status of place names in China. When a name or change to a name has to be made, application for approval shall be obtained according to the principles and approval authority specified herein. No unit or individual may make a decision without authorization and approval". Chang Lü Group claimed "大悦城" ("Joy City") is a place name, but it actually didn’t obtain approval for the place name. Furthermore, even if it had obtained approval, it couldn’t fight the prior trademark right of COFCO Corporation.

(2) Chang Lü Group’s use of the trademark "大悦城" ("Joy City") and "JOY CITY" for its commercial residential buildings and sale thereof constituted infringement of others’ trademark on the same and similar goods or services.

The No. 6345086, No. 5796916 and No. 6345085 registered trademarks of COFOC Corporation are approved to be used in services like "sale of commercial residential buildings and real estate management". Article 4 of the Opinions on Issues concerning Service Trademark Protection issued by the Trademark Office states: "Where acts of service and goods used to provide the service are specifically related, the service is deemed similar to the goods used to provide the service."

In accordance with the Schedule for Differentiating Similar Goods and Services, no goods trademark can be obtained for commercial residential buildings, and only service trademarks can be obtained therefor. The Trademark Office under the General Administration for Industry and Commerce had stated in the Reply to Questions concerning How to Determine the Category of "Commercial Residential Building": "with respect to trademark applications for commercial residential buildings, only service trademarks under the 36th and 37th categories can be applied for in relation to building services or sales services." In this case, the real estate enterprise could only register the name of its buildings as a service trademark under the 36th category, which, despite being registered as a trademark in the service category, still points to the commercial residential buildings themselves. 

In addition, the service of commercial residential buildings and the commercial residential buildings are specifically related, as the former cannot exist without the latter and the sales services of commercial residential buildings must be attached to the commercial residential buildings and point to the commercial residential buildings. In daily life, it’s difficult for the relevant public to differentiate the origin of a commercial residential building from the origin of the sales services of such commercial residential building.

In the trademark infringement case of China World Trade Center Co., Ltd. vs Beijing ShiQiao Real Estate Development Co., Ltd., judgments of the court of first instance (Chaominchuzi [2005] No. 3308) and the court of second instance (Erminzhongzi [2005] No. 11995) all determined that the development and sales services of the real estate project of the latter came under the same category as the services "sale of a commercial residential building, real estate management" for which the former’s registered trademark was approved to be used.

Results

The People’s Court of Haidian District, Beijing, the court of first instance of this case, made a decision in favour of Kangxin lawyers’ client. The judgment was as follows:

I. The defendants, Pingdingshan Chang Lü Longhua Property Co., Ltd. and Henan Chang Lü Group Property Co., Ltd. must immediately stop their infringements;

II. The defendants, Pingdingshan Chang Lü Longhua Property Co., Ltd. and Henan Chang Lü Group Property Co., Ltd. must publish an announcement in the Pingdingshan Daily regarding their trademark infringements and eliminate ant ill effects caused to the plaintiffs, COFCO Corporation and COFCO Property Management Co., Ltd.;

III. The defendant, Pingdingshan Chang Lü Longhua Property Co., Ltd. must compensate the plaintiffs, COFCO Corporation and COFCO Property Management Co., Ltd., for their economic losses and reasonable costs totalling CNY240,000, and the defendant, Henan Chang Lü Group Property Co., Ltd., must be jointly and severally liable for part of the compensation, namely CNY100,000;

The defendants were dissatisfied with the first instance judgment and filed an appeal with the First Intermediate People's Court of Beijing. The First Intermediate People's Court of Beijing upheld the first instance judgment.

Comments

The difficulty of this case was that the name of a building is usually registered as a place name; therefore, an alleged infringer will defend himself by arguing that the building name is used as a place name rather than a trademark. Moreover, the category table of goods and services doesn’t include an item for commercial residential buildings, and the real estate company has to register a trademark in the service class; hence there are many controversies in theory and in practice regarding whether a service trademark registered by a real estate company can be extended to cover the names of commercial residential buildings. In this case, Kangxin lawyers carried out detailed analysis of the facts of the case and relevant laws. We made a forceful legal argument regarding the focus of the dispute in this case by considering the particularity of registered trademarks in the real estate industry and the usage mode of trademarks in the real estate industry in practice. We built the case by arguing that the use of the trademarks "大悦城" ("Joy City") and "JOY CITY" by Chang Lü Group for its commercial residential buildings constituted a use of trademark rather than place name, and that Chang Lü Group’s use constituted use of COFCO Corporation’s registered trademark on the same or similar goods/services, thus constituting trademark infringements. Kangxin Lawyers finally won the lawsuit and successfully safeguarded the legitimate rights and interests of our client.