HongFangLaw ~ HFL Events ~ n’ 75
25 January 2019

SHIP Court: The use of “LAN ZHI SHUI KU / LΛNEIGE” in Class 18 infringes upon the well-known trademark “LANZHI / LΛNEIGE” in Class 3

Case Docket:

  • Civil Judgments Nos. (2017) H73MC394 & 395

Competent Attorneys:

  • Eric Su, lawyer of Shanghai Hong Fu Law Firm (for cases nos. 394 & 395)
  • Kayla Sun, lawyer of Shanghai Hong Fu Law Firm (for case no. 394)
  • Karen Hao, lawyer of Shanghai Hong Fu Law Firm (for case no 395)

Parties Concerned:

  • Defendant I: LANZHI (SHANGHAI) LEATHERWARE CO., LTD (hereinafter “LAN ZHI CO.”)
  • Defendant II: ZHOU XIAOJUN

Case Overview:

The Plaintiff AMORE PACIFIC CORPORATION owns the registered trademarks “兰芝” (read and hereinafter “LAN ZHI”, an equivalent of “LΛNEIGE”, hereinafter “LAN ZHI”), “LΛNEIGE” etc. on cosmetics in Class 3. The trademarks have acquired well-known status in the relevant domain after continuous and extensive use and advertising in the Chinese Mainland. “AMOREPACIFIC” as the plaintiff’s trade name has also established a certain degree of visibility in the market. Meanwhile, the Defendants LAN ZHI CO., ZHOU XIAOJUN, and AIMOLI LTD. are respectively the manufacturer, the distributor and the licensor for the “兰芝水库 / LΛNEIGE” (read and hereinafter “LAN ZHI SHUI KU”, meaning “LAN ZHI Water Bank”) branded women’s bags. The individual ZHOU XIAOJUN is the one and only shareholder and the legal representative/director of the companies sued. The Defendants were using marks identical or similar to the plaintiff’s “LAN ZHI” and “LΛNEIGE” on leather wears in Class 18 and advertising the products as associated with “爱茉莉太平洋” (an equivalent of “AMOREPACIFIC”) on social media platforms (Weibo, WeChat).

In the Plaintiff’s lawsuits against the infringements, we Shanghai Hong Fu Law Firm (HongFangLaw) helped the brand owner win over the first-instance court, in the Shanghai Intellectual Property Court (SHIPC). It is held that “LAN ZHI” and “AMOREPACIFIC” are well-known trademarks on cosmetics, and “AMOREPACIFIC” enjoys considerable popularity in the market; thus the Defendants’ activities surrounding “LAN ZHISHUI KU / LΛNEIGE” has constituted infringement upon the Plaintiff’s exclusive rights to its well-known trademarks; the Defendants were also found with unfair competition by infringing upon the Plaintiff’s trade name. With two causes involved at the same time, the disputes offer much to be learned.

Examination Opinion:

  • Considerating that the Defendant III AIMOLI LTD. holds the registered trademark No. 3648074 “LANEIGE” in Class 18, does the use by the Defendants of “LΛNEIGE” on relevant goods still constitute an infringement of the Plaintiff’s well-known trademark “LΛNEIGE” in Class 3?

The Defendants have been using the same mark as the Plaintiff’s registration “LΛNEIGE” instead of the trademark No. 3648074 “LANEIGE” held by the Defendant III on the Sued Products. Combined with the Defendant’s bad faith to be elaborated in the following paragraphs, as well as the high degree of confusion and the damages to the Plaintiff that may arise from the trademark use, the Defendants should be deemed infringing upon the well-known trademarks by using “LΛNEIGE” on women’s bags.

  • Are the trademark infringement and unfair competition joint violations by the three Defendants?

According to the SHIPC, the three Defendants, while aware of the well-known status of “LANZHI” and “LΛNEIGE”, still conspired to jointly copy, imitate and use the plaintiff’s trademark and company name that had established certain influence. In the specific:

  • The Defendants were jointly engaged in the operations related to the Sued Products, during which there was obvious convergence of intention on the use of any company names and marks.

(LAN ZHI CO., AIMOLI LTD. were both founded by ZHOU XIAOJUN who is the one and only shareholder and legal representative of LAN ZHI CO., and the one and only shareholder and director of AIMOLI LTD. Absent contrary evidence, it is reasonable to attribute the sued companies’ business to ZHOU’s management and decision-making.)

  • The Defendants had malicious intentions to mislead the relevant public to associate the Sue Products with the Plaintiff during their joint operations:

1) ZHOU XIAOJUN had registered AIMOLI PACIFIC GROUP LIMITED (Defendant III) which shares a Chinese name with AMOREPACIFIC; the namesake was being advertising as the licensor for the Sued Products during the Defendants’ commercial activities;

2)The Defendants were constantly using “LAN ZHI” and “LΛNEIGE” side by side, which had come to indicate that the names were mutually referential and exchangeable;

3)?The Defendants were promoting the Sued Products with the slogans: “LANEIGE Giveaway! LAN ZHI lotions and handbags for free”, “In the past 20 years, LAN ZHI has made a number of miracles in skincare … and now officially launches a new handbag series”;

4)?The Defendants were using images of the Korean actress Song Hye-Kyo who had been adopted by the Plaintiff as the face of the “LAN ZHI” and “LΛNEIGE” branded cosmetics;

5)?The trademark “LANZHI SHUI KU” registered by ZHOU XIAOJUN shares the same pronunciation with a product of the Plaintiff’s.

HFL Comments:

  • In our opinion, though the Plaintiff III has the registered trademark No. 3648074 “LANEIGE” in Class 18, it has changed the reproduction in actual use to the extent that the mark becomes a blatant copy of the plaintiff’s well-known trademark “LΛNEIGE” in class 3. Despite the seemingly subtle difference, the distinctive character of the trademark has been altered. In addition, the Defendants are in bad faith in many ways. Their use of “LΛNEIGE” is therefore not legal trademark use.
  • Similarly, there are a number of mal-intentioned business operators at large who attempt to register marks similar to famous brands by all means and go on to use them in even more confusing ways with alterations. This constitutes blatant trademark infringement and should be resisted in commercial practice.

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