The Suzhou Intermediate Court recently concluded a trademark infringement lawsuit between the appellant Hangzhou Lunfude Chassis Technology Co., Ltd. ("Lunfude"), the appellee Suzhou Deyu Auto Parts Co., Ltd. ("Deyu"), and the third party ZF Sales Service (China) Co., Ltd. ("ZF Sales"). The court found that in view of factors such as ZF Sales and its affiliates' prior right status, the legitimacy of use and intent to use, and Lunfude's registration was based on bad faith, Lunfude's infringement claims shall not be supported.
The second instance court found that before Lunfude applied for
the cited mark, ZF Sales and its affiliates had used the "
" and "
" marks extensively on their control arms
and other auto parts products and had marked "LEMFORDER"
in a reasonable manner and with other trademarks. ZF Sales's
use constituted as prior good faith use. ZF has a high reputation
in the auto parts industry and its products are widely used in
vehicles, ships, and construction machinery vehicles. Although it
has not registered the said marks in China, after years of market
operation and comprehensive consideration of other factors such as
the continuous time of use, region, sales volume and publicity of
the said marks, the first instance court determined that the said
marks enjoyed a certain influence. Before Lunfude applied to
register the cited mark, ZF Sales already had a high reputation in
the industry. According to the evidence, ZF Sales has entered the
Chinese market in 1988 and many news had reported that ZF Sales and
its affiliates has occupied in the leading position in the
automotive parts and chassis technology industries. Its goodwill
covers a wide range of industries. The "" and "" marks in this case are all used for
vehicle parts products, so ZF Sale's use does not exceed the
original scope of use. In summary, the first instance court found
that ZF Sales had a legitimate basis for prior rights and was not
inappropriate.
The authorization letter and purchase and sale list and other
evidence submitted by Deyu were sufficient to prove that the
allegedly infringing products it sold originate from ZF Sales, and
ZF Sales has also confirmed it. Therefore, as a seller, Deyu has
the right to use "" and "" marks on the products sold by ZF Sales
on the premise that ZF Sales has legal prior rights in the accused
infringing products. Thus, Deyu did not infringe Lunfude's
trademarks.
Lunfude's corporate name has a similar pronunciation to the "LEMFORDER" brand name of ZF Sales. It has applied for registration of more than a hundred trademarks that are highly similar to the trademarks of ZF Sales and its affiliated companies in multiple classes, which are beyond the needs of normal business operations. ZF Sales has repeatedly opposed Lunfude's applications, and the CNIPA has repeatedly declared its registered trademark invalid because it "violates the principle of good faith and disrupts the order of trademark registration management." In this case, the CNIPA has declared Lunfude's trademark invalid on the grounds that it has "the subjective intention to take advantage of others' market reputation and violates the principle of good faith." Lunfude's trademarks are similar to ZF Sale's prior marks. Therefore, Lunfude has a subjective intention to take advantage of ZF Sale's market reputation. Lunfude's action violated the principle of good faith, and the first instance court was not inappropriate in not supporting its claim on the grounds that it constituted an abuse of rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
