In February 2023, Decathlon (Shanghai) Sports Goods Co., Ltd. won a 1st instance case in a civil litigation against Guangdong Camel Clothing CO., LTD, a well-known domestic outdoor sports brand company, for unauthorized use of several distinctive elements, such as logo, product name, packaging, decoration, and particularly for imitating the store design and decoration.
Beijing Shijingshan People's Court awarded Decathlon of 2.94 million RMB in damages and 350,000 RMB for expenses and required the defendants to eliminate the impact of the unfair competition publishing a statement in the China Intellectual Property News for four consecutive weeks.
Decathlon officially entered the Chinese market in 2003, and by 2021 had 280 Decathlon stores in China. The investment in the design, decoration and logo popularized Decathlon among Chinese consumers enjoying a high reputation and prestige. The plaintiff found that the two defendants opened a sport store whose business image and goods were similar to these of Decathlon, which easily led consumers to be misled.
The Shijingshan People's Court held that the "decoration" protected by the Anti-unfair Competition Law must possess the following elements:
(1) the decoration should have a unique style, and therefore had a certain distinctiveness,
(2) the decoration must be known to consumers and have certain influence through continuous use, publicity, and promotion by business operators before it was put into use, and
(3) the decoration had a stable corresponding relationship with its business operators because the shop's decoration had both distinctiveness and influence.
Specifically, Decathlon claimed that their rights should be based on "overall decoration and decorative style of the storefront" and the overall visual effects formed by 22 store decoration elements in 7 categories.
Based on photos of the stores and comments of the consumers on various e-commerce platforms, Decathlon proved that the whole decoration of its stores, presenting a very distinctive and minimalist industrial style with prominent product decoration as well as the classification of goods and price indication, was precisely copied by the two defendants.
Also, Decathlon store decoration has both the distinctiveness and certain reputation among consumers, so that consumers have formed a relatively unified perception and stable correspondence between the store trade dress and the Decathlon brand.
Shijingshan People's Court explained that the products sold by both parties are mainly outdoor sports commodities: this identifies the contenders as competitors. The crucial element in the case was whether the decoration of the stores operated by both sides were similar. In response to these claims, Decathlon provided a comparison table with more detailed descriptions and pictures of their stores.
The photos above were taken by Decathlon and used as notarized evidence collection. Also, many other pictures were taken by consumers when they came to the stores of both sides for purchasing and uploaded the images to a third-party platform, so the photos used were authentic and credible. Decathlon used the pictures to compare the overall decoration style and specific decoration elements of their stores.
Even if each defendant shop did not have all the decoration elements, the overall style and certain amount of decoration details were similar as well as the detailed characteristics of the specific decoration elements, the main colors, and their combinations, even a variety of posters, the placement of price tags, the way of illustrated layout and therefore, the comparison method adopted by Decathlon was accurate and reliable. Many consumers feel that "the style is similar to Decathlon" and "think that they have gone to Decathlon because the style is really similar" and "a bit like Decathlon" even though they know that they entered the defendant's store and the defendant's brand is also quite famous, which was sufficient to indicate the extent of similarity between the two. Although the store brands of the plaintiff and the defendant are different, the consumers still felt confused and misunderstood and wondered whether Decathlon and the defendants have a business relationship.
Shijingshan People's Court found that the two defendants jointly implemented the activity and should bear the civil liability for stopping the infringement, eliminating the impact, and compensating for losses according to law.
In response to the defense claims of the defendant, the judgment emphasized that while the Anti-Unfair Competition Law protects innovation, it does not prohibit operators from learning from each other, or even imitating to a certain extent. However, it doesn't allow to exceed a reasonable boundary such as copying the whole trade dress including packaging, decoration. Improper use of the business achievements of others for profits clearly violated the principle of good faith and generally recognized business ethics and constituted unfair competition.
Currently, the case is under appeal.
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