The Jinhua Intermediate Court of Zhejiang Province concluded an unfair competition lawsuit between Guangdong Kuai Ke E-Commerce Co., Ltd. ("KK") and Yiwu Sanwei Brand Management Co., Ltd. ("Yiwu Sanwei") and Yongkang Sanwei Household Products Store ("Yongkang Sanwei") and other three defendants. The court ordered the five defendants to immediately stop the unfair competition acts that infringed on the service decoration of KK. The five defendants shall compensate KK for its economic losses and reasonable expenses incurred to stop the infringement in a total of RMB1.1 million (USD151,000). Recently, the Zhejiang High Court made a final judgment that dismissed the appeal and affirmed the lower court's judgment.
The first instance court reasoned that the decoration of goods under the Anti-Unfair Competition Law also applies to the decoration of services. In this case, the evidence provided by KK proved that the bright yellow walls, rainbow walls and other decoration elements used in the store decoration design and the advertising slogan "Exquisite Life Collection" are significantly different from existing similar stores. Through the store decoration design in Beijing, Guangzhou, and Shanghai, it was widely used in stores across the country such as, Chongqing, Chengdu, Wuhan, Changsha, and other places. It has great influence and can enable the relevant public to form a fixed connection with KK. Taking into account factors such as the degree of awareness of the relevant public, the time, area, amount and target of sales, the duration, extent and geographical scope of publicity, the status of trademark protection, etc., it should be determined that the decoration design of the KKV store opened by KK has constituted service decoration with certain influence.
Yiwu Sanwei used identical or similar logo as KK, which has a certain influence on the Internet and physical investment promotion. In addition to online investment promotion and use, the unified decoration design was also authorized offline to a number of franchisees including the four defendants such as Yongkang Sanwei, which caused the relevant public to misunderstand the decoration value of the V.V.V brand and the store opening status, mistaken that there was a specific association with KK, and constituted unfair competition. Yongkang Sanwei used design elements including a bright yellow iconic exterior wall, a container-shaped main wall, white and yellow product shelves, yellow and white employee clothing, and yellow and black billboards. Judging from the overall visual effect, the similarity between the two may easily cause the relevant public to misunderstand the source of the service and mistakenly believe that the retail services provided by it have a specific connection with KK, which constituted unfair competition.
Regarding the appellant's appeal, the bright yellow color used in KKV's store is a popular color and does not form a unique combination of patterns or design, so it is not original. The second instance court held that the service decoration protected by law does not necessarily have originality, but is often reflected in the overall business image composed of the operator's unique style and decoration of the business premises, catering utensils and sales staff clothing. This overall image is significantly different from existing stores with similar services and can enable the relevant public to closely and stably associate the store decoration with the service provider.
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