Guiding Case No. 29

Tianjin China Youth Travel Service v. Tianjin Guoqing International Travel Agency, A Dispute over an Unauthorized Use of Another’s Enterprise Name

CGCP Annotations

Full Text of the Guiding Case

Keyword(s)

Main Points of the Adjudication

1. An abbreviated enterprise name that has been widely used externally by an enterprise for a long period of time, that has a certain degree of market visibility and is known to the relevant public, and that actually already functions as a trade name, may be regarded as an enterprise name and [thus] be protected [under law].

2. Where, without authorization, [a business operator] uses another’s abbreviated enterprise name, which actually already functions as a trade name, as an Internet bid-for-ranking [1] eyword in business activities, causing the relevant public to be confused and to misidentify [the enterprise], [the unauthorized use of the abbreviated enterprise name] is an act of unfair competition.

1. Article 120 of the General Principles of the Civil Law of the People’s Republic of China

2. Article 5 of the Anti-Unfair Competition Law of the People’s Republic of China

Basic Facts of the Case

Plaintiff Tianjin China Youth Travel Service (天津中国青年旅行社) [2] (hereinafter referred to as “Tianjin Qinglü”) claimed: defendant Tianjin Guoqing International Travel Agency Co., Ltd. (天津国青国际旅行社有限公司) illegally used the plaintiff’s full enterprise name and abbreviated name, “Tianjin Qinglü”, on [the defendant’s] copyrighted webpage and in its website source code and search engine, violating the provision(s) of the anti-unfair competition law. [3] [The plaintiff] requested that the defendant be ordered to immediately cease its act of unfair competition, publicly apologize, pay RMB 100,000 in compensation for economic losses, and bear the costs of the litigation.

Defendant Tianjin Guoqing International Travel Agency Co., Ltd. (hereinafter referred to as “Tianjin Guoqinglü”) defended its position, claiming: [the abbreviated name] “Tianjin Qinglü” was not registered and was [thus] not owned by the plaintiff. The plaintiff’s claimed losses were not based on facts or law, [and the defendant therefore] requested that the court reject the plaintiff’s litigation claims.

The court handled the case and ascertained: Tianjin China Youth Travel Service, which was established on November 1, 1986, was a state-owned enterprise engaged in the business of domestic and inbound and outbound tourism and was directly subordinate to the Communist Youth League Tianjin Committee. The Communist Youth League Tianjin Committee had issued a certificate stating that “Tianjin Qinglü” was the abbreviated enterprise name of Tianjin China Youth Travel Service. In 2007, Jin Wan Bao [4] and other media [outlets] began using the abbreviated name “Tianjin Qinglü” to refer to Tianjin China Youth Travel Service when reporting on activities undertaken by Tianjin China Youth Travel Service. In its quotation sheets, travel contracts, collaboration documents [signed] with business operators in the same industry, invoices, and other materials, as well as daily business activities, including [advertising on] signboards on its business premises, [Tianjin China Youth Travel Service] used “Tianjin Qinglü” as the abbreviated name of the enterprise. Established on July 6, 2010, Tianjin Guoqing International Travel Agency Co., Ltd. was a limited liability company engaged in such business as domestic tourism and inbound tourism reception.

At the end of 2010, Tianjin Qinglü discovered that when “Tianjin China Youth Travel Service” or “Tianjin Qinglü” was searched on Google’s search engine, the top-ranked search result and the area used to indicate sponsors’ links respectively displayed

[t]he Internet business office of Tianjin China Youth Travel Service www.lechuyou.com Tianjin Guoqing online business office is your ideal choice and provides excellent quality, caring, and pleasant service for your trips

and

[t]he Internet business office of Tianjin Qinglü www.lechuyou.com Tianjin Guoqing online business office is your ideal choice and provides excellent quality, caring, and pleasant service for your trips.

When the link [www.lechuyou.com] was clicked, it led to a website entitled Tianjin Guoqing International Travel Agency Lechuyou. At the top of the webpage were words like “Tianjin Guoqing International Travel Agency—Youth Travel Agency Qinglü/Tianjin Guolü”. The webpage’s content included business information and pricing for Tianjin Guoqing Travel. The website copyright [was attributed to] Lechuyou Net−Tianjin Guoqing and [the website] listed the contact telephone number and business address of Tianjin Guoqinglü. Meanwhile, when Tianjin Qinglü searched “Tianjin Qinglü” on Baidu’s search engine, the top-ranked search result and the area used to indicate promotional links displayed

[w]elcome to Tianjin Qinglü, a trustworthy business entity, bringing together classic domestic and outbound tour routes, 100% of tours [organized], Tianjin Qinglü 400-611-5253 022.ctsgz.cn.

When the link was clicked, it again led to the aforementioned website entitled Tianjin Guoqing [International Travel Agency] Lechuyou.

Results of the Adjudication

On October 24, 2011, the No. 2 Intermediate People’s Court of Tianjin Municipality rendered the (2011) Er Zhong Min San Zhi Chu Zi No. 135 Civil Judgment:

1. [the court orders] defendant Tianjin Guoqing International Travel Agency Co., Ltd. to immediately cease the infringing act;

2. [the court orders] the defendant to publish, within 30 days of the judgment’s coming into effect, a statement of apology on its company website for 15 days;

3. [the court orders] the defendant to pay plaintiff Tianjin China Youth Travel Service RMB 30,000 as compensation for economic losses;

4. [the court] rejects the plaintiff's other litigation claims.

After the judgment was pronounced, Tianjin Guoqinglü appealed. On March 20, 2012, the Higher People’s Court of Tianjin Municipality rendered the (2012) Jin Gao Min San Zhong Zi No. 3 Civil Judgment:

1. [the court] upholds Items 2, 3, and 4 of the aforementioned civil judgment [rendered by] the No. 2 Intermediate People’s Court of Tianjin Municipality;

2. [the court] alters Item 1 [of the judgment] from “[the court orders] defendant Tianjin Guoqing International Travel Agency Co., Ltd. to immediately cease the infringing act” to “[the court orders] defendant Tianjin Guoqing International Travel Agency Co., Ltd. to immediately cease using the words ‘Tianjin China Youth Travel Service’ and ‘Tianjin Qinglü’ and [cease using the aforementioned words] as the search link keywords for Tianjin Guoqing International Travel Agency Co., Ltd.’s website”;

3. [the court] rejects the defendant’s other claims for appeal.

Reasons for the Adjudication

In the effective judgment, the court opined: [5] Article 6, Paragraph 1 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Handling of Unfair Competition Civil Cases [6] provides:

An enterprise name that has been registered in accordance with law with the authority in charge of enterprise registration, or a foreign (regional) enterprise name that is in commercial use within the territory of China, should be deemed to be an “enterprise name” [as set forth in] Article 5, Item (3) of the anti-unfair competition law. A shop name within an enterprise name that has a certain degree of market visibility [and] that is known to the relevant public may be deemed to be an “enterprise name” [as set forth in] Article 5, Item (3) of the anti-unfair competition law.

Therefore, an abbreviated enterprise name that has been widely used externally by an enterprise for a long period of time, that has a certain degree of market visibility and is known to the relevant public, and that actually already functions as a trade name, should also be regarded as an enterprise name and [thus] be protected [under law]. As “Tianjin China Youth Travel Service” was the enterprise name that had been used by the plaintiff since its establishment in 1986, the plaintiff enjoyed an exclusive right to use the enterprise name. As an abbreviated enterprise name, “Tianjin Qinglü” had been widely used in [Tianjin China Youth Travel Service’s] business activities since 2007. Relevant publicity reports and clients had also used “Tianjin Qinglü” to refer to Tianjin China Youth Travel Service. Through many years of use and publicity in [its] business activities, the [abbreviated enterprise name] had already [come to] enjoy a certain degree of market visibility, be known to the relevant public, have a stable affiliated relationship with Tianjin China Youth Travel Service, and have the significance of a commercial mark that can identify its business operator. Therefore, “Tianjin Qinglü” could be regarded as an enterprise name and [thus] be protected along with “Tianjin China Youth Travel Service”.

Article 5, Item (3) of the Anti-Unfair Competition Law of the People’s Republic of China provides that when engaging in market transactions, business operators must not adopt unfair means to harm their competitors, including using, without authorization, another’s enterprise name to cause others to mistake their products for those [of the other]. Therefore, where, without authorization, a business operator uses another’s enterprise name or abbreviated enterprise name as an Internet bid-for-ranking keyword, causing the public to be confused and to misidentify [the enterprise], and uses another’s visibility and goodwill to achieve the goal of publicizing and promoting itself, [these acts] are acts of unfair competition and should be prohibited.

As a business operator engaged in travel services, Tianjin Guoqinglü, without Tianjin Qinglü’s authorization, used various means, including saving keywords that were related to Tianjin Qinglü’s enterprise name on relevant search engines and then using [those keywords] in website source code, to cause Tianjin Guoqinglü’s website link to appear directly when the relevant public searched for “Tianjin China Youth Travel Service” and “Tianjin Qinglü”. As a result, [the relevant public] was directed to inquire about travel services on Tianjin Guoqinglü’s website, which had the effect of using the initial confusion of [these] Internet users to compete for potential customers. [Tianjin Guoqinglü], subjectively, had the intent to cause the relevant public to become confused and to misidentify [the enterprise] in [its] Internet searches and inquiries. [Tianjin Guoqinglü], objectively, used “Tianjin China Youth Travel Service” and “Tianjin Qinglü” without authorization, [thereby] making use of Tianjin Qinglü’s corporate reputation to harm Tianjin Qinglü’s legal rights and interests. [Tianjin Guoqinglü’s] acts were [therefore] acts of unfair competition and should be stopped in accordance with law.

As Tianjin Qinglü’s competitor in the same industry, Tianjin Guoqinglü, being fully aware that Tianjin Qinglü’s enterprise name and abbreviated name had higher visibility, still used [those names] without authorization and had the intent to borrow another’s name to seek improper benefits for itself, and [thus] its subjective bad faith was obvious. According to Article 120 of the General Principles of the Civil Law of the People’s Republic of China, [7] Tianjin Guoqinglü should be legally responsible for ceasing the infringement, eliminating the effects [of such acts], and [paying] compensation for losses. The words “Youth Travel Service Qinglü” displayed at the top of Tianjin Guoqinglü’s website did not fall within the scope of protection of the plaintiff’s enterprise name and [thus the use of those words] did not constitute unfair competition against the plaintiff.

Endnotes

*           The citation of this translation of the Guiding Case is: 《天津中国青年旅行社诉天津国青国际旅行社擅自使用他人企业名称纠纷案》(Tianjin China Youth Travel Service v. Tianjin Guoqing International Travel Agency, A Dispute over an Unauthorized Use of Another’s Enterprise Name), China Guiding Cases Project, English Guiding Case (EGC29), Oct. 20, 2014 Edition, available at https://cgc.law.stanford.edu/guiding-cases/guiding-case-29.

This document was primarily prepared by W.A. Heaton, LUO Min, Jeremy Schlosser, Joelle Tjahjadi, Jennifer Xinyu Zhang, and ZENG Cheng. The document was finalized by Casey Corr, Jordan Corrente Beck, Dimitri Phillips, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects formatting of the Chinese document released by the Supreme People’s Court.

The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China and was released on June 26, 2014, available at http://www.chinacourt.org/article/detail/2014/07/id/1334430.shtml. See also《最高人民法院关于发布第七批指导性案例的通知》 (The Supreme People’s Court’s Notice Concerning the Release of the Seventh Batch of Guiding Cases), June 26, 2014, available at http://rmfyb.chinacourt.org/paper/html/2014-07/05/content_84234.htm?div=-1.

[1]           Translators’ note: “Internet bid-for-ranking” (“竞价排名”) is a means of bidding for a higher position on an online search results page. For more information on the topic, see http://baike.baidu.com/view/40571.htm.

[2]           Translators’ note: the name “天津中国青年旅行社” is translated here as “Tianjin China Youth Travel Service” in accordance with the translation used on the company’s website, at http://www.tjcyts.com/.

[3]        Translators’ note: the term “反不正当竞争法” (“anti-unfair competition law”) as used several times in this Guiding Case likely refers to 《中华人民共和国反不正当竞争法》 (Anti-Unfair Competition Law of the People’s Republic of China), adopted on Sept. 2, 1993 and effective as of Dec. 1, 1993, available at http://www.gov.cn/banshi/2005-08/31/content_68766.htm.

[4]           Translators’ note: the name “今晚报” (literally, “Evening News”) is translated here as “Jin Wan Bao” in accordance with the translation used on the company’s website, at http://epaper.jwb.com.cn/jwb/html/2014-07/21/node_2.htm.

[5]           Translators’ note: the Chinese text does not specify which court opined. Given the context, this should be the Higher People’s Court of Tianjin Municipality.

[6]           Translators note: 《最高人民法院关于审理不正当竞争民事案件应用法律若干问题的解释》 (Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Handling of Unfair Competition Civil Cases), adopted by the Adjudication Committee of the Supreme People’s Court on Dec. 30, 2006 and effective as of Feb. 1, 2007, available at http://www.court.gov.cn/qwfb/sfjs/201006/t20100609_5953.htm.

[7]           Translators’ note: 《中华人民共和国民法通则》 (General Principles of the Civil Law of the People’s Republic of China), adopted on Apr. 12, 1986, effective as of Jan. 1, 1987, amended on Aug. 27, 2009, available at http://www.dffyw.com/faguixiazai/msf/200311/20031110212803.htm.