Dacheng Attorney Wins Suit on Accused Trademark Infringement for Suning Commerce Group

Early this year, Tesco PLC’s China branch filed lawsuits against Loax, a brand name owned by Sunning Commerce Group, on charges of trademark infringement in Beijing Fengtai District People’s Court, Nanjing Gulou District People’s Court and Shanghai Yangpu District People’s Court. At the same time, Tesco PLC also raised oppositions to eighteen trademarks owned by Loax at a local trademark bureau.
 
The plaintiff Tesco PLC is the world’s leading grocery retailer with more than a hundred shops in the Chinese mainland, the number of which is still growing at a magnificent pace. The opposition party Laox is a series of chain stores owned by Suning Commerce Group. Currently, 12 Laox shops have been launched in Chinese cities such as Beijing, Shanghai, Tianjin, Xiamen, etc. Tesco’s Chinese shops use the name of “乐购”, while Laox uses “乐购仕”. The former accused the latter’s use of shop mark and name of being familiar with its own and causing confusion for consumers and thus should be counted as act of trademark infringement and unfair competition. Dacheng senior partner Wang Zhangwei was retained as defense lawyer for the defendant Laox in court trials and for replying to oppositions in the trademark bureau.
 
On June 26 2013, Beijing Fengtai People’s Court, by comparing elements and testing likelihood of confusion, found that the trademark of “乐购仕” and “乐购” did not constitute similar trademarks, nor the marks with new elements added to the three characters similar to the marks for which Tesco PLC requested protection. The first instance court thus ruled that the charges from Tesco PLC were not valid and shall not be supported.
 
The plaintiff appealed to a higher court but withdrew the appeal in September 2013, as well as claims in local courts of Nanjing and Shanghai. Therefore, the Fengtai court’s decision came into effect in favor of the defendant. The trademark bureau also rejected Tesco PLC’s oppositions and gave approval to the registration of the trademark “乐购仕”.
 
In 2009, to carry forward its internationalization strategy and domestic marketing reform, Suning Commerce Group acquired Japan’s Laox Co., Ltd., the original owner of a series of “Laox” trademarks. Following the acquisition, all wholly-owned subsidiaries of Suning were authorized to use the trademarks. “乐购仕” is a transliteration of “Laox”, a Japanese-born trademark with a long history in its home country. Together with “苏宁”, “乐购仕” has grown into a symbol of a high-end retailer in China managed by Suning and gained much reputation among Chinese consumers since it was launched and promoted in the market.
 
The case, reported by China Intellectual Property News, Beijing Times and other Internet media, caused a stir in the legal profession. The significance of it lies in factors that should be considered in determining whether a trademark infringement is valid. Apart from comparing proximity in components such as pronunciation, form and meaning of relevant marks, we should also look at the likelihood of confusion, distinctiveness of relevant marks, actual use, intent in selecting the marks and their origins. In this case, the defense lawyer not only explained to the court the differences in pronunciation, form and meaning between trademarks “乐购仕” and “乐购”, but also debated the lack of distinctiveness of “乐购”, origin of “乐购仕” and the mark’s evolution in China, the deliberate differentiation of goods and service provider in actual use of the mark, the huge amount of marketing, promotion and use of the mark and the degree of care exercised by consumers in seeing the two marks. Based on large quantities of evidence, the defense side managed to prove that the trademark “乐购仕” has its own origin, distinctiveness and originality, distinguishing itself from “乐购” in terms of image, components, meaning and vocative effect. Besides, the constant use and marketing of “乐购仕” had accumulated reputation and influence for the mark and the fact that the two marks target on different consumer groups ruled out the possibility of consumers connecting the two trademarks, mistaking one for another or going to the wrong shops. In the end, the court rejected all claims brought up by the plaintiff and accepted the defense lawyer’s opinions.