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The litigation team of Chispo Law Firm ("Chispo") sued Changli County Xi'an Sea View Hotel ("Xi'an Hotel"), and Beijing Quna Information Technology Co., Ltd. ("Quna Company") concerning the trademark infringement dispute in the first-instance litigation, on behalf of aranya Holding Group Co., Ltd. ("aranya Company"). Upon examination, the Haidian District Court heard this case and has determined that it constituted trademark infringement, Xi'an Hotel is requested to compensate aranya Company for the economic losses of RMB 500,000 and the reasonable expenses of RMB 165,632.
-- Introduction of the Case
"aranya" is a resort community developed by aranya Company in Beidaihe District of Qinhuangdao City. The community is not a traditional real estate project. It includes the restaurants, canteens, tea houses, cafes, bars, hotels, stadiums and horse ranch, etc., the income of aranya's services is over RMB 500 million only in the year of 2018. aranya's service-oriented income has exceeded 500 million. The "Lonely Library" and "Pure White Auditorium" in the aranya community are its iconic buildings. After the promotion of "aranya" by many media, it has become a popular online punch card place for the young people, and has won many honors and enjoyed a high reputation.
aranya Company applied for the application of the trademark "aranya (in Chinese characters)" on the services of "hotels and restaurants" in Class 43 on March 23, 2015, its registration number is 16545248, the period of validity from May 7, 2016 to May 6, 2026. The trademark is still in effect.
aranya Company found that Xi'an Hotel which also locates in Qinhuangdao City of Hebei Province, used the mark "Xi'an aranya Store (Chinese characters)" as its store sign in June 2019; meantime, they used the mark "Gold Coast Xi'an Sea View Hotel (Beidaihe aranya Branch)" on the Qunar website. aranya Company believes that the above-mentioned behavior of Xi'an Hotel will cause the confusion in the market, and some consumers will mistakenly believe that Xi'an Hotel and aranya Company have cooperation and other related relations.
aranya Company sued Xi'an Hotel and Quna Company (Qunar platform) based on the grounds of trademark infringement to Beijing City Haidian District Court in August 2019, and requested the court to order: 1. stop the infringement; 2. The Xi'an hotel publish a statement on the web sites of Qunar, Ctrip, Yilong, and Tongcheng Travel to eliminate the harmful effect; 3. The two defendants jointly compensated the plaintiff for the economic losses of RMB 1.5 million and reasonable expenses of RMB 165632.
Xi'an Hotel asserted that the aranya community was a real estate property; they employed the word “aranya (in Chinese characters)” as a descriptive usage of a geographical location, instead of using it as a trademark. Moreover, Xi’an Hotel has stopped using the mark in question, after having been made aware of the lawsuit in this case. Therefore, the above-mentioned actions of Xi'an Hotel do not constitute trademark infringement.
-- Lawyer's comments
Due to the particularity of the real estate industry, the name of a real estate property that has been registered as a trademark may be used as a geographical indication. Therefore, whether the method of use of the complaint is the trademark use or descriptive use in the sense of geographical indication has become the focus in this case.
This is the first case that the trademark "aranya" holder protects the exclusive rights to the trademark via lawsuit. Losing the case will lead to the identification of "aranya" as a geographical name, this will give the brand operation of aranya company a major impact.
In the litigation, Chispo searched a large number of previous cases and academic articles related to the relationship between the name of the building and the place name to find the previous judicial practice and the theoretical basis for the relationship between the building and the place name. In terms of collecting evidence, in order to allow the judge to more intuitively feel that the behavior of the Xi'an Hotel is not justified, Chispo provides a map around the hotel in question, which is clearly marked with the evidence of the straight-line distance between the parties, the bus route and travel time. Combining the distance between the Xi'an Hotel and nearby attractions, communities and bus stops, the chain store's business model, other confusing behaviors, and the application of the trademark including the Chinese characters "aranya Store (in Chinese characters)", it is fully demonstrated that the Xi'an Hotel used the trademark without good reason. This part of the proxy opinion was fully accepted by the judge and included in the judgment.
In this case, Chispo used the advantages of fine calculation of damage compensation, starting from the aspects of the occupancy rate of Qinhuangdao hotel, tourism hotel industry profit margin and turnover, etc., and they provided a large number of detailed data, claiming that infringement and profit should be used as compensation for economic losses. The judgment finally confirmed the reasonableness of their calculation method.
The victory in this case fully embodies the principle that Chispo has been adhering to the case to do deeper and finer cases, and adheres to the working methods of field investigation, digging evidence, breaking through difficulties, and finely calculating damage compensation.