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September 2017
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Chang Tsi & Partners, on behalf of Guinness World Records, wins in the first-instance trial between Guinness World Records v. Chery.

Recently, Nancy Qu and Tracy Shen, attorneys from Chang Tsi & Partners, on behalf of the plaintiff Guinness World Records (hereinafter referred to as the “plaintiff” or “Guinness World Records”), brought a lawsuit against Chery Automobile Co., Ltd. (hereinafter referred to as “Chery Company”) and Anhui Chery Automobile Sales, Co., Ltd. (hereinafter referred to as “Chery Sales Company”) for claims of trademark infringement and unfair competition. The case was heard in a first-instance trial before Foshan City Intermediate People’s Court in Guangdong Province. Foshan City Intermediate People’s Court made the first-instance judgment to support the plaintiff’s claims, and ordered the defendants to immediately cease the actions which constitute trademark infringement and unfair competition. The court also ordered the defendants to publish statements on the website www.autohome.com.cn and Auto Magazine to eliminate any adverse effects on the plaintiff, and awarded the plaintiff’s compensatory damages and reasonable expenses in the amount of CNY2.12 Million. Chery Company and Chery Sales Company have appealed the first-instance judgment.

Upon publication, this first-instance judgment aroused widespread concerns, and has been reported by mainstream media such as Southern Metropolitan Daily.

History of the “Guinness World Records” brand

The year 1954 witnessed the founding of Guinness World Records in the United Kingdom. The first edition of Guinness World Records was bounded into a book in 1955, and from then on, the phrase “Guinness World Records” gradually became a household name, and Guinness World Records became a leader in global record authentication. Through years of promotion, Guinness World Records earned its strong reputation in the world, including China. “吉尼斯”, “吉尼斯世界纪录” and “GUINNESS WORLD RECORDS” are registered trademarks of Guinness World Records.

Background of the case

Since April 10, 2014, the two defendants in the case, without the approval from Guinness World Records, have successively held many large-scale commercial activities entitled “Chery Arrizo Guinness World Records  Challengers Tour in China” in at least 16 cities throughout China, released the promotional information regarding the activities on the official website of Chery Company and other websites, and used a great number of logos such as “吉尼斯” and “GUINNESS WORLD RECORDS” identical to the plaintiff’s registered trademarks and enterprise name, and slogans “我是吉尼斯”, “挑战吉尼斯”and “挑战吉尼斯中国巡演” for large-scale promotions. Such acts have misled and confused consumers as to the source of these services and, as a result, hurt the social fabric of society.

“Chery Arrizo Guinness World Records  Challengers Tour in China” in Foshan

reproduced on the website WWW.CHINANEWS.COM

http://finance.chinanews.com/sh/2017/09-05/8323208.shtml

The plaintiff put the Chery Company on notice of their infringing behavior before the events were held on a large scale. When the events were held, Chang Tsi & Partners, on behalf of Guinness World Records, sent a demand letter to Chery Company, to request that the defendants cease the infringing acts. However, the defendants did not cease its promotional activities, and continued to infringe without communicating and negotiating with Guinness World Records.

Since no settlement was reached, the plaintiff wrote to Wuhu City Administration for Industry and Commerce three times to request they prohibit the defendants’ infringing acts; however, the defendants continued unabated.

The defendants’ acts have caused the plaintiff financial harm and damaged its goodwill, and also caused public confusion. As a result, the defendants’ infringement has upset the normal market order. Accordingly, Guinness World Records filed a lawsuit against Chery Company and Chery Sales Company, claiming that defendants’ acts constitute trademark infringement and unfair competition, and requested the defendants to cease the infringing acts, eliminate the negative influences and provide compensation for damages.

Difficulties and highlights in the case

1.  Well known Defendants and Fierce Fighting on The Court

The defendants in the case are famous enterprises in China, and thus possessed great social influence. When faced with the plaintiff’s infringement claims, the defendants deliberately ignored the demand letters sent by the plaintiff, and sent negative responses to the plaintiff’s administrative complaints. After the plaintiff brought a lawsuit, the defendants raised an objection to the jurisdictional authority of the Foshan City Intermediate People’s Court. After the objection was overruled, the defendants then appealed the jurisdictional order before Guangdong High People’s Court. During the trial, the defendants fiercely confronted the plaintiff regarding the plaintiff’s claims, facts and causes.

2.  Long Duration

Since Guinness World Records first sent the Letter of Notice, this case has lasted for more than three years, going through processes such as delivery of the Lawyer’s Letter prior to prosecution, investigation made by an industrial and commercial entity, objection to the jurisdiction and appeal after prosecution, multiple evidence exchanges, opening of a court session, and the first-instance judgment.

3.  Full of Difficuties to Resolve The Legal Problems Involved

The defendants’ actions in the case are various, specifically including: the phrases “Guinness World Records Challengers Tour in China,” “Guinness World Records” and “I’m a Guinness World Records Challengers,” which were used during promotion on websites and on signboards, stunt vehicle bodies, fences, flooring, staff uniforms, etc., in the scenes of activities. The text reported on a website read: “Chery has once created many Guinness World Records for China. Today, the brand-new Arrizo 7 with its powerful strength will challenge the world again.”

Chang Tsi & Partners as the law firm of the plaintiff drafted and submitted written evidence comprising more than 3,000 pages. As for the above actions, both the plaintiff and the defendants maintained a fierce debate against each other in the court session centering on core issues, e.g., whether the actions involved were conducted by the defendants, whether the actions involved constitute trademark use, whether the actions involved constitute trademark infringement and unfair competition, and the legal liabilities that the defendants shall bear. Due to the strong argument made on reasonable grounds, Chang Tsi & Partners finally successfully convinced the court that the plaintiff’s allegation, i.e. trademark infringement and unfair competition, shall be accepted.

Result of the case

1.    The two defendants shall immediately cease the use of infringing logos such as “GUINNESS WORLD RECORDS,” “我是吉尼斯,” “挑战吉尼斯,” and “挑战吉尼斯中国巡演,” phrases containing “Guinness World Records” or “吉尼斯” in auto stunt challenge tours and on relevant websites, and cease using phrases such as “Chery has once created many Guinness World Records. Today, the brand-new Arrizo 7 with its powerful strength will challenge the world again!” on websites;

2. The two defendants shall publish statements on the website www.autohome.com.cn and Auto Magazine to eliminate the adverse effects caused by the infringing actions within 30 days of the judgment taking effect;

3. The two defendants shall compensate the plaintiff for financial damages and reasonable expenses in the total amount of CNY21.1 Billion within ten (10) days from the date the judgment takes legal effect.

In the courtroom of Foshan City Intermediate People’s Court

photographed by HUANG Zhiqing reproduced on the website WWW.CHINANEWS.COM

http://finance.chinanews.com/sh/2017/09-05/8323208.shtml

Significance and impact of the case

1. The case was a complex case where the trademark right is maliciously infringed. Nancy Qu and Tracy Shen -- attorneys from Chang Tsi & Partners, on behalf of Guinness World Records, prepared and delivered arguments for the case. This case allowed the public to learn of the complex IP issues in China and also presented significant lessons for industry.

2. The First-instance Judgment of the case in a length of 44 pages features detailed argument and sufficient reasoning. The fair trial and judgment of the case reflect the sound judicial environment for intellectual property protection in China and the judges’ excellent capabilities for case handling, and also fairly inspire the patentees’ faith in right protection.

3. The first-instance judgment shows a judicial trend, i.e., the courts do pay attention to the protection of the intellectual property rights of private owners and will punish malicious infringers. This is a healthy development for creating a strong and fair market climate, and encourages businesses to respect the intellectual property of others when engaging in business activities.