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October 2020
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Typical Case: Six Continents Hotels, INC. V. Dujiangyan Yun Shang Hotel

The case is a complicated trademark infringement dispute between a world-famous hotel brand and its former licensee who committed trademark infringement after the license has been terminated.

The plaintiff, Six Continents Hotels, Inc. (hereinafter referred to as "Six Continents") is a world-renowned hotel management company, particularly for its “Holiday Inn” series among people.

The defendant Dujiangyan Yun Shang Hotel Management Co., Ltd. (hereinafter referred to as "Yun Shang") operated Dujiangyan Holiday Inn Center Hotel, formerly named as Dujiangyan Center Holiday Inn Express authorized by the client. On June 12, 2018, Six Continents sent a letter to the defendant, stating that the contract between the parties will be terminated on July 12, 2018 and that the defendant should stop using all trademarks or logos that Six Continents has rights to. Subsequently, the targeted hotel was renamed Dujiangyan Holiday Inn Central and the management company was changed to Dujiangyan Yun Shang Hotel Management Co., Ltd. On October 12, 2018, Chang Tsi & Partners  issued a C&D letter to the target on behalf of Six Continents, but the defendant did not cooperate and Six Continents had to defend its rights through a lawsuit.

Chang Tsi & Partners (hereinafter referred to as “CTP”), after engagement, thoroughly investigated the case as follows: 1)analyzed the requirements of Six Continents, 2) proposed the litigation strategy based on the feedback of Six Continents, and, 3) filed a lawsuit before Chengdu City Intermediate People’s Court in 2019. During litigation, the defendant claimed that “Holiday Inn” did not constitute a trademark infringement for it was the generic name. Facing the defendant’s claims, CTP finally succeeded in persuading the court of first instance to support the plaintiff’s claims based on solid evidence and thorough analysis, including stopping the infringement, eliminating the impact, and compensating for losses of RMB 1.2 million.

I. BACKGROUNDS

The plaintiff, SIX CONTINENTS HOTELS, INC., is a company organized in accordance with the laws of the United States, with its headquarter located at 3 RAVINIA DRIVE,ATLANTA GEORGIA 30346, UNITED STATES OF AMERICA. The plaintiff (under the name of the first company and the state of the company structure) was established in 1777. It is currently one of the world’s largest professional hotel management groups, with operations in nearly 100 countries, and has many internationally renowned names such as "Crown Plaza Hotel", "CROWNE PLAZA", "Crown", and "HOLIDAY INN" Hotel brands. The plaintiff has more than 60 years of international hotel management experience and has operated hotels in 25 provinces, autonomous regions and municipalities in mainland China, including Sichuan Province where the defendant is located.

The defendant Dujiangyan Yun Shang Hotel Management Co., Ltd. (hereinafter referred to as "Yun Shang") operated the Dujiangyan Holiday Inn Center Hotel, formerly Dujiangyan Center Holiday Inn Express authorized by the client. On June 12, 2018, Six Continents sent a letter to the defendant, stating that the contract between the parties will be terminated on July 12, 2018 and that the defendant should stop using all trademarks or logos that Six Continents has rights to. Subsequently, the target hotel was renamed Dujiangyan Holiday Inn Central and the management company was changed to Dujiangyan Yun Shang Hotel Management Co., Ltd. The plaintiff once filed a complaint against the hotel involved in the case to the local market supervision administration, but failed to obtain support. On October 12, 2018, we issued a C&D letter to the target on behalf of Six Continents, but the defendant did not cooperate and Six Continents had to defend its rights through a lawsuit.

Six Continents filed a lawsuit before Chengdu City Intermediate People’s Court in 2019. During litigation, the defendant claimed that “Holiday Inn” did not constitute trademark infringement for it was the generic name. Facing the defendant’s claims, CTP finally succeeded in persuading the court of first instance to support the plaintiff’s claims based on solid evidence and perfect analysis, including stopping the infringement, eliminating the impact, and compensating for losses of RMB 1.2 million.

II. DIFFICULTIES

i) Although the client's Holiday Inn series trademarks are well-known, the infringement status is relatively severe and there is a possibility of dilution. In this case, the defendant also claimed that "Holiday Inn" was a generic name, and claimed that all the trademarks involved in the case were in the invalidation procedure.

ii) The defendant in this case was very cunning and changed the management company that operated the hotel after the authorization was terminated. In this case, it is difficult to find the correct defendant and provide evidence.

iii) In this case, the client intends to seek high compensation. How to provide evidence to support our claim is difficult.

III. STRATEGIES

i) Collect relevant solid evidence to prove the popularity of the client's trademarks through various methods.

ii) Confirm the identity of the defendant through the invoice obtained in the on-site notarization and the notarization of the WeChat official account.

iii) In addition to the popularity evidence, provide various relevant evidence to prove the defendant’s malice.

IV. SIGNIFICANCE

i) After the complaint to the local authority failed, we successfully obtained a judgment in our favor;

ii) The judgment ascertains the high fame of our Holiday series marks in China;

iii) The judgment clearly rebut the claim that Holiday mark is a generic term in China;

iv) This judgment clearly indicates that a former distributor's use of the previous licensed marks after the termination of the license agreement shall constitute infringement in China;

v) The compensation is around 1.2 million RMB, which is very high for similar cases;

vi) The judgment also rules for diminishment of adverse effect for our infringement case because of the consumer confusion caused, which is very difficult in similar cases;

vii) The judgment does not wait or suspend the procedure of the case upon the defendant's petition for the result of invalidation actions against our Holiday marks.

15th Anniversary of Chang Tsi & Partners --