Weekly China Brand Protection News

November 6, 2024

1. Huawei Successfully Protects its Phone Charger Based on “Influential Product Names and Packaging”

The Beijing IP Court made a second-instance ruling in the case of Dongguan Zhihong Electronics Technology Co., Ltd. (the appellant) against Huawei Terminal Co., Ltd. (the appellee) and the original defendant, Beijing JD 360 Degree E-commerce Co., Ltd., over unfair competition. The court ruled that Zhihong Electronics must immediately stop using product names and packaging that are identical or similar to Huawei’s “SuperCharge” and “超级快充 (SuperCharge in Chinese)” chargers. Zhihong Electronics is also ordered to halt the sale of the infringing products and destroy existing stock, as well as compensate Huawei for economic losses and reasonable expenses amounting to CNY 110,000 (USD 15,000).

The second-instance court found that Huawei began promoting its super fast charging mobile chargers in 2016. Through Huawei’s extensive and long-term marketing, the name “SuperCharge / SuperCharge in Chinese” and the distinct design elements—such as the specific size, white color, rounded corners, and an oval depression on one-third of the charger body—have gained significant recognition and influence. While the depressed design is not exclusive to Huawei, when combined with other elements, it still creates a distinctive feature that sets it apart from other chargers. Therefore, the court ruled that the “SuperCharge / SuperCharge in Chinese” name and its unique design qualify as product names and packaging with significant influence under Article 6 of the Anti-Unfair Competition Law.

Evidence in the case showed that Zhihong Electronics not only produced chargers with designs highly similar to Huawei’s, but also promised to sell products bearing the “Huawei,” “SuperCharge,” and “SuperCharge in Chinese” trademarks on its 1688 storefront. Such actions could easily confuse the public, constituting unfair competition as defined by Article 6, Section 1 of the Anti-Unfair Competition Law. Although Huawei’s purchase of infringing products from Zhihong Electronics’s supplier did not display the “SuperCharge” or “SuperCharge in Chinese” trademarks, the combined actions of promoting these products on 1688 led the court to conclude that Zhihong Electronics improperly used Huawei’s influential product names and packaging, which could mislead consumers.

Founded in 2020, Zhihong Electronics is primarily engaged in the development and sale of electronic products and accessories. As such, the company should have been aware of Huawei SuperCharge charger’s name and design. Despite this, Zhihong Electronics did not take steps to avoid infringing on Huawei’s trademarks and instead produced and sold highly similar chargers, engaging in unfair competition. While Zhihong Electronics argued that it was merely a processing agent and should not bear responsibility, the second-instance court ruled that the evidence presented in the appeal was insufficient to prove that the infringing products were commissioned from its supplier, and even if they were, Zhihong Electronics was still responsible for accepting the commission knowing that infringement was likely.

2. First Domestic Legally Binding Cross-Border E-Commerce Unfair Competition Case Based On “Fake Reviews and Manipulation”

The Shenzhen Intermediate Court has issued a second-instance judgment in a case involving Amazon.com Inc. and Amazon.com Services LLC (“Amazon”) against two defendants over unfair competition. The court ruled that the two defendants must issue a public statement for 15 consecutive days to remove the negative impact of their unfair competition on Amazon, and they are required to compensate Amazon for economic losses and reasonable expenses totaling CNY 800,000 (USD 110,000).

Amazon claimed that the unfair competition conducted by the two defendants included services such as “Add to Cart | Wish List,” “Ranking Optimization,” “Pull-down Promotions,” “Direct Reviews,” “Associated Videos,” “Like Tasks,” “Q&A Questions,” “Q&A Answers + Video,” “Q&A Polls,” “Merging International Reviews,” “Flash Sale Control,” and “Deleting Negative Reviews.” Amazon argued that these actions disrupted the market competition order in the cross-border e-commerce industry, harmed the fair competition ecosystem that Amazon had worked hard to build, and infringed upon consumers’ rights to be informed and make choices.

The second-instance court found that evidence showed that the contested actions were carried out using fake Amazon buyer accounts. The defendants acknowledged this, and as such, the court ruled that these actions, while conducted through Amazon buyer accounts, did not reflect the genuine intent of Amazon customers. Instead, they constituted false transactions or actions based on false representations related to the transaction. The results of these actions were designed to assist Amazon sellers in creating false or misleading commercial promotions. Therefore, the behaviors conducted on the defendants’ websites were deemed to be false advertising.

As for the “Merging International Reviews” practice, Amazon’s platform guidelines explicitly state that reviews may only be merged if the products are substantially identical and belong to the same category or variation. However, the notarized evidence in this case showed that the contested website provided examples of merging reviews from different products with similar appearances, and did not follow Amazon’s rules when providing this service. This action helped and encouraged Amazon sellers to fabricate related product reviews, and the merged reviews, which came from visually similar products, were likely to mislead consumers into misidentifying the reviewed product. As such, the court also determined that the “Merging International Reviews” practice constituted false advertising.

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