[Shanghai Law Journal] Unauthorized Use of UnionPay Trademark on POS Machines Constitutes Infringement!
Court: Unauthorized Making and Use of UnionPay Trademark and the Enterprise Name Constitutes Infringement and Unfair Competition
December 26, 2016 Shanghai Law Journal A07: Court Trial
(Reporter: Hu Diefei; Correspondent: Chen Yingying)
Recently, Shanghai Intellectual Property Court concluded a lawsuitregarding trademark infringement and unfair competition brought by China UnionPay Co., Ltd (hereinafter referred to as "UnionPay") against Jinan Daonuo Information Technology Co., Ltd (hereinafter referred to as "Daonuo") and Shandong Yuntai Mingde Information Technology Co., Ltd (hereinafter referred to as "Yuntai Mingde"). It was ruled that two defendants should desistfrom their infringement on UnionPay’sexclusive right to use several trademarks relevant to “UnionPay”immediately and make statements to eliminate the impact, the defendant Daonuo should desist fromits unfair competition action of unauthorized use of the plaintiff's enterprise name and false advertising immediately, and the two defendants of Daonuo and Yuntai Mingde should pay the plaintiff over 700,000yuanas a compensation for its economic losses and reasonable expenses.
Defendants were brought to court for offering POS machines bearing the "UnionPay" trademark
In June 2014, UnionPay successively receivedcomplaints from some merchants against Daonuo for its unauthorized use of UnionPay trademark, suspected acquiring business engagement in the name of UnionPay without authorization, issuance of certificate of authorization byfaking the seal of "Shanghai Branch of China UnionPay", frequent failure of POS machines, failure in receiving payments which had been closed and difficult return of deposits, which had affected the normal operations of merchants seriously.
The Law Enforcement and Inspection Corps of Shanghai Administration for Industry & Commerce found upon investigation that Daonuo, with its head office established in Jinan on April 17, 2013, was mainly engaged in the sale of credit card POS terminal, and had set up registered branches in Shanghai, Wuhan, Chongqing and other places successively from 2014. The company declared on its website that it had signed national strategic cooperation agreements between and byits home office and the headquarters of UnionPay and other companies and institutions with a third-party payment license which were engaged in offline acquiring business. In addition, its business personnel prepared merchant registration forms, POS service agreements for special merchants and other documents in the name of China UnionPay Branch and conducted business across the country. The industry and commerce organs in Shanghai, Chongqing and other places conducted field investigation into Daonuo branches concurrently, hunting down and seizing a large number of signs, employee ID badges, name cards, publicity materials and service agreements bearing "UnionPay" texts and logos, all of which were made by the company without authorization. Its certificate of authorization and the seal of "Shanghai Branch of China UnionPay" were fake upon verification.
In September 2014, Yuntai Mingde was founded with theformer shareholders in Daonuo as its shareholders. The company promoted and sold POS machines bearing “UnionPay” trademark and promoted such business in the name of an associate of UnionPay, and received payments using its own account and Daonuo’s account.
In view of the above facts, UnionPay concluded that the two defendants had infringed upon its exclusive right to use its registered trademark, which constituted unfair competition. In addition, the two had the common will subjectively and should bear the liability of joint infringement. Thereforeit requested the court to rule the two defendants pay UnionPay totally 5,000,000 yuan as a compensation for its economic losses and reasonable expenses.
Meanwhile, Daonuo defended that it did use "UnionPay" trademark and logo in its transaction documents and on the POS machines, butthe UnionPay trademarks on POS machines came with the machines rather than printed by the company, and all the inter-bank transactions were settled through UnionPay.Daonuo argued that its act highlighted the special status and role of UnionPay instead of damaging its corporate image and causing public misunderstanding, so it didn’t constitutean infringement.
The other defendant Yuntai Mingde also stressed that the trademarks on POS machines were attached by the manufacturers, and it wasan independent civil subject which never mix its personnel, business and capital with Daonuo.
Unauthorized use of "UnionPay" trademark constituted an infringement and unfair competition
Shanghai Intellectual Property Court conducted trial and held that Daonuo and Yuntai Mingde's act of using trademarks identical or similar to the registered trademark of UnionPay on the POS machines and startup screens sold by them jointly or sold/offered by Daonuo separately infringed upon UnionPay's exclusive right to use its registered trademark; Daonuo's act of using logos identical or similar to UnionPay’s logos and UnionPay’s enterprise name in its premise decorations, advertising materials and transaction documents without the permission of UnionPay, and its act of declaring on its website that it had signed strategic cooperation agreements with UnionPay, faking seals and authorization certificates, and conducting business in the name of Shanghai Branch of China UnionPay on the condition that it had no cooperation with and authorization from UnionPay, would make relevant public confused about the source of its services and infringed upon the exclusive right of UnionPay to use its registered trademark; unauthorized use of the name of another enterprise and false advertising constituted unfair competition.
In view of the popularity of the protected trademark and enterprise name, the nature, time and consequences of the infringing acts, the subjective state of two defendants in committing the infringement and the investigation results of the industry and commerce organs, Shanghai Intellectual Property Court ruled that Jinan Daonuo Information Technology Co., Ltd. should pay China UnionPay Co., Ltd.over 460,000yuanas a compensation for its economic losses and reasonable expenses; Jinan Daonuo Information Technology Co., Ltd. and Shandong Yuntai Mingde Information Technology Co., Ltd. should pay China UnionPay Co., Ltd.over 230,000yuanas a compensation for its economic losses and reasonable expenses.
