China's Little Yellow Bike Company Sued for Trademark Infringement

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The bicycle sharing business has boomed in China since the beginning of 2017. Beijing Bikelock Technology Co., Ltd (“OFO”), being one of the most successful companies in the market of China, has received high returns in the market whilst having encountered a lot of challenges.

On 31 July 2017, the Haidian District People’s Court of Beijing published a fact that it had accepted a case filed by ShuRen (Shanghai) Intelligent Technology Co., Ltd (“ShuRen”) against OFO, claiming that OFO had engaged in trademark infringement.

“小黄车” is the Chinese version of “little yellow bicycle”. On 29 July 2015, ShuRen filed applications for the registration
of “小黄车” as a trademark for various goods and services in classes 9, 12, 37 and 38 respectively in the China Trademark Office (“CTO”). Apart from all the goods including bicycles in class 12, the trademark applications in relation to others goods passed substantive examination and registered in the CTO in 2016. Based on the ownership of these trademark registrations for goods and services in classes 9 and 38, ShuRen has claimed that the use of “OFO小黄车” by OFO in relation to bicycle share services, infringes its exclusive rights to use of the registered trademark “小黄车” under Trademark Registration No. 17541750 and 17541835 due to the following:

1. The use of “OFO小黄车” by OFO constitutes use of a trademark under Article 48 of the PRC Trademark Law;
2. The “OFO小黄车” trademark used by OFO, is deceptively similar to the registered “小黄车” trademark owned by ShuRen;
3. The goods/services that the “OFO小黄车” trademark is used in relation to, by OFO, are similar to the goods/services covered by ShuRen’s registered trademarks; and
4. The use of the “OFO小黄车” trademark by OFO will cause confusion.

There is no doubt that the use of the “OFO小黄车” trademark by OFO for its smartphone App’s name, services introduction and various service interfaces, official advertising and related activities, constitutes “use” as per Article 48 of the PRC Trademark Law which provides that “the use of trademarks as stipulated in this Law refers to the affixation of trademarks to commodities, commodity packaging or containers, as well as commodity exchange documents or the use of trademarks in advertisements, exhibitions, and for other commercial activities, in order to identify the source of the goods”. However, such “use” is not for providing smartphone App services, which might be covered by the goods/services designated for ShuRen’s registered trademarks in class 9 or 38, but for promoting OFO’s bicycle-sharing business and/or bicycle products. In other words, OFO is using the “OFO小黄车” trademark in relation to the goods/services that are not the same as or similar to those covered by ShuRen’s registered trademarks. ShuRen’s trademark registrations cited in this case cover the goods and services such as cameras [photography]; batteries, electric, for vehicles; theft prevention installations, electric; computer software applications, downloadable ; computer software, recorded; cabinets for loudspeakers; automatic indicators of low pressure in vehicle tires; chips [integrated circuits]; navigation apparatus for vehicles [on-board computers]; traffic-light apparatus [signaling devices] in class 9, and wireless broadcasting; providing telecommunication channels for teleshopping; electronic bulletin board services [telecommunications]; communications by computer terminals; providing online forums; computer aided transmission of messages and images, message sending, providing access to databases, communications by cellular phones, providing user access to global computer networks in class 38.

Meanwhile, the trademarks of “OFO小黄车” varies from “小黄车”. The meaning of the latter is “little yellow bike”. It is hard to get it registered as a trademark due to lack of distinctiveness as it is exactly a description of the goods in relation to the bike-sharing business. That is presumably why ShuRen failed to get it registered for using on the goods including bicycles in class 12 in 2015. As a result, it cannot be the significant part of “OFO小黄车”.

On the contrary, “OFO” is likely to be seen as the dominant part of the “OFO小黄车” trademark in relation to the goods/services in bike-sharing market because “OFO” itself is inherently adapted to distinguish the source of goods/services in the market, and it has enjoyed a strong reputation in the market due to wide use and promotion.

In addition, it is likely that the court will not find any malicious intention regarding the use of the “OFO小黄车” trademark by OFO. Further, it is likely that the court will have difficulty in finding that use of this trademark will cause confusion as consumers tend to consider the goods/services marked with “OFO小黄车” as originating from OFO only.

We await the court’s decision with anticipation.

Xia Yu is a Partner with the MMLC Group.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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