III. Determining that the use of the post registered trademark,enterprise (shop) name infringes upon the prior enterprise (shop)name and constitutes unfair competition

In absence of clear stipulation in China’s Law Against Unfair Competition and relevant judicial interpretations that such kind of acts are the legal constitutional elements for infringement, the people's court may invoke the provisions provided for in China’s Tort Liability Law in terms of constitutional elements for tort liability that "the feason infringing upon civil rights and interests of others by fault shall assume tort liability". Therefore, the key for such determination is "fault plus damage". because it is not within the scope of acceptanceby the people's court, and notify the plaintiff to apply to relevant administrative organs for resolution.In this case, because Wang Suiyong's use of (category 18) registered trademarks "Gleas" and "Gelisi"

(1) Fault: whether there is an intention that knows or ought to know. That is to say, whether the use of the post registered trademark or shop name proves the subjective intention of playing up to the goodwill of prior registered trademarks or shop names. The people's court should take a comprehensive consideration of the factors such as the degree of similarity between the two trademarks or names, the degree of similarity of such trademarks or names used on goods, the distinctiveness and notability of the shop name claiming for protection,the popularity among the relevant public and their interplay.

a. Both parties used identical "Gelisi" as registered trademarks and shop names

b. "Gelisi" was used by Shenzhen Ellassay Fashion Co., Ltd. in the25th category of clothing and Wang SuiYong in the 18th category of handbags. Are the two categories of goods can be determined as similar goods? Although there are some differences between clothing and handbag in terms of function and usage, they are basically the same in terms of distribution channel and targeted consumers, and it is very common that the same manufacturer produces and sells clothing and handbags at the same time. Shenzhen Ellassay Fashion Co., Ltd. is such an example in this regard. Therefore,the two trademarks and names are closely related and can be determined as similar goods.

c. Because the right of enterprise(shop) name is not statutory right but a kind of right and interest with geographical limitation, it is a kind of weak right and interest. Therefore,there should be a strict examination of distinctiveness and notability to a relatively high extent. Firstly, the word "Gelisi" was neologized by the legal representative of Shenzhen Ellassay Fashion Co., Ltd. When his brand was created, with high distinctiveness in originality; there is a low probability that others make up a new word by using and combining the three Chinese characters, namely, "ge", "li" and"si", according to his coincident thinking, and Wang Suiyong failed to submit evidences to prove the causal relationship between himand "Gelisi". Secondly, in terms of time sequence for the use of"Gelisi", Shenzhen Ellassay Fashion Co., Ltd. was incorporated in 1996 with trademark "Gelisi" registered in1999 (No. 1348583) and had, prior to Wang Suiyong's application for the registration of "Gelisi" as trademark on December 18, 2009, used "Gelisi"as shop names and registered trademarks on clothing goods for many years, and accumulated relatively high notability in the clothing industry; Wang Suiyong operated Guangzhou City Baiyun District Sanyuanli Xiuge Leather Goods Trading Company from 2007 to 2011 in Guangzhou, which is in the neighbor of Shenzhen Ellassay Fashion Co., Ltd. with Shenzhen as it premises; there is relevance to huge extent between them in terms of business scope, distribution channel and targeted consumers, due to which their commodities are similar goods and it was easy for Wang Suiyong to know the notability of "Gelisi" owned and used by Shenzhen Ellassay Fashion Co., Ltd.Lastly, there is a relatively important factor that precedents show that Wang Suiyong had the history of applying well-known artists such as "Zhang Manyu" (Maggie Cheung)and well-known cosmetics brands such as "Kose Cosm" for registered trademarks. In summary, Wang Suiyong had subjective intention of playing up to and hitchhiking of the plaintiff's goodwill in his acts of using "Gelisi" in his production and operation. Wang Suiyong continues to use the enterprise name owned by French Ellassay (Hong Kong)International Group Co., Ltd. After its being dissolved, and to use "Gelisi" as his shop name, which further proved that he had a clearly subjective intention of playing up to the goodwill of "Gelisi".

d. Relevant public attention. As mentioned above, clothing and handbags are similar goods with close relevance, due to which there is a higher possibility that it may cause confusions and mistakes among the relevant public in comparison with different categories of goods, and it is more difficult for them to know that the goods are produced by different producers.

The consequences of damage. Whether the aforementioned acts committed by Wang Suiyong caused confusions and mistakes among the consumers, and harmed the prior rights and interest owned by Shenzhen Ellassay Fashion Co.,Ltd.? As mentioned above, "Gelisi"has relatively high notability in women's clothing as a trademark used on clothing goods and a name for clothing enterprise due to the long and extensive popularization and use; the goodwill and notability accumulated by Shenzhen Ellassay Fashion Co., Ltd. in its long-term operation is higher than that of "Gelisi" used by Wang Suiyong on his leather goods. Therefore, Wang Suiyong's continuous use of such trademark and shop name on similar goods such as handbags with close relevance with clothing will inevitably cause confusions and mistakes concerning the source of goods and service among the consumers that the goods produced and sold by Wang Suiyong were from Shenzhen Ellassay Fashion Co., Ltd.or there were specific connection between Wang Suiyong and Shenzhen Ellassay Fashion Co., Ltd. in terms of operation.

When hearing such cases, the people's court must observe the principles such as honesty and credibility and protecting fair competition and prior rights. The allegedly infringing registered trademark is legal in form after being registered according to the laws,so the veil of its legality should be pierced in order to make an objective determination on whether the such act constitutes unfair competition because substantial infringement cannot be covered up by its legality inform, which can not be the "legal"basis for unfair competition to be conducted and even to be continued.Take "the fruit of a poisonous tree"in criminal evidence as an example.Malicious Cybersquatting just like a"poisonous tree", the consequences of damage such action cause just like "the fruit of a poisonous tree".The core tasks of the court of first instance are to clearly ascertain the facts and correctly apply the laws. To correctly apply the laws means that there should be a full understanding of the legislative purpose of China's Law Against Unfair Competition: safeguarding the healthy development of market economy, encouraging and protecting fair competition, repressing unfair competition acts, and protecting the lawful rights and interests of business operators and consumers. Therefore, the court hearing unfair competition case should take a full consideration of balancing the interests between and among the obligee, relevant public (consumers)and competitors in determination of law application. A bias toward any party in judicial practice will harm the normal market competition order and cause imbalance and disorder of competition, the balanced triangular relation between and among the obligee, competitors and consumers will be improperly tilted, the protection for interests unbalanced,the legislative purpose derived, and the overall welfare resulting from market reduced. In the end, the overall interests of the whole society will also be damaged.

Translator's Note: Both the Chinese texts of the two trademarks or shop names in English, namely, "Ellassay"and "Gleas" involved in the case are the same Chinese characters" 歌力思 "with Gelisi as the pronunciation in Chinese.Therefore, Gelisi is used to refer to such two trademarks in the paper or each of them in the event of no special mention.