The trademark infringement and unfair competition dispute brought by Starbucks Corporation and Shanghai Unified Starbucks Coffee Co., Ltd. against Shanghai Starbucks Cafe Co., Ltd. and its Nanjing Road branch is a classic well-known trademark protection case published in the Gazette of the Supreme People's Court. The case found that registering another's famous trademark as a corporate trade name and using it prominently constituted trademark infringement and unfair competition, and ordered the defendant to change its corporate name and pay RMB 500,000 in damages.
Case Overview
Starbucks Corporation owns the 'STARBUCKS', '星巴克 (Starbucks Chinese)', and other trademarks in China, and Shanghai Unified Starbucks Coffee Co., Ltd. is its licensee. The defendant, Shanghai Starbucks Cafe Co., Ltd., established around 2000, registered '星巴克' as its corporate trade name and used the characters prominently at its premises, on signage, and on menus. The plaintiffs alleged infringement of the exclusive right to the registered trademarks and unfair competition and sued.
Issues in Dispute
- Whether 'STARBUCKS' and '星巴克' constituted well-known trademarks at the time of the accused conduct;
- Whether the defendant's registration and use of '星巴克' as a corporate trade name constituted trademark infringement;
- Whether the defendant's conduct constituted unfair competition through unauthorized use of another's enterprise name.
Judgments and Case Numbers
- First instance: Shanghai Second Intermediate People's Court, (2004) Hu 02 Zhong Min Wu (Zhi) Chu Zi No. 1, judgment in December 2005 (the case was accepted on December 30, 2003 and tried on April 29, 2005). The court found 'STARBUCKS' and '星巴克' to be well-known trademarks and ordered the defendant to stop the infringement, change its corporate name (which may not contain the characters '星巴克'), pay RMB 500,000 in economic losses, and publish an apology in Xinmin Evening News;
- Second instance: Shanghai Higher People's Court, (2006) Hu Gao Min San (Zhi) Zhong Zi No. 32, final judgment in December 2006 affirming the decision;
- Enforcement follow-up: during enforcement in 2007, the defendant changed its corporate name to 'Shanghai Fangyun Cafe Co., Ltd.';
- Sources: Gazette case 'Starbucks Corporation and Unified Starbucks v. Shanghai Starbucks and Shanghai Starbucks Branch—trademark infringement and unfair competition dispute'; Economic Information Daily report of May 28, 2007 ('Trademark infringement also has deadbeats: copycat Starbucks forcibly renamed').
Key Takeaways
- The rule for conflicts between trade names and trademarks: registering characters identical or similar to another's registered trademark as a corporate trade name and using them prominently, where the relevant public is likely to be misled, constitutes trademark infringement;
- Well-known recognition is the premise of stronger protection: once recognized as well-known, the mark can stop others from using identical or similar signs on dissimilar goods;
- Changing the corporate name is key relief: merely ordering cessation of sign use does not solve the problem—ordering the trade name changed eliminates the source of market confusion;
- Apology and elimination of impact: where goodwill damage is evident, the court may order the defendant to publish statements.
Lessons for Businesses
Corporate name registration is no 'legal cloak': where a trade name conflicts with a prior famous trademark, a change of name will still be ordered; brand owners finding others registered under identical or similar trade names may file trademark infringement and unfair competition suits requesting an order to change the corporate name; against parties refusing to perform effective judgments, enforcement may be applied for to force a trade name change through market regulation authorities; and enterprises should conduct trademark searches before naming to avoid the renaming costs and damages risks of 'hitching on famous brands'.
To engage the services described above, you may submit a trademark monitoring request on MyTMBee, and a filed trademark agent will follow up.