Because of 2000

[Judge Dongtao Li]

The Facts

Both the plaintiff and the defendant are suppliers of software to the stock market.

On October 1997, the plaintiff succeeded in developing stock software, called “A”, which was one of the company’s main products used for the management of stock investments. 

Due to the high performance of the software, it had been rated one of the top 10 among stock software packages on the market.  The plaintiff placed lots of ads in the media nationwide promoting the product.

Early in 2000, the defendant began selling its product, “B”, the stock software named “A2000”.

The defendant used “A2000” on its product package and on its website as a clickable logo which links to other web pages.

The contents of the two software packages were different. 

In addition, the letter "A” that appeared on each supplier’s packaging and ads were different, but there was no difference in pronunciation.

“A” is also the plaintiff’s registered trademark.

The plaintiff sued the defendant for unfair competition (passing off) and asked the latter to:

1. Stop selling A2000 software and destroy relevant A2000 packages, decorations and false ad online;

2. Apology publicly on the website of its homepage and in the newspaper The Computer and Computer Business Information

3. Compensate RMB 20,000 yuan damages

The defendant argued that unfair competition was not established because it developed A2000 software independently with different design and package to those of the plaintiff’s A software.

Opinion

The court held that the plaintiff's "A” software was a well-known product. Moreover, the products of the two parties were different in content, and the two "A” s were also written in different styles, but there was no difference in how the two letters were read.

The defendant "bridged the gap" between the two software applications in this way. Therefore, passing off was established.

Due to the plaintiff’s failure to present relevant evidence, the Court would determine damages for the plaintiff and the method of stopping the infringement according to the laws based on the seriousness of the infringement.

According to the Article 2.1 and 5(1) and (2) of the Law Against Unfair Competition of PRC[1], the court orders that:

  1. The Defendant shall stop using “A”on the package and relevant Ad of “B” software upon the effective date of this Judgment.
  1. The defendant shall publish an apology on the homepage of its website for 24 hours continuously to the plaintiff within 30 days from the effective date of this Judgment;

Contents of the apology shall be approved by this Court. If the defendant refuses to comply, the Court will publish an announcement at a media website. The cost and expenses occurred should be borne by the defendant.

  1. The Defendant shall pay the Plaintiff royalties and compensation of RMB 20,000 Yuan within 10 days from the effective date of this Judgment.

After verdict, the defendant appealed.

The two parties reached a mediation agreement at the second instance court.

Note

In this case, the defendant used “A2000” on its product package and on its website as a clickable logo which links to other webpages.

In theory, a link is a connection between the content of two different files or between different parts of a single file created by using the Hyper Text Markup Language (HTML).

A link may lead either to another file on the same website or to another file on a different computer located elsewhere on the Internet.

Passing off is a form of unfair competition.

In cyberspace, passing off might occur when HTML links are made. 

Although this is different from “passing off” in the real world, the differences can’t change the nature of passing off.



[1]Article 2.1 Managers shall abide by the principle of voluntariness, equality, impartiality, honesty and good faith, and also adhere to public commercial moral in their business transactions.

Article 5 Managers should not use the following unfair methods in their business transactions which can damage other competitors:

(1). to feign the others' registered trade mark;

(2). to use the specific name, package, decoration of the famous or noted commodities, or use a similar name, package, decoration of the famous or noted commodities, which may confuse consumers distinguishing the commodities to the famous or noted commodities.