[Case Number]
First instance: The Primary People’s Court of Yangpu District of Shanghai Municipality (2019) Hu 0110 Min Chu No. 17713
Second instance: Shanghai Intellectual Property Court (2021) Hu 73 Min Zhong No. 432
[Basic Facts]
The plaintiff G** is a world renowned fashion designer, and the other plaintiff **ni S.p.A. is a company founded by Mr. G**. The brand *ni operated by both Mr. G** and **ni S.p.A. has become well-known to Chinese consumers after decades of development. The two plaintiffs claimed that Mr. G**’s Chinese name “乔某” and English name “G**”, as well as **ni S.p.A.’s Chinese trade name “乔某” and English trade name “G**”, have gained high popularity and influence worldwide through long-term operation and business publicity activities, and should be protected by law.
The defendant Yang, by forging the authorization of Mr. G** and fabricating his identity as an “*ni designer”, engaged in business activities of authorizing others as so-called “*ni” franchisees for the purpose of gaining economic benefits. The defendant Zhang promoted Yang’s false identity as an *ni designer using his Weibo and blog. Besides, Zhang also promoted Yang’s false identity by publishing his autobiography “Flawless”. The two plaintiffs jointly filed a lawsuit with the court, requesting that Zhang and Yang be ordered to cease their infringement, eliminate the adverse impact, and compensate for the corresponding economic losses and reasonable expenses in the aggregate of RMB 3.2 million.
[Judgment]
The court of first instance held the view that Yang and Zhang were in competition with Mr. G** and **ni S.p.A., and that their acts together constituted false advertising and unfair competition through unauthorized use of other’s influential company name and personal name. The court therefore ordered the two defendants to cease their infringement, eliminate the adverse impact by publishing an apology in newspaper, and compensate the plaintiffs RMB 3.2 million including economic losses and reasonable expense.
Zhang refused to accept the first-instance judgment and appealed, arguing that he was not aware of Yang’s fictitious identity and forged authorization, and that he did not and should have not known Yang’s false identity due to the latter’s deceptive acts, so he should not bear civil liability for Yang’s infringement.
Shanghai Intellectual Property Court, as the court of second instance, held the view that both **ni S.p.A and Mr. G** himself were well-known, and that the letter of authorization provided by Yang had obvious defects such as grammatical errors, inconsistent formats, and different signatures. As a well-educated businessman engaging in the clothing industry for many years, Zhang should have the obligation and responsibility to review his partner’s qualifications and business resources. Zhang is fully capable of doing a review on Yang or verifying with the affiliates of **ni S.p.A in China. However, he did not do any review but expanded the impact of Yang’s infringement with a range of promotional activities. The cooperation between Zhang and Yang caused the damage in this case, and both of them should jointly bear the civil liability for compensation. Therefore, the court dismissed the appeal and affirmed the original judgment.
[Significance]
In this case, Yang fabricated his identity, and then Zhang and Yang jointly used Yang’s fabricated identity to carry out false advertising and used the right holders’ personal name and company name without authorization. Such cooperation between the two defendants caused the damage in this case, so they should jointly bear civil liability for compensation. Some business operators hope to take a free ride and quickly gain illegal profits by counterfeiting celebrities or well-known brands. Joint operators should carefully review the personal names and company names of others with certain influences used by their partners. If they not only fail to do a review, but allow the counterfeit behaviors of their partners, or even uses their partners’ fake business resources to gain illegal benefits, they will be held jointly liable accordingly together with the counterfeiters.
