## Facts

- Guangzhou Compass Exhibition Service Co., Ltd. (Compass) and Guangzhou Zhongwei Enterprise Management Consulting Services Co., Ltd. (Zhongwei) provided corporate event-planning, management, and consulting services.
- Compass and Zhongwei jointly held an earlier-registered trademark for clothing products (Class 25) that resembled Uniqlo Trading Co., Ltd.’s later-registered branding for clothing.
- Collectively, Compass and Zhongwei held more than 2,000 registered trademarks, including many that resembled well-known brands.
- Uniqlo sold clothing in China using its well-known “UNIQLO” house mark and used wording on products and in marketing that Compass and Zhongwei claimed matched or was confusingly similar to their earlier registration.
- Counsel for Compass and Zhongwei demanded 8 million yen from Uniqlo in connection with Uniqlo’s continued use of the challenged sign.
- Compass and Zhongwei then filed dozens of trademark-infringement actions against Uniqlo; Uniqlo’s parent company, Fast Retailing Co., Ltd.; and Uniqlo retail outlets, including the Shanghai Shipyard Road Store.
- In the action that ultimately reached the Supreme People’s Court, the Shanghai First Intermediate People’s Court found infringement but denied damages because Compass and Zhongwei had never used the disputed trademark in commerce.
- The Shanghai High People’s Court affirmed, and Uniqlo sought a retrial before the Supreme People’s Court.

## Issues

1. Whether a court should support trademark-infringement claims where the right holders engaged in abnormal trademark registration and malicious, profit-driven enforcement, including mass litigation, without genuine trademark use.
2. Whether Uniqlo’s challenged wording and presentation, used together with its “UNIQLO” house mark, justified civil infringement relief under the Trademark Law in light of the case’s overall circumstances.

## Decision

- The Supreme People’s Court revoked the first- and second-instance judgments.
- The court rejected all infringement claims brought by Compass and Zhongwei against Uniqlo and the implicated Uniqlo store.
- The court concluded that Compass and Zhongwei’s trademark-registration and enforcement conduct reflected bad faith and a misuse of trademark rights inconsistent with the Trademark Law’s objectives.

## Legal Principles

- Trademark rights are subject to the good-faith principle; rights obtained or asserted in bad faith may be denied judicial protection.
- The Trademark Law protects marks as source identifiers used in commerce; stockpiling large numbers of marks for transactional or litigation purposes can be treated as abnormal registration and weigh against granting infringement relief.
- Courts may refuse to support infringement actions that function as malicious rights assertion—such as repeated, coordinated lawsuits aimed at extracting settlements or transfer fees—because such conduct harms fair competition and distorts the function of trademark protection.
- In assessing civil relief, courts may consider the right holder’s actual use (or non-use), the broader pattern of enforcement, and whether the defendant’s use is realistically likely to mislead consumers in context (including prominent use of the defendant’s well-known house mark).

## Conclusion

The Supreme People’s Court reversed the lower courts’ infringement findings and denied all relief, holding that Compass and Zhongwei’s abnormal trademark hoarding and malicious, settlement-oriented enforcement—coupled with their lack of genuine trademark use—meant their claims against Uniqlo should not be supported under the Trademark Law and the good-faith principle.


Uniqlo Trading Co. v. Guangzhou Compass Exhibition Service Co., (2018) Zui Gao Fa Min Zai No. 396 (2018)