## Facts

- A clothing company and its affiliates had used the Chinese name “歌力思” as an enterprise identifier since 1996 and registered and widely used it as a trademark for clothing since 1999, achieving substantial market recognition.
- The company also held a registered “ELLASSAY” trademark for certain Class 18 goods (e.g., handbags) and sold products at branded counters inside a department store.
- An individual obtained registration for “歌力思” in Class 18 (wallets, handbags) and had also sought registration for “歌力思及图,” which was ultimately not approved.
- The individual made notarized purchases of the company’s bags at its counters in multiple cities; hangtags stated “Chinese brand name: 歌力思; English brand name: ELLASSAY.”
- He sued the company and the department store for trademark infringement based on his “歌力思” registration and the unapproved “歌力思及图” application.
- The trial court found infringement and awarded damages and other relief; the appellate court affirmed.
- On retrial, the Supreme People’s Court reversed and rejected all claims.

## Issues

1. Whether a plaintiff may bring a trademark infringement action based on a mark that was never approved for registration.
2. Whether use of “歌力思” on product hangtags at the company’s branded counters, together with prominent “ELLASSAY” branding, infringed the plaintiff’s registered “歌力思” mark for Class 18 goods.
3. Whether acquiring and enforcing a trademark in bad faith to target a party’s legitimate prior commercial identifier constitutes abuse of rights, requiring denial of the plaintiff’s claims.

## Decision

- The Supreme People’s Court reversed the lower judgments and dismissed the action in full.
- The court held the plaintiff could not sue on the “歌力思及图” mark because it was not registered and conferred no enforceable exclusive right.
- The court found the company had legitimate prior rights in “歌力思” as an enterprise identifier and earlier trademark, and its hangtag use served to identify the producer in context.
- Considering the sales setting (the company’s own counters), the prominent “ELLASSAY” display, and the company’s market recognition, the court found no likelihood that ordinary consumers would misidentify the source as the plaintiff.
- The court concluded the plaintiff’s acquisition and enforcement of “歌力思” for related goods was in bad faith and constituted abuse of rights; therefore, his infringement claims were not legally supported.

## Legal Principles

- A trademark infringement claim requires an enforceable trademark right; an unregistered, unapproved mark application cannot support an infringement action.
- Prior lawful commercial identifiers (including enterprise names and earlier trademarks) may be relevant to assessing the legitimacy of a challenged use and the risk of consumer confusion.
- Use of a term on hangtags to indicate the producer, in a sales context that clearly identifies the brand owner and does not impair consumer source identification, may be treated as justified and non-infringing.
- Civil and litigation conduct must comply with good faith; a party that maliciously acquires and exercises trademark rights to harm others and disrupt fair competition commits abuse of rights, and courts should deny relief even where formal registration exists.

## Conclusion

The Supreme People’s Court held that bad-faith acquisition and enforcement of a trademark to attack a brand owner’s legitimate prior identifier is an abuse of rights, warranting dismissal of infringement claims, and that unregistered marks cannot be enforced through trademark infringement litigation.


Wang Suiyong v. Shenzhen Ellassay Clothing Co. & Hangzhou Yintai Century Department Store Co., Guiding Case No. 82 (Sup. People’s Ct. Mar. 6, 2017)