Recently, the Suzhou Intermediate People's Court of Jiangsu Province issued a final judgment in the case of X-Rite, Inc. v. A certain Kunshan Technology and four other defendants regarding trademark infringement and unfair competition.
The client, X-Rite, Inc., is a global professional brand in color trends, science, and technology, headquartered in Michigan, USA.
Focus 1: Does a friendly link constitute trademark infringement?
Final Judgment Reversal: It constitutes infringement!
The court found that the defendants set "爱色丽" (X-Rite's Chinese name) and "X-Rite" as friendly link names, which was essentially using the trademarks for traffic redirection. When users searched for these keywords, the links led to infringing websites to purchase competing products, severing the connection between the trademark and the rights holder. This constitutes trademark infringement as stipulated in Article 57 of the Trademark Law.
Focus 2: Is the use of the domain name legitimate?
Final Judgment Upholding: It constitutes unfair competition!
The court pointed out that the domain name xrite.cn, owned by X-Rite, Inc., has gained high recognition in the optical instrument field through long-term use. The defendants' registration of the domain names chinaxrite.cn/com, which contain the complete trademark, showed malicious intent to free-ride on the goodwill. Objectively, this led to consumer confusion and violated Article 6, Paragraph 3 of the Anti-Unfair Competition Law.
Focus 3: Can a natural person shareholder be exempted from liability?
Final Judgment Reversal: Joint liability!
The court's look-through review found that Mr. Liu, as the legal representative and de facto controller of the three infringing companies, directly orchestrated the infringing acts, including domain name registration and friendly link settings. According to Article 1168 of the Civil Code, Mr. Liu and the related companies were held jointly liable for the infringement.
The key to this case's victory was the integration of fragmented acts of domain squatting, trademark free-riding, and traffic hijacking into a systematic unfair competition model. The appellate court's first-time finding on the "infringing nature of friendly links" provides a new tool for brands to combat gray-area online traffic redirection.
In the digital economy era, domain names and trademarks form a company's core digital assets. The final judgment in this case used a look-through adjudication approach to resolve the dilemma of related company infringement and an innovative application of the law to crack down on online traffic hijacking. This has created a "domain name-trademark-goodwill" integrated protection network for companies. This case was represented by Llinks partner Ms. Cherri Che's team. In the future, Llinks will continue to deeply cultivate cutting-edge intellectual property fields, providing a "law + business" full-cycle solution for innovators.
