China’s Haidian District People’s Court of Beijing city on December 31, 2021 ruled in favor of three media conglomerates Beijing iQIYI Science and Technology Co., Ltd. (北京爱奇艺科技有限公司), Hunan Broadcasting System (湖南广播电视台), and Hunantv.com Interactive Entertainment Media Co., Ltd. (湖南快乐阳光互动娱乐传媒有限公司) in a lawsuit brought by Chinese virtual reality device maker Beijing Shenlinqijing Culture, Inc. (北京身临其境文化股份有限公司) alleging the defendants infringed its trademarks and seeking 10 million yuan ($1.6 million) in damages.
Founded in 2011, Beijing-based Shenlinqijing is a National Equities Exchange And Quotations (NEEQ)-listed company producing and distributing VR products and content. It managed to register the exclusive rights to three 身临其境 (pinyin: Shen Lin Qi Jing, meaning “(as if) physically present”) trademarks with goods or services in Class 38 “communication services” and Class 41 “education and entertainment services” with the Trademark Office of the China National Intellectual Property Administration before January 28, 2018.
The Sound (Chinese: 声临其境, pinyin: Sheng Lin Qi Jing, meaning “vocally present”) is a Chinese reality television competition that first aired on Hunan TV, a Hunan Broadcasting System’s unit, on January 6, 2018. The show was also available on two online portals operated by iQIYI and Hunantv.com Entertainment respectively. Three seasons of the show had been produced and broadcast to great acclaim until April 2020.
Shenlinqijing filed a lawsuit with the Haidian District People’s Court of Beijing city in 2020 claiming the three media companies infringed its trademarks with their similarly named TV show. It said the advertising and marketing campaigns conducted for the show were likely to create forward as well as reverse consumer confusion with the VR company.
The trial court found that the身临其境 trademarks were quite different from the 声临其境 show name in meaning with their similarly sounded first Chinese characters being different in writing, despite the same remainders of the four-word phrases. The court also said trademarks were not the only sources audiences or consumers used in identifying shows or video products, affirming no likelihood of confusion in any sense between goods or services using the marks.
The doctrine of reverse confusion was first applied in 1976 in the US and has since been recognized by most courts. Reverse confusion occurs when the second user becomes better known than the first user. Typical consumer confusion occurs when the second user of a mark ‘cashes in’ on the goodwill generated by the first user of that same mark. In reverse confusion, the first user loses the opportunity to control its own reputation and goodwill. Consumers even disrespect the first user assuming the second user is the original. The first user is virtually always the prevailing party in any trademark litigation.
The court also found that plaintiff Shenlinqijing’s one allegedly infringed trademark had not been commercially used for three consecutive years after registration. Article 49 of Paragraph 2 of the Trademark Law of the People’s Republic of China provides that any entity or individual can file for a revocation proceeding on a trademark for its three-year continuous non-use. In addition, the airing time of the first episode of the show was prior to the registration time of this unused trademark.
The trial court ruled for the defendants and rejected the plaintiff’s claims at the end of 2021.
The case docket no. is （2020）京0108民初25515号, whose English transliteration is 25515, first instance (初), civil case (民), (2020) Haidian District People’s Court of Beijing city (（2020）京0108).