Elite model treads a trademark victory in Shanghai

In the fashion world usually wins who has personality, beauty and charisma. However, in the Intellectual property world wins who protects its own right and fights for them and this particular detail is stuck in the mindset of Elite licensing company SA (hereinafter referred to as "elite company") and that characterize it as the most famous model agency company.

Elite company is the owner and Licensor of the relevant rights and interests of the world-famous "Elite Model Look” and “Eliteworld model competition", and the owner of its most famous registered trademark "  " (No. 10099486 in class 41, registered in 2014).  

During 2016 and 2017, Elite Company found that the defendants Xing Kong Fashion Culture Communication (Shanghai) Co., Ltd. (hereinafter referred to as Xing Kong Company) and Chongqing Xing Yuan Culture MediaCo., Ltd. (hereinafter referred to as Xing Yuan Company) used the same or similar logo as the registered trademark involved in the publicity and promotion of a model competition held by Xing Kong Company: “2016 Xing Kong Elite Model Competition (2016星空精英模特大赛)” and “2017 Xing Kong Elite Model Competition (2017星空精英模特大赛)”. 

Such an act constituted an infringement on the exclusive right to use Elite trademark, so it started a litigation to Shanghai City Xuhui Dist. People’s Court, requiring the two companies to stop the infringement, eliminate the impact and compensate for the losses.

After the hearing, the court of first instance held that Xing Kong company and Xing Yuan company used the same or similar trademark as the registered trademark of Elite company on the same or similar services without the permission of the trademark registrant, which constituted an infringement on the exclusive right and ordered the two companies to stop the infringement.

Also, the Court ordered to Xing Kong company to eliminate the impact and compensate the Elite company for the economic loss of 3.5 million RMB and the reasonable expenditure of 122,302 RMB. While, the court considered Xing Yuan company to be jointly and severally liable for the above compensation within the range of 300,000 RMB.

However, Xing Kong company refused to accept the judgment of first instance and appealed to Shanghai Intellectual Property Court.

In his opinion, according to an “Entrusted Agency Agreement” between the outsider company T-Event and Elite Company, T-Event is the sole organizer of “Elite Model Look China (EMLC)” and “Elite Model Look Asia Pacific (EMLAP)”, within ten years after 2009, and has the right to use the logo involved in the dispute, as well as the right to assign all or part of the rights and obligations under the agreement to the affiliates directly or indirectly controlled by T-EVENT Company.

Xing Kong Company and T-Event Company are affiliated companies. Based on this affiliation, Xing Kong company argued that it has the right to hold the competitions involved in the case. The acts involved by Xing Kong Company do not constitute infringement. During the second instance, in order to prove its claim, Xing Kong Company submitted 15 pieces of evidence to prove its right to hold the events involved.

Elite Model Look show in Shanghai, source: Elite Model

Shanghai Intellectual Property Court found that:

1. The trademark by Elite company to T-Event is on class 9, 14, 18 and 25, service mark is not included. And therefore was not the trademark involved in the case.
2. Although the “Entrusted Agency Agreement” agreed that T-Event company could transfer its rights and obligations under the agreement to affiliated companies, the Agreement also provided that: 

“Upon prior written notice to the Principal, the Agent may assign all or part of its rights and/or obligations under this Agreement to an affiliate, subsidiary, holding company or subsidiary of a holding company over which it may have direct or indirect control”,

“Notices or communications from either party to the other shall be sent by certified mail (return receipt requested) or facsimile (with subsequent confirmation by certified mail with return receipt of notice) to the parties at the following address: ...... and shall be deemed to have been received by the recipient on the day before the date of receipt of return receipt (if sent by certified mail) or the date of reply by the recipient's facsimile machine (if sent by facsimile).

The notice shall be deemed to have been received by the addressee. In the event of a change of mailing address, the other party shall be notified in writing within thirty (30) days.”

Such notice was never sent to Elite Company and thus, the competition held by Xing Kong Company is not the competition agreed in the Agreement between Elite Company and T-Event Company. Shanghai Intellectual Property Court upheld the 1st instance decision that the use of logos made by Xing Kong Company constitute trademark infringement against Elite Company.

One thing to be noted is that in 1st instance trial, Xing Kong Company provided a confirmation letter dated June 18, 2009 sent by Alain Attia from Paris, as President of Elite, to David Lim and T-EVENT confirming the authorization of the trademark (original copy provided).

The letter reads: Alain Attia, on behalf of Elite, confirms that T-EVENT has the right to use the trademark “Elite Model Look” and the trademark “Elite” for the purpose of organizing and promoting the activities related to Elite Model Contest in China and the Asia-Pacific region. The license fee is free of chargeand T-EVENT has the right to sublicense the above trademarks to any third party for the period from 2009 to 2019, in accordance with the proxy agreement.

Elite argued on this evidence, stating that: 

• the confirmation letter is extraterritorial evidence and has not been certified by a notary, so its authenticity and legality are not recognized;
• from the handwriting of Alain Attia's signature, it is different from the handwriting on the Entrusted Agency Agreement signed only one month apart, with a number of pretensions, pauses and unnatural bends, and the order of strokes is also inconsistent, which is an obvious deliberate imitation;
• from the content of the letter, the confirmation letter is based on the Entrusted Agency Agreement, but the trademarks authorized in the letter are not reflected in the "Entrusted Agency Agreement" at all, and the trademark "Elite" was registered in 2014.  The letter of confirmation was submitted by Xing Kong Company after the first pre-trial meeting of thefirst instance, and its timing was suspicious and seemed to be "tailor-made" according to the trademark claimed by Elite.

1st Instance Court held that, according to Xing Kong's evidence and statements, the evidence was formed extraterritorially and originated from T-EVENT, a company established under English law and with its registered office in Hong Kong, and although Xing Kong Company provided the original copy, it did not fulfill the relevant certification procedures regarding the formation or origin of the evidence, so it had no evidentiary effect. 

Also, Xing Kong Company did not give a convincing and reasonable explanation on the doubts raised by Plaintiff, therefore 1st Instance Court did not adopt this evidence.