This case is a typical case of unfair competition involving infringement of product name and trade dress (distinctive product name, packaging, and trade dress that have certain influence).

The plaintiff in the first instance (hereinafter referred to as "Changxing") was established in 2001 and is a high-tech company specializing in the research and development, production and sales of thread-connection sealing materials. Since May 2018, Changxing Company has started to use "三圈" (San-Quan, Three-Circle in Chinese), "三圈带" (San-Quan Tape) and "三圈密封带" (San-Quan Sealing Tape) as the names of the new type of thread-connection pipe sealing tape, and the red-letter "三圈" (San-Quan) as the special trade dress of packaging materials for publicity, and promote the product through the official website, WeChat customer service, Douyin, Taobao platforms, as well as intensive participation in offline exhibitions, on-site promotion in various provinces and cities. After the high-density use and promotion of Changxing, the "三圈" (San-Quan) sealing tape has gained a high reputation in the field of thread-connection sealing tape. Before April 2019, the products have been sold to more than 150 cities across the country. 

The defendant in the first instance Botou Huateng Sealing Material Factory (hereinafter referred to as Huateng) is an individual industrial and commercial household established in 2019 and also located in Hebei Province. Huateng Factory’s operator Lu Wenbo began to promote and sell “升级版三圈密封带” (Upgrated San-Quan Sealing Tape) in his WeChat moment in April 2019. It competed with the plaintiff's products across the country with inferior and low-priced products, seizing the plaintiff's market, and causing confusion and misunderstanding of the source of the goods by consumers and businesses.

The defendant in the first instance, the Zhuoyue Hardware Business Department (hereinafter referred to as the Zhuoyue) is an individual industrial and commercial household in Tiexi District, Shenyang City, Liaoning Province, mainly engaged in the retail and wholesale of hardware and building materials, and sold infringing products produced by the defendant Huateng in the store.

Nancy Qu’s team of Chang Tsi & Partners (hereinafter referred to as “Qu’team”), after engagement, thoroughly studied the case, analyzed the requirements of Changxing, proposed the litigation strategy based on the feedback of Changxing, complete the high-density evidence collection within about one month, and file a lawsuit to the Shenyang Intermediate People’s Court on November 27, 2020. During litigation, Qu’s team communicated closely with Changxing, constantly supplemented and collected evidence in response to the development of Changxing’s brand promotion and Huateng’s continued malicious infringement, drafted detailed agency opinions and cross-examination opinions, promoted Changxing's general manager to appear in court to tell the court clearly the story of the "三圈" (San-Quan) brand development and point out Huateng’s negative personality. Qu explained that the "三圈" (San-Quan)  name and the red-letter "三圈" (San-Quan) trade dress have the function of influencing and identifying the source of the goods from a legal perspective and point out that Huateng’s actions constituted malicious attachment and unfair competition that affected the name and trade dress of the product to a certain extent，eventually persuaded the court of first instance to support the plaintiff’s claims, including stopping unfair competition, apology for publication, and compensation RMB 650,000 for losses. During the second instance trial, Qu’s team continued to provide evidence against the plaintiff’s continuing malicious infringement, actively communicated with the court, appeared in court with the general manager of the client and cooperated with each other, and successfully persuaded the second instance court to reject the appeal and maintain the original judgment. 

The verdict determined that "三圈" (San-Quan) constitutes a certain influential product name,  the red-letter "三圈" (San-Quan) trade dress constitutes a distinctive trade dress with certain influence, which effectively protects the "三圈" (San-Quan) brand that customers have worked hard to manage in the case where the customer’s "三圈" (San-Quan) text mark has not yet been registered, and also laid a solid foundation for combating clinging behavior in the field of thread-connection pipe sealing tape and will helping the customer's "三圈" (San-Quan) word mark to be registered.

In the case that the customer has not yet obtained trademark registration for the "三圈"(San-Quan) text, and the product has been severely counterfeited after being introduced to the market for only ten months, successfully protected the unregistered "三圈"(San-Quan) through the product names and decorations that have certain influence trademark. This case created a good precedent for the determination of " distinctive product name, packaging, and trade dress that have certain influence" under the framework of the Anti-Unfair Competition Law. The court of first instance and second instance flexibly used the judicial spirit of Article 1 Paragraph 1 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Unfair Competition" regarding the consideration of factors for identifying well-known commodities, through comprehensive consideration of the plaintiff’s product sales time, area, sales and sales target, the duration, degree and geographical scope of the promotion, as well as the apparent maliciousness of the defendant’s actions, the plaintiff’s "三圈"(San-Quan) name and the red-letter "三圈"(San-Quan) trade dress were provided a strong protection. 

The judgment in this case greatly encouraged SMEs to cultivate their own brands, cracked down on free-riding and free-riding behavior, reflected the judicial policy of providing strong protection of intellectual property rights, and had a very positive impact on the creation of an honest and trustworthy business environment.