The High People’s Court of Guangdong Province (the “Court") recently made a final judgment on the trademark infringement and unfair competition lawsuit filed by INSOMNIAC HOLDINGS, LLC (“INSOMNIAC") against a club in Jiangmen City (the “Club"), upholding the first instance judgment favorable to INSOMNIAC. The Court held that the Club’s use of “EDC"“" and other marks infringed INSOMNIAC’s exclusive right to the registered trademark “" and also damaged “EDC", a service name with certain influence, so the use constitutes unfair competition, and the court therefore ordered the Club to stop the infringement and indemnify INSOMNIAC for its economic losses.

The case is the centerpiece in INSOMNIAC’s online and offline enforcement project for its brand of EDC in the Chinese mainland. Zhong Lun team led by partners Jimmy Huang and Hope Yang advised on the case, and team members included associates Brenda Jin, Alicia Ma and Shishi Luo, among others.

INSOMNIAC is a subsidiary of Live Nation Worldwide, Inc., the world's leading live entertainment company and owner of the electronic music festival brand - Electric Daisy Carnival (abbreviated as “EDC"). In China, INSOMNIAC owns the registered trademark “" on Class 41 services, more specifically, the services of “providing a place of entertainment, providing live performances, etc.". In 2018, INSOMNIAC found out that the Club was using “EDC" “" “" “" “" “" and other logos in its business, so INSOMNIAC entrusted Zhong Lun to file a trademark infringement and unfair competition lawsuit against the Club before the Intermediate People’s Court of Jiangmen City of Guangdong Province.

One of the key issues in this case is to clarify whether the Club provided the entertainment-related services in Class 41 or the catering/bar-related services in Class 43. The Club cited the Classification Manual of Similar Goods and Services and relevant regulations of the bar industry to illustrate that its business should fall into the scope of the bar services in Class 43, which is not similar to the designated services of INSOMNIAC’s registered trademark. To refute such claim and establish trademark infringement, we collected a large amount of evidence, including the live performance provided in the Club, the way the Club called itself, the way the media and consumers described the Club and other aspects, to demonstrate that the Club was an entertainment venue, rather than a catering bar that only provided drinks as it has claimed. Both the first and second instance courts supported our arguments.

Another difficulty lies in how to extend the protection scope of the registered trademark “" to ward off the infringing logos, including pure word mark “EDC" and device mark “". We made our case based on similarities between the logos, the popularity and influence of the mark “", INSOMNIAC’s brand upgrading process, the bad faith of the sued Club, the confusion caused by the disputed use, and the role that judicial activities could play in effectively stopping the infringement in this case. Finally, we convinced both the first and second instance courts. The second instance court held that all infringing marks constituted similar marks to “".

The Court’s determination on the protection scope of “" mark and the finding that “EDC" constitutes a service name with certain influence exerts a significant influence on INSOMNIAC’s subsequent IP enforcement actions. This judgment could strongly support INSOMNIAC’s enforcement of rights to its EDC brand on online platforms like WeChat, Douyin, and Dianping.com. INSOMNIAC is not the only one that will benefit from the case, as arguments in the judgment will prove enlightening for future cases, most notably, in legal issues such as what are the standards in determining similar trademarks and services in trademark infringement cases, whether a trademark registrant could file lawsuits against previous trademark infringements based on a trademark it acquires after the infringement occurs, and how to deal with the overlap between trademark infringement claims and unfair competition claims.