Wednesday, February 18, 2009

Yellow Cranes, Will You Return? (Republish)


The Yellow Crane Tower

Forefathers departed on yellow cranes,The Yellow Crane Tower

leaving this spectacular tower empty.

Yellow cranes will not return,

leaving the white clouds for millennia without companion.

–by Cui Hao (704-754 A.D.), Tang Dynasty

This poem has remained one of my favorites, throughout my education in China. In college in the city of Wuhan, I passed by the truly spectacular Yellow Crane Tower hundreds of times while commuting to and fro Hankou, marveling at its beauty and historical significance. It looks beautiful when you observe it on the First Bridge over theYangtze River (Chang Jiang, for Chinese readers), as it sits on the Snake Hill, stretching into the clouds over the ever grand Wuhan stretch of the Yangtze. Before I get carried away with nostalgia and poetry, I’d better move on to Chinese business law.Luckily, I get to return to the “Yellow CraneTower” for this post on cybersquatting law inChina.

As reported,Yellow Crane Tower Tobacco Company (“TCTTC”) is one of the most famed tobacco companies in Wuhan and throughoutHubei Province. And when it sought to register the www.YellowCraneTowerTobacco.cndomain name in Chinese (Huanghelou) in June 2005, it found, to its dismay, that domain name had been registered by a certain Mr. Deng, a restaurant owner in Jiangxi Province.TCTTC further found that Mr. Deng also had registered a slew of domain names using the core words “Yellow Crane Towner,” such,, etc.

Naturally, TCTTC took Mr. Deng to court, in the Wuhan Intermediate People’s Court.

TCTTC sued Deng for trademark infringement in the form of cybersquatting. Since the central issue here is whether Deng’s registration of the domain names using the TCTTC’s registeredword mark constitutes trademark infringement, the 2001 Several Explanations on Domain Name Civil Disputes (“Domain Name Explanations”) issued by the China Supreme People’s Court apply in this instance. The Domain Name Explanations expressly provide that a mark owner can ask a court of competent jurisdiction to determine whether its mark is famous, and the court may order the cancellation of the infringing domain name if it finds unfair competition, and monetary damages are also available to the victorious plaintiff. Upon request, the Court may also order the transfer of such infringing domain name to the plaintiff. See Arts. 4-8.

To prevail, TCTTC must prove that its marks were infringed and they were famous prior to Defendant’s use. The Court found TCTTC’s marks well known, the “Yellow Crane Tower” word mark and the “Yellow Crane Tower” design mark, both of which were used by Defendant in his website. In finding these marks well-known, the Court looked to the scope and expenses of advertisement for the marks, and it cited the reputation of products bearing the marks.

Upon finding the marks in question well-known, which is the prerequisite to prevail in a domain name cancellation dispute, the Court also found infringement in Defendant’s unauthorized use of the marks in question. It reasoned that both domain names and trademarks have the quality to help consumers relate to the source of goods and services.Given that shared quality of trademarks and domain names, Defendant’s use of TCTTC’s word mark could confuse consumers, despite the unrelated nature of the parties’ trades, one in restaurant while the other in tobacco.Further, the Court disagreed with Defendant’s argument that he did not have the intent to ride on TCTTC’s trademarks to gain economic advantages, because, as the Court stated it is obvious that Defendant’s use of a well-known mark as the core for his domain names was to obtain more economic opportunities, and such use was marked with commercial intentions.

This is easy win for TCTTC here. Of course, Plaintiff had an obvious home court advantage. The “Yellow Crane Tower” brand is very well-known in Wuhan, because it is a local trademark. Even though I am not a smoker, I knew that brand while I lived inWuhan. There was advertisement everywhere in the city. Though the Court may be suspected of local protectionism, I still think it just applied the black letter law. I do not see the Court straining to protect a local player while “screwing” an outsider. Another thing noteworthy here is that Plaintiff can get either the infringing domain names canceled or transferred. I would want a transfer.

So, with a win for the local player, the “Yellow Cranes” should be able to return toWuhan upon a transfer. And that should make TCTTC happy.

But, will the “real” yellow cranes return after millennia of absence? Poets wait on…

1 comment:

Danielle said...

Hello Brad Luo
Can i have you comment on whether you believe China's legal institutions are adequate in protecting foreign investors?

You can contact my personal email at