Summary of Key Points
Recently, there has been a surge in trademark infringement cases within the hospitality industry. Events such as the "Orange Hotel" in Henan being sued by "Juzi Hotel" and the "Ziwei Jinjiang Hotel" in Changsha being claimed compensation by "Jinjiang Star" have attracted public attention. Many netizens sympathize with the small businesses, believing that large companies are "bullying" individual operators. However, behind these cases lies a trend where some former owners of closed chain hotels are trying to "leech off brand popularity" (for example, changing names from "Quanji" to "Quanli" or "Jinji"), coupled with the weak trademark awareness of smaller businesses. Court rulings generally favor the brand owners, based on legal principles such as "confusion before sale" and the obligation to avoid using well-known trademarks, rather than simply considering the size of the parties involved. The industry also advises small businesses to check for trademarks in advance to mitigate risks, and suggests that brands can adopt more gentle approaches to protecting their rights.
Why Have There Been a Sudden Increase in Hotel Trademark Infringement Cases Recently?
There are two main reasons:
1. The closure of chain hotels has led to the phenomenon of "brand theft": In recent years, giants like Jinjiang, Huazhu, and Shoulu Rujia have closed over 2,000 stores. Many of these closed locations have not actually shut down but have changed their names to similar ones and continued operating—such as changing "Quanji" to "Quanli" or "Jinji"—in an attempt to tap into the popularity of well-known brands and deceive customers into thinking they are still part of the chain.
2. Weak trademark awareness among small businesses: Many small business owners assume that registering a name with the authorities means they are safe, but in reality, a company's name and its trademark are separate entities. The registration process only checks for local name conflicts, not whether the name infringes on another company's trademark. For instance, the owner of "Orange Hotel" might not have known that "Juzi" is a registered trademark and thought using a similar-sounding word would be fine, only to find out they were in violation.
Why Do Courts Always Side with Brand Owners?
The key reasons are as follows:
Take the case of "Jinji Hotel vs. Quanji Hotel" as an example. The court's decision was not based on the idea that a large company was bullying a small one, but rather on these legal principles:
1. The obligation to avoid using well-known trademarks: "Quanji" is a well-known brand in the hospitality industry, and anyone opening a hotel would be aware of it. Even if there is a legitimate reason for choosing a name (such as "Jinji" being derived from the Jinshan district or a partner's surname), they must avoid using it to prevent confusion with the brand.
2. Confusion before sale constitutes infringement: Although the facilities and services at "Jinji Hotel" may differ significantly from those at "Quanji Hotel," consumers might not notice the difference (since there is no confusion during or after booking). However, if a customer searches for "Quanji" on a platform like Ctrip and accidentally clicks on "Jinji," this could lead to confusion and result in the loss of business for "Quanji Hotel," which constitutes infringement.
3. Intent is crucial: If there are multiple possible names available and one is deliberately chosen to be similar to "Quanji," it is difficult to argue that there was no intent to "leech off" the brand's popularity.
Public Opinion Sympathizes with Small Businesses, but the Law Does Not Focus on Power Differences
Netizens may feel that large companies should not target small businesses for amounts like 100,000 yuan in compensation, and some even joke about whether eating oranges constitutes trademark infringement. However, the law aims to prevent consumers from being misled. If everyone uses similar names, customers might encounter multiple results when searching for a particular brand, leading to confusion and potential harm. The "weakness" of small businesses is not a valid defense against trademark infringement; in the eyes of the law, whether you are a chain hotel or a small business, trademark infringement must be addressed.
How Can Small Businesses Avoid Infringements?
Small businesses should check for trademarks before opening a new store. The national trademark database offers free searches, allowing you to see if a desired name is already registered (especially in the same industry). Don’t wait until you receive a legal notice to realize the issue—for example, "Orange Hotel" could have avoided trouble by checking in advance.
Can Brands Protect Their Rights More Gentlely?
Many brands opt for direct legal action, which can lead to public backlash. The industry suggests that brands should first try to negotiate with local authorities, such as having the authorities communicate with the business owner and urging them to change the name, without necessarily pursuing compensation. This approach protects the brand’s rights without appearing aggressive.
In conclusion, while names can be similar, services and experiences cannot be copied. For brands, protecting their trademarks is essential for maintaining their reputation; for small businesses, attracting customers through unique offerings is a more sustainable strategy. After all, what consumers ultimately care about is a comfortable stay, not the similarity of names.