China's Supreme People's Procuratorate (SPP) has released five typical cases concerning the punishment of malicious intellectual property litigation, covering utility model patents, design patents, trademark rights, and unfair competition across multiple intellectual property domains.
Among them, the malicious litigation case of Chongqing Company A v. Chengdu Travel Agency B concerning trademark infringement was selected as one of the typical examples.
Basic Facts
The "Two Rivers Cruise" is one of Chongqing's most iconic urban tourism attractions, with an annual passenger volume exceeding 3 million. The names of the cruise vessels and related commercial signs have gained a certain degree of recognition within the industry through long-term promotion.
Company A, established in 2014, was primarily engaged in website development with tourism as a secondary business. Since 2017, Company A has repeatedly applied to register a number of signs associated with the "Two Rivers Cruise" across multiple classes, including Class 12 (sales of motor vehicles such as boats and ferries) and Class 39 (rental and charter services for yachts and vessels). Following the registration of these trademarks, Company A began collecting information from travel agencies operating "Two Rivers Cruise" ticket services on travel platforms. It subsequently filed seven lawsuits against multiple travel agencies, including Travel Agency B, alleging trademark infringement and seeking injunctive relief and damages. As a result, some travel agencies were forced to remove their "Two Rivers Cruise" ticketing services.
Procuratorial Supervision
In November 2023, several travel companies reported Company A's alleged unfair competition practices to the Yuzhong District People's Procuratorate in Chongqing. After accepting the case, the procuratorate conducted an investigation and established the following key facts:
First, through interviews with relevant parties and consultations with the cultural and tourism authorities, the procuratorate confirmed that the "Two Rivers Cruise" signs had been filed with and used by the vessel inspection authorities, and had acquired a certain degree of recognition within the industry.
Second, upon reviewing the transactional records and trademark licensing documents submitted by Company A, the procuratorate found that the "licensing fees" transaction records were fabricated to support the litigation, and that Company A had not actually used the trademarks in its business operations.
Third, the procuratorate established that Company A had preemptively registered and hoarded "Two Rivers Cruise" signs in an attempt to appropriate public resources, severely disrupting the trademark registration and management order. By abusing its litigation rights to initiate lawsuits against unspecified competitors in the same industry, the company had also severely disrupted the market competition order in the tourism sector.
The procuratorate concluded that Company A had maliciously applied for and hoarded trademarks, and had abused litigation rights to harm its competitors. Such conduct constituted malicious litigation. In January 2024, the procuratorate referred the case to the Yuzhong District People's Court.
On January 25, 2024, the court rendered its first-instance judgment in the case of Company A v. Chengdu Travel Agency B, holding that Company A's conduct constituted a typical abuse of rights and amounted to malicious litigation, and dismissed all of the company's claims. The court also dismissed the claims in the other six cases filed by Company A.
Significance of the Case
Well-known urban cultural and tourism signs carry the historical and cultural identity of a particular region and are of a public resource nature. Where a party preemptively registers such signs, or commercial signs that have been used by others, and subsequently initiates litigation to seek undue benefits — thereby appropriating public resources, undermining fair competition, and hindering the sound development of the tourism economy — such conduct constitutes malicious litigation. In handling such cases, procuratorial authorities should make full use of their investigatory powers to ascertain whether the relevant commercial signs have been used by others, examine the registrant's actual business capacity and use of the trademarks, and review the scope, number, and subjective purpose of the lawsuits filed. A comprehensive assessment of all these factors should be made to determine whether the conduct constitutes malicious litigation.
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