China fines five fake ‘Disney hotels’ in Shanghai ahead of giant theme park opening

Shanghai has fined a hotel chain for infringing on Disney’s trademarks at five of its branches as part of an effort to protect the US entertainment giant’s brand in the run-up to the opening of its theme park next year.

The five hotels owned by the Shenzhen Vienna Hotels Group in Pudong district, where the theme park is due to open in the first half of next year, were found to have used the Chinese characters for Disney on their signboards, websites and electronic displays in their lobbies without authorisation, the Shanghai regulators said.

“Some of the hotels are more than 10km away from Disneyland. They misdirect customers to very far away places in the name of Disney. This kind of behaviour exploits Disney’s trademarks and goodwill and will cause real damage to its trademarks,” Xinhua quoted the regulators as saying.

The establishments had infringed trademark rights, and some were suspected of unfair competition, the report said. The hotels were fined a combined 100,000 yuan (HK$121,000).

The hotels had put the Chinese characters for Disney in brackets, in some cases along with street names, after their chain name – Shenzhen Vienna International Hotel.

One declared itself the “Disney branch”, despite being more than 15km from the site of the park.

The investigation into the hotels followed a complaint by Disney in the first half of this year, Jiefang Daily reported.

The fine comes three weeks after the State Administration for Industry and Commerce announced a nationwide, year-long campaign to protect Disney’s trademarks by stamping out knock-off goods.

Lin Wei, a Shanghai-based intellectual property lawyer, said the behaviour of the hotel chains was likely to amount to unfair competition, because they advertised themselves and misled customers into believing they were connected to Disney.

The Disney theme park under construction in China. 

“Because Disney is an internationally known trademark, [companies] should be authorised by Disney before using [its name] for publicity purposes,” Lin said.

But Xu Xinming, an intellectual property lawyer in Beijing, said whether a hotel had infringed Disney’s trademarks depended on various factors, not only whether the term Disney was used.

“Firstly, it depends on whether the name will cause confusion among customers. Secondly, we need to judge whether the company had the intention to cash in on [Disney’s name],” Xu said.

Xu said if a hotel near Disneyland was only using the word Disney to best describe its location – without an intention of attracting customers from the real Disney hotels – it might not be a trademark infringement.