Anhui: First online infringement case on corporate name right concluded

The Intermediate People's Court of Huainan City, Anhui Province recently concluded an online infringement case on corporate name right, where Huainan Harmony Maternity Hospital (defendant) inappropriately linked its portal website with the name of another hospital, Huainan Beauty Hospital (plaintiff), to misguide the public when they searched information via baidu.com.

The court eventually ruled that the defendant must make a written apology on newspaper to the plaintiff publicly and was fined 71,600 yuan as compensation.

During the investigation, the court found that Huainan Harmony Maternity Hospital was established in 2010 while Huainan Beauty Hospital in 2009. In 2011, the defendant promoted its portal website via the ranking auction service provided by Baidu.com and kept its service registration information including the login name and password itself.

The ranking auction service, provided by Beijing Baidu Netcom Science and Technology Co., Ltd., operator of baidu.com, allows consumers to promote their websites online by listing their websites at the top of the search page when several relevant key words that directly link to their websites are put into the searching engine.

In May, 2011, the plaintiff found that someone had infringed its name right on baidu.com, and immediately filed an application for evidence preservation to a local public notary office, which confirmed later that when the key words "Huainan Beauty Hospital" and “Huainan Beauty Women’s Hospital” were put into the searching engine, results of Huainan Beauty Hospital which actually linked to the website www.hmfc120.com (the defendant’s portal website) popped up. After clicking the link, the portal website of Huainan Harmony Maternity Hospital instead of Huainan Beauty Hospital appeared.

In addition, the statistics in baidu’s database proved that from April 28 to June 21, 2011, the defendant logged in its baidu account and set the linkage between the above two key words with its own website address.

In June, 2011, the defendant was brought to court and charged with corporate name right infringement. On July 2, 2011, the infringing activity was ordered to be stopped.

The court believed that after the registration of a corporate name is approved and ratified, the right holder is entitled with the exclusive right within the limits prescribed. One of the most important roles played by a corporate name is to distinguish one company from another, particularly to avoid confusion among competitors in the same industry.

In this case, as a newly-established medical entity, Huainan Harmony Hospital abused the use of the corporate name which belonged to Huainan Beauty Hospital to deliberately mislead the public in an attempt to steal business from the plaintiff. The defendant had to bear the corresponding tort liability as its activity had, to some extent, damaged the legitimate rights of the plaintiff.

This is the first case of corporate name right violation in Huainan, which has a significant impact in the local area.