Law & Practice

CHINA: Beijing Higher People’s Court Dismisses AWS Appeal

Published: February 17, 2021

Zhimin (Grace) Gong Lifang & Partners Beijing, China INTA Bulletins Committee—China Bulletin Subcommittee

Chris Fung Lifang & Partners Beijing, China

Verifier

Yueqin (Cathy) Wu Watson & Band Shanghai, China INTA Bulletins Committee—China Bulletin Subcommittee

Amazon.com, Inc., and a codefendant in China were ordered in a judgment released December 30, 2020, to cease use of AWS trademarks in the country and pay millions in damages and expenses to a domestic Chinese company.

The Beijing Higher People’s Court issued its judgment in the case Beijing Yanhuang Yingdong Technology Development Co. Ltd. v. Amazon ICT services (Beijing) Co. Ltd., and another, (2018) Jing Min Chu No 127.

Beijing Yanhuang Yingdong Technology Development Co. Ltd. (Yanhuang), the plaintiff, is the owner of the Chinese-registered AWS trademarks, nos. 4249189, 8967031, and 8967030, the first of which dates back to September 2004. The trademarks cover several classes of goods and services. Amazon ICT services (Beijing) Co. Ltd. (Amazon), the defendant, is an affiliate of Amazon.com, Inc., and Beijing Sinnet Technology Co. Ltd. (Sinnet), the second defendant, entered an operation agreement with Amazon in August 2016. Both defendants used the mark “AWS logo” and “AWS” to refer to Amazon Web Services, such as in “AWS cloud computing services,” “AWS technology,” “about AWS China,” and “AWS is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of cloud infrastructure and cloud computing services for businesses across the world.” In July 2018, Yanhuang lodged a lawsuit asserting that Sinnet and Amazon infringed upon its exclusive rights to the AWS trademarks.

In the judgment, the Court considered two main issues: (1) Did Amazon and Sinnet infringe upon Yanhuang’s trademark rights? (2) If infringement occurred, what liability should Amazon and Sinnet bear?

The Court dismissed Sinnet’s claim that they used “AWS” only as a technical term, rather than as a trademark. It noted that the AWS marks displayed on the defendants’ websites and WeChat accounts should be considered as identifying the source of goods or services, and therefore were sufficient to constitute trademark use.

The AWS marks used by Amazon and Sinnet are either similar to or the same as the plaintiff’s trademarks for infringement purposes, with the same letters, same pronunciation, and an indistinguishable meaning.

Cloud and computer software are similar products or services, considering their purpose, content, means, customers, and sales channels.

The concept of “confusing and misleading” includes not only the likelihood of defendants’ goods or services being mistaken as the trademark owner’s goods or services, but also the other way around. The latter applies in this case, considering Amazon’s reputation, and the plaintiff had evidence to prove this.

Regarding the first issue, the Court made its decision using a four-step test:

  1. Is the defendants’ use of the marks considered trademark use?
  2. Are the defendants’ marks similar to the plaintiff’s registered trademarks?
  3. Are the defendants’ goods or services bearing the marks similar to the goods or services designated for the registered trademarks?
  4. Was any confusion caused?

Regarding the second issue, the Court found that Amazon and Sinnet should bear joint responsibility to stop their infringing use of the AWS marks, make a declaration in China Intellectual Property News to remove any adverse effect caused by their infringement, and jointly pay damages amounting to 5 percent of Sinnet’s profits made from providing cloud services in 2017 and 2018.

It is noteworthy that the Court eventually awarded double punitive damages based on two factors:

  1. Amazon Technologies filed an application for AWS MARKETPLACE that was rejected in 2013 on the basis of a citation of Yanhuang’s no. 4249189 trademark “AWS.” Amazon Technologies, Inc.’s application for “AWS and device” in 2017 was also rejected due to Yanhuang’s “AWS” marks. This demonstrates Amazon’s knowledge of the plaintiff’s prior trademarks and as a result, is regarded as evidence of malicious conduct.
  2. Amazon and Sinnet delayed the proceedings by abusing their procedural right and pursuing jurisdiction objection on obviously untenable grounds, further exacerbating the plaintiff’s losses.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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