A small guesthouse in Xianyang, Shaanxi Province, named "Orange Inn," faced a lawsuit from the chain brand "Orange Hotel" for trademark infringement and unfair competition, with the chain claiming 100,000 RMB in damages. The court of first instance confirmed the infringement and set the compensation at 8,000 RMB. The inn appealed, arguing it had no intent to ride on the brand's reputation and that its small scale would not cause consumer confusion. On September 22, the Xianyang Intermediate People's Court issued a final ruling, dismissing the appeal and upholding the original judgment.
The Xingping People's Court's first-instance findings established that the plaintiff, a company established on April 4, 2006, with a registered capital of 269 million RMB, operates in hotel management, commercial property leasing, accommodation, and catering services. It runs both directly-operated and franchised outlets across multiple cities nationwide and has garnered numerous industry accolades. The company is the registered owner of trademark No. 7300545 for "Orange Hotel," No. 11460574 for "Orange Hotel Select," and No. 7300539 for a related hotel brand.
The defendant inn was registered on September 4, 2020, with a business scope covering accommodation services and food operations. According to notarized evidence, the inn used the names "Orange Inn" or its registered business name on platforms like Meituan, Ctrip, eLong, Qunar, Tuniu, and Tongcheng Travel for its operations. Its background wall prominently featured the characters "Orange." These apps displayed the inn's location, photos, room bookings, details, and customer reviews.
The plaintiff's primary demands included an order for the defendant to immediately cease infringing on its trademark rights, alter or remove all "Orange" branding from websites, the inn's signage, and its interior, and refrain from using identical or similar marks. Additionally, the plaintiff sought an end to unfair competition practices, a change of the enterprise name to remove the "Orange" characters, and compensation of 100,000 RMB for economic losses and reasonable enforcement expenses.
The first-instance court determined that the plaintiff holds valid trademark rights within their term, and these rights are legally protected. "Orange" serves as the core element of the disputed trademarks and the primary identifier for consumers to distinguish service providers. Through long-term use and operation, the "Orange" hotel series has achieved notable recognition in the accommodation market. The defendant's hotel services matched the approved service categories of the plaintiff's trademarks. The defendant's actions could lead ordinary consumers to confuse the source of services, thereby infringing the plaintiff's registered trademark rights. Moreover, the defendant's use of "Orange" in its enterprise name could mislead consumers into believing an affiliation exists, harming the plaintiff's interests and constituting unfair competition.
Considering the fame of the trademarks, the defendant's subjective fault, operational duration, scale, location, and the plaintiff's reasonable enforcement costs, the court set the compensation at 8,000 RMB. The first-instance verdict ordered the defendant to immediately stop infringing the specified trademarks, remove promotional images containing identical or similar marks from the named online platforms, cease unfair competition by dropping the "Orange" characters from its enterprise name, and pay 8,000 RMB in damages and costs.
The inn appealed to the Xianyang Intermediate People's Court, asserting it had no malicious intent to exploit the brand, that its marks were clearly distinguishable from the registered trademark, and that with only 20 rooms, it served as a budget local inn where consumers could easily differentiate between the two. It also argued it had not prominently or separately used "Orange" and thus had not diluted the trademark's distinctiveness, claiming its actions fell outside trademark infringement and unfair competition definitions.
The second-instance court compared the "Orange Inn" mark with the plaintiff's "Orange Hotel" trademark, noting both rely on the "Orange" text as the primary distinguishing feature. Given the recognized reputation of the "Orange Hotel" trademark in the hospitality industry, the defendant's use of "Orange" in its signage and promotions could readily cause public confusion, infringing the plaintiff's rights. The court found that registering "Orange," a portion of the plaintiff's prior trademark, as part of its corporate name demonstrated clear intent to leverage the trademark's fame for competitive advantage, which could mislead the public and constituted unfair competition. The court also found the 8,000 RMB compensation amount appropriate.
On September 22, the Xianyang Intermediate People's Court ruled to dismiss the appeal and uphold the original judgment.