Background

The Zhuang Chenchao registered qunar.com, on May 9, 2005, while Qunar Information Technology was established on March 17, 2006. Zhuang then transferred qunar.com ownership to the company and qunar (meaning “where to travel” in Chinese), qunar wang (meaning qunar.com in Chinese) and the domain name qunar.com grew in recognition over the years. The precursor of Guangzhou Quna was founded on Dec 10, 2003 and took the domain name quna.com on May 26, 2009 (in Chinese, quna is very similar to qunar in both sound and meaning). Its business is also similar to that of Qunar. Quna.com was registered on June 6, 2003 and was transferred to Quna in May 2009. Quna then registered 123quna.com and used both quna and qunar (in Chinese) to promote quna.com’s business.

Qunar then took the case to court, complaining that Quna’s actions constituted unfair competition and requested that it cease its unfair competition and pay 3 million yuan in compensation. The Guangzhou intermediate people's court held that Quna’s action did in fact infringe on Qunar’s name and constituted unfair competition and that its use of such domain name as the quna.com, 123quna.com names damaged Qunar’s interests. The court ruled that Quna should stop the use of these names, logos and domains and transfer them to Qunar by a certain date. It also said that Quna should compensate Qunar by paying 350,000 yuan for its losses.

Quna disagreed with the ruling and appealed the higher court. In the second trial, the Guangdong superior people’s court held that Quna’s use of the Chinese term qunar in its business promotion was in fact unfair practice, but that it had a right to the quna.com name and that Quna had a justifiable reason for using the domain and that this did not constitute unfair competition, in view of the supreme people’s court’s pronouncement on the law in relation to computer network domain-rated civil disputes. Quna’s 123quna.com should also be allowed.

The court ruled that both parties had a right to their legitimate domains and needed to tolerate, respect and coexist with each other. It said that one party cannot deprive the other of space just because of an increase in its fame, but neither could one make unwarranted use of the other’s rising popularity for its own unjustified interest. Therefore, while Quna could continue to use quna.com and the other related domains, it was obliged to make a clear distinction between logos and websites, so that consumers could clearly tell the difference between them.

The court upheld the first court’s ruling on Quna that it stop the use of similar company names and logos, but dismissed the part that Quna stop using quna.com and other similar domains and it need not transfer those domains to Qunar. The compensation is also lowered to 250,000 yuan in the second trial.

Significance

The case makes a distinction between domain and trademark similarities, and dealing with an interests and rights dispute. Quna used the quna.com site that was previously registered, and Qunar’s website was a well-known brand registered as qunar.com. The two domains differed by the use of the letter ‘r’, but they were similar. The court decided that they could coexist for the following reasons: First, a ban on domains that are a little bit similar would hurt the economy; and two, domains are recognized by computer systems that can easily tell the difference between similar ones, therefore there should be no confusion. The immense difference between electronic technology and individual experience was the main reason behind the judgment of similar domains and trademarks.