Law

Guarding the cornerstone of international business integrity - the battle for the UCM brand among high-end medical equipment enterprises in China and Australia has come to an end

2026-02-02   

From close business partners to competitors in court, a cross Pacific dispute involving unfair competition in the field of life and health has recently come to an end at the Suzhou Intermediate People's Court in Jiangsu Province after several rounds of confrontation. The UCM brand dispute between high-end medical equipment companies in China and Australia is not an ordinary commercial friction, but a dispute caused by one party "starting anew" and fully imitating the other party's commercial logo in the context of long-term cooperation. Based on the special background of long-term cooperation between the two parties, the court fully considers the subjective intention and behavioral purpose of the accused infringer, and makes a determination on whether the commercial logo involved in the case "has a certain influence" and whether the unfair competition behavior is established. This not only clarifies the boundary of competitive behavior for market entities with special connections, but also clearly indicates that on the international business stage, integrity and contractual spirit are insurmountable cornerstones. Chinese judiciary always upholds this basic value and concept with equal and powerful protection. After the judgment came into effect, institutions such as the China Australia Chamber of Commerce and the Australian Trade and Investment Commission highly praised the values conveyed in this case, including honest cooperation, contractual spirit, equal protection, and reverence for the field of life and health. This has strengthened the confidence of Australian rights holders in investing in China. Uscom Limited, a former shareholder turned competitor, is an Australian cardiovascular medical equipment company founded in 1999. It was listed on the Australian Stock Exchange in December 2003 under the stock code "UCM". The company's core product, the USCOM cardiac output measurement instrument, can measure cardiac blood flow in a non-invasive manner and evaluate key hemodynamic parameters such as heart rate and cardiac output. Since its entry into the Chinese market in 2004, Yousikang's products have been widely used in various clinical scenarios and have a certain market influence and academic reputation in related professional fields. Since July 2022, Unicon has found that Suzhou Dasheng (a pseudonym) has marked the "UCM" logo on its WeChat official account, official website, medical device registration certificate and other places, and its product measurement interface also uses a waveform color combination similar to Unicon's product interface. After unsuccessful negotiations, Unicon filed a lawsuit against Suzhou Dasheng Company and its former domestic distributors, Shanghai Shengyi and Shanghai Sheng'er (both using pseudonyms), accusing Shanghai Shengyi and Shanghai Sheng'er of using product information obtained during their distribution cooperation to engage in unfair competition such as commercial counterfeiting with Suzhou Dasheng Company, seriously damaging Unicon's legitimate rights and interests. The lawsuit demands that the three defendant companies immediately cease their unfair competition practices, including but not limited to using the "UCM" logo in product models, stopping plagiarizing the waveform color combination style of the "USCOM cardiac output measuring instrument" measurement interface, and jointly compensating for economic losses and protecting their rights. The total expenditure is 1 million yuan. After investigation, the legal representative and actual controller of the three defendant companies are all Mr. Sun. And Sun has a deep connection with the plaintiff Yousikang Company: as early as 2016, Sun became one of the five major shareholders of Yousikang Company. From 2014 to 2017, Sun successively established Shanghai Shengyi and Shanghai Sheng'er companies, which served as authorized distributors of Unicon in the Chinese market, selling products such as "USCOM cardiac output measurement instrument". Both parties explicitly state in the distribution agreement that the intellectual property rights related to USCOM, such as trademarks, copyrights, trade secrets, etc., belong to Yousikang Company. Distributors are not allowed to tamper with product information without authorization, nor engage in infringement, counterfeiting, or other activities. By 2022, the long-standing distribution relationship between the two parties will come to an end, and the cardiac output measuring instruments produced by Sun's newly established Suzhou Dasheng Company will be gradually sold to major hospitals in China. The second instance court found that the claim of "having a certain impact" on the abbreviation of the enterprise claimed by Yousikang Company constituted unfair competition. The first instance court held that the "UCM" logo of Yousikang Company was only used as its company stock code, and Yousikang Company failed to prove that the logo had constituted a "having a certain impact" on the enterprise name abbreviation in the relevant Chinese market. Therefore, it did not support this claim. Regarding the claim of "having a certain impact" on product packaging decoration by Yousikang Company, the waveform color combination involved is the Doppler flow waveform that appears on the device screen after the device is turned on. This graphic does not belong to the product packaging referred to in the "Several Provisions on Prohibiting Unfair Competition in the Name, Packaging, and Decoration of Famous Products", nor does it belong to the additional decoration on the product or packaging, which cannot distinguish the source of the product. Therefore, Yousikang Company's claim is not supported. The first instance judgment rejected all claims of Yousikang Company. Yousikang Company disagrees and files an appeal. The Intermediate People's Court of Suzhou City, Jiangsu Province, held in the second instance that regarding the "UCM" logo, although it originated from the stock code of Yousikang Company, it has evolved into an identification symbol referring to the company through long-term and continuous use and reporting in annual reports, official websites, promotional materials, and third-party media in actual commercial activities. In the field of hemodynamic monitoring, the relevant public can establish a stable connection between "UCM" and Unicon, and this label has the "certain impact" required by the Anti Unfair Competition Law. Suzhou Dasheng Company prominently uses the "UCM" logo on similar products, which can easily lead to the public mistakenly believing that it has a specific connection with Yousikang Company, constituting unfair competition. The combination of blue waveform and red tracing on the product measurement interface, although not fully in line with the traditional characteristics of product decoration, has gained recognition through long-term use and promotion by Unicon Company. Considering the special relationship between the two parties, Suzhou Dasheng Company imitated this behavior, subjectively with the intention of illegally obtaining other people's commercial achievements, objectively exacerbating the possibility of confusion. This behavior belongs to the "other confusing behaviors that can cause people to mistake them for other people's goods or have a specific connection with others" regulated by the Anti Unfair Competition Law, and also constitutes unfair competition. The second instance judgment states that Suzhou Dasheng Company should immediately cease the unfair competition behavior involved in the case and compensate Yousikang Company for its economic losses. The compensation amount is determined to be 800000 yuan based on factors such as the subjective fault of Suzhou Dasheng Company's infringement, the scale and circumstances of the infringement, and reasonable costs for rights protection. The purpose of the Anti Unfair Competition Law is to regulate unfair competition behavior and maintain the market competition order of honest operation by clarifying the boundary of competition behavior of special related parties through judicial analysis. This case is different from occasional disputes between general market entities, but rather disputes arising between special affiliated enterprises. Based on the special background of long-term cooperation between the two parties, the determination of whether the commercial logo "has a certain impact" and unfair competition behavior in this case should be comprehensively considered in the context of the historical relationship between the two parties, fully considering the subjective intention and behavioral purpose of the accused infringer, and based on the judgment criteria of the legitimacy of the behavior, making a corresponding judgment on this case. The influence of enterprise identification should not be denied by generalized indicators such as asset size. Firstly, in terms of significant identification of identification, the protection of enterprise name abbreviations by the Anti Unfair Competition Law aims to maintain their function of identifying market entities formed through actual use. The English name of Uscom Limited is "Uscom Limited", and it advocates that "UCM" is the abbreviation of its English business name. Based on the evidence in the case, "UCM" was originally used as the stock code for Unicon on the Australian Stock Exchange, with the ability to identify specific entities. Since its listing in 2003, the company has continued to mark "UCM" and other words in its official annual report, official website, WeChat official account, promotional display board and other prominent positions. Meanwhile, multiple third-party media outlets have also used the company name "Uscom" alongside "UCM" in various forms in related reports. From this, it can be seen that the "UCM" logo has evolved into an external identification symbol referring to Yousikang Company in actual business activities, with the function of identifying specific market entities, which meets the protection requirements of the Anti Unfair Competition Law for enterprise name abbreviations. Secondly, in terms of market awareness, the requirement of "having a certain impact" under the Anti Unfair Competition Law should be judged based on the level of awareness of the relevant public in a specific field. The product involved in this case is a cardiac output measuring instrument, which belongs to professional medical equipment. The relevant public mainly includes professionals from medical institutions and industry practitioners. USCOM products from Unicon entered the Chinese market in 2004 and have been continuously sold ever since. With its non-invasive Doppler ultrasound technology for measuring cardiac output, it holds a high market share in the field of non-invasive hemodynamic products in China. Its clinical application value has also been fully reflected in the field of critical care medicine, and related products and their application principles and methods have been included in multiple professional books, indicating that it has accumulated considerable academic reputation and industry recognition. In this context, the "UCM" logo, which is closely related to Unicon and its products, has established a stable corresponding relationship among the relevant public through long-term and extensive commercial use and industry dissemination, and has gained the necessary market awareness. Suzhou Dasheng Company only denies the market influence of the logo based on general indicators such as asset size and profitability of Yousikang Company, lacking legal and factual basis, and the court does not adopt it. To sum up, when Suzhou Dasheng Company and Yousikang Company's products are competitive products of the same kind, its prominent use of the "UCM" logo identical with Yousikang Company's enterprise name abbreviation in product model, promotional color pages, official website, WeChat official account and exhibition publicity is enough to mislead people into thinking that it has a specific relationship with Yousikang Company, which constitutes unfair competition as stipulated in Item 2, Paragraph 1, Article 7 of the Anti unfair Competition Law. Although the combination of waveform colors is not a traditional product decoration, it is still protected by law. The Suzhou Intermediate People's Court made a specific analysis in the judgment on whether the waveform color combination of blue waveform and red depiction involved in the case should be protected by the Anti Unfair Competition Law. Firstly, regarding whether the color combination of the waveform constitutes product decoration under the Anti Unfair Competition Law. The court believes that the color combination of the waveform involved is reflected in the device operation interface, which belongs to the visual effect presented during the operation of the device. The carrier and usage scenario attached to it are significantly different from the traditional meaning of product decoration. In addition, considering that waveform diagrams are essentially intuitive representations of Doppler blood flow signals, their functional features are more prominent. Therefore, it is difficult to directly include the color combination of the waveform involved in the protection of product decoration under the Anti Unfair Competition Law. However, not being protected by product decoration does not mean that the accused infringing mark is not subject to legal regulation. When the operator engages in other confusing behaviors that may lead people to mistakenly believe that they are other people's goods or have specific connections with others, they can be included in the regulation of the Anti Unfair Competition Law. This case is based on the following two reasons, and it is believed that the use of the involved waveform color combination by Suzhou Dasheng Company in the product measurement interface should be prohibited: on the one hand, the combination design of blue waveform base and red tracing adopted by Yousikang Company has certain uniqueness in color matching and composition layout, and through Yousikang Company's continuous clinical application, academic promotion, and exhibition publicity, the relevant public can to some extent match the waveform color combination with Yousikang Company's USC

Edit:Chenjie Responsible editor:Jiajia

Source:https://www.rmfyb.com/

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