“Dragon Nest” Trademark Infringement Lawsuit Goes to Trial

Orange County – Yesterday, in a Shanghai, China courtroom, Shanda Interactive Entertainment went to trial in a trademark infringement lawsuit against Shenzhen-based technology company that alleged Shanda infringed its trademark by using a similar name in a popular online game.

According to court documents, Shenzhen-based Teelio Technology Co Ltd, initiated the legal battle last year, alleging that Shanda’s Chinese name for “Dragon Nest,” “Long Zhi Gu,” infringed “Long Gu,” a registered trademark of Teelio. Reportedly, Teelio was seeking 56 million yuan (US$8.79 million) to sell the trademark, or an annual fee of 12 million yuan in licensing fees from Shanda for it to continue using the trademark.

Teelio stated to the court that the two names had no difference in their Chinese meanings, as “Zhi” was equal to “zero” in English. In the Chinese language, long translates to dragon, and gu translates to valley, a place where the dragon creature lives in the game.

Shanghai-based Shanda argued back that the two trademarks were registered under different categories, with “Long Gu” being a commodity trademark and “Long Zhi Gu” being a service trademark, and that therefore, no infringement existed. In response, Teelio offered evidence to the judge that Shanda had released a console game version of “Dragon Nest” as a free download available on its website in order to attract online game players. This, according to Teelio, was not in the scope of the service trademark.

An attorney for Teelio claimed that the service trademark applies to computer programs that can only be run on the Internet, and not console games or programs.

Teelio’s lawyer stated in court, “Apparently, Shanda has violated the regulation as the console game can be played even if players do not have access to the Internet.”

Shanda defended its console-game version by countering that “Dragon Nest” was free and simply served as a guide to assist new players in familiarizing themselves with the online version, similar to a trailer for moviegoers.

In addition to trying to sell the trademark or collect licensing fees, Teelio demanded that Shanda immediately stop using the trademark and destroy all products marked with “Long Zhi Gu.”