Reflections Triggered by the Lawsuit Dispute Between 9588 Travel Network and Ctrip

"This was an expected outcome. Justice may be delayed, but it will not be denied!" When summarizing the long-standing lawsuit with Ctrip to reporters, Xiao Qingping, Chairman of Beijing Zhishangtong Network Technology Co., Ltd. (hereinafter referred to as "Zhishangtong"), expressed such sentiments.

Going back to September 2011, Xiao Qingping suddenly discovered that when searching for "Zhishangtong" on Baidu, the top result on the first page prominently displayed "Zhishangtong—Book flights on Ctrip." Clicking the link led directly to Ctrip’s homepage. He then searched for the business travel service website "9588 Travel Network" (www.9588.com), developed by Zhishangtong Aviation Services."9588" and "9588 Travel Network" also found Ctrip’s infringing ad copy "9588 Travel Network: Just go to Ctrip" appearing in the homepage promotional link position.

After multiple rounds of negotiation and communication failed, Zhishangtong filed a lawsuit against Ctrip. This marked the beginning of the story. What no one could have predicted was the process and the outcome. The arduous journey, prolonged duration, and even the profound impact of the final verdict on the industry far surpassed the mere "win or loss" of the litigation itself...

In fact, similar infringement complaints were not the first of their kind. As early as September 2009, Fuanna entered the Chinese search bar on Google and typed "Fuanna," but the search results showed "Buy Fuanna, go to LOVO." Clicking the link took users to www.lovo.cn, a site that did not sell any Fuanna products, but rather those of Luolai Home Textiles. This internet technology-based infringement, akin to "keyword hijacking," was vividly dubbed "rogue links" by netizens. Accordingly, Fuanna believed that Luolai Home Textiles had committed trademark infringement and unfair competition, took the case to court, and ultimately won—delivering the first wake-up call in the internet space to companies engaging in unfair competition.

However, Fuanna’s victory did not make all companies engaging in unfair competition realize their mistakes. In September 2011, Ctrip carried out the infringement act of hijacking the keywords of 9588 Travel Network. Unlike previous similar infringements that were either dropped or settled out of court, the lawsuit between Ctrip and Zhishangtong went through both the first and second trials, eventually concluding with Ctrip’s defeat and compensation. This process fully demonstrated Ctrip’s "arrogance" as the market leader and Zhishangtong’s "stubbornness" as a market challenger. Initially, Ctrip dismissed the lawsuit from Zhishangtong, explaining to journalists: "Based on our understanding, due to Ctrip’s market position, 'Ctrip' is also often used as a brand keyword by competitors." Ctrip claimed it had "always adhered to corporate ethics, complied with industry rules, and advocated fair and open competition." In response to Zhishangtong’s lawsuit, Ctrip stated: "Regarding this matter, we do not rule out the possibility that certain travel-related companies intentionally created disputes with Ctrip for bundled hype."

It was precisely this attitude that thoroughly enraged Zhishangtong. According to Xiao Qingping: "Ctrip’s unfair practices not only led to a gradual decline in the traffic to 9588/Zhishangtong websites accessed via search engines. The most severe consequence was that it directly caused the 30 million yuan advertising budget spent by Zhishangtong in 2011 to go to waste." The year 2011 was when Zhishangtong was listed on the Shenzhen New Third Board (430093), during a period of high attention from both the consumer and capital markets. Since the main business scopes of Zhishangtong and Ctrip were similar, focusing primarily on high-end corporate travel clients, users seeing the huge billboards invested in by Zhishangtong at airports might end up on Ctrip’s website after searching online.

In response, Xiao Qingping and Zhishangtong made the decision not to settle and to fight the lawsuit to the very end.

Finally, persistence earned respect and victory. The Beijing No. 1 Intermediate People's Court ruled that the defendant, Shanghai Ctrip Commercial Co., Ltd. (hereinafter referred to as Ctrip), had engaged in unfair competition. The court ordered Ctrip to compensate the plaintiff, Zhishangtong Aviation Services (Beijing) Co., Ltd. (hereinafter referred to as Zhishangtong Aviation Services), for economic losses and reasonable expenses totaling 50,000 yuan. This judgment was final, meaning it was a result both parties had to accept.

This also marked the overturning of the internet marketing "hidden rules" where companies with deep pockets could freely purchase competitors’ keywords in search engines. As the first case of an OTA winning a lawsuit, it truly deterred internet infringement behavior within the industry and provided solutions for other aggrieved companies seeking justice. Using this judgment as a practical case, it signified that such unfair competitive behavior "violated the principles of honesty and credit and recognized commercial ethics."

The first "domino" had finally fallen. Shortly after the Beijing No. 1 Intermediate People’s Court ruled in favor of 9588 Travel Network, the Shanghai No. 1 Intermediate People’s Court ruled in favor of Guoan Ticketing in its lawsuit against Ctrip for infringement, ordering Ctrip to cease the infringement of the registered trademark rights of "Guoan," stop its unfair competition against Guoan Ticketing, and compensate for economic losses. Further information revealed that, inspired by such rulings, several other companies involved in Ctrip’s keyword purchases were preparing to launch a new round of lawsuits against Ctrip.

"Unfair competition in the internet industry takes many forms and is becoming increasingly severe. Currently, it is mainly resolved through judicial channels, but the process is cumbersome, time-consuming, and cannot promptly halt unfair competition," analyzed Zhao Zhanling, a special researcher at the Intellectual Property Center of China University of Political Science and Law. The expert’s viewpoint pinpointed the confusion of companies like Zhishangtong who have been infringed upon. China’s current laws and regulations are relatively lenient regarding the scale of unfair competition, while the time and energy costs of safeguarding rights are extremely high.

In contrast, in the more developed internet industry of the United States, laws and regulations concerning unfair competition and infringement on the internet are relatively comprehensive, and penalties are stricter. In 2009, Facebook sued the "Spam King" after being victimized and was ultimately awarded 711 million US dollars in compensation. In 2011, Yahoo also won a similar lawsuit, receiving 610 million US dollars in damages. Facts have proven that high compensation not only provides relief to victims but also serves as a strong deterrent to the industry.

In response to this situation, Guan Xiaofeng, a renowned Chinese expert on anti-unfair competition law, pointed out: Even if offending internet companies lose lawsuits, they often only face fines of a few hundred thousand yuan, which is entirely insufficient as a warning. Therefore, he suggested increasing the severity of penalties imposed on non-compliant internet companies, ensuring these companies feel the pain, and making infringers realize that the cost of infringement outweighs any gains.

Lü Tingdong, the corporate lawyer for 9588 Travel Network, spoke about the case: "The process of safeguarding our rights was extremely difficult, taking nearly two years. We did not receive support from the court in the first trial, but we firmly believed the other party’s actions constituted infringement. Through an appeal, we eventually obtained a fair judgment. The legal significance of this victory is immense, especially as it provides direct legal grounds for other companies in the industry to seek justice. To some extent, it also shows that China’s laws have once again escalated efforts to combat unfair corporate competition, bringing internet legal rights under legal protection. I believe China’s legislation related to curbing unfair competition and profit-seeking behavior will gradually become more complete, providing a solid legal basis for regulating corporate market competition and ensuring market order. On the other hand, I also hope that similar cases in the future can receive greater compensation. Otherwise, overly light penalties far below the profits gained from infringement still make it a worthwhile marketing gamble for offenders."

In the field of the internet, the achievements of Chinese companies over the past decade cannot be ignored. But for companies that break the law or act dishonestly, regardless of their industry, markets, departments, and users at all levels should adopt a "zero-tolerance" attitude. Only in this way can a more commendable Chinese internet culture gradually take shape, allowing the internet economy to thrive and remain vibrant.