Weekly China Brand Protection News

June 20, 2024

1. RMB 640 million Compensation Sets Record! Final Verdict in Favor of Geely’s Against WM Motor for Trade Secret Infringement

The appellants, Zhejiang Geely Holding Group Co., Ltd. and Zhejiang Geely Automobile Research Institute Co., Ltd. (“Geely”), along with the appellant, WM Motor Manufacturing Wenzhou Co., Ltd. (“WM Wenzhou”), and the appellees, WM Motor Technology Group Co., Ltd. (“WM Group”), WM Smart Mobility Technology (Shanghai) Co., Ltd. (“WM Smart Mobility”), and WM New Energy Vehicle Sales (Shanghai) Co., Ltd. (“WM”), were involved in a trade secret infringement dispute. Dissatisfied with the civil judgment made by the Shanghai High Court (“First Instance Court”) on September 5, 2022 (“First Instance Judgment)”, they appealed to the Supreme People’s Court (“SPC”).

On April 25, the SPC rendered a final verdict that overturned the First Instance Judgment, ordering WM to immediately cease disclosing, using, or allowing others to use Geely’s new energy vehicle chassis application technology and the related twelve sets of automotive chassis component drawings and digital model trade secrets. WM was also ordered to compensate Geely for economic losses amounting to RMB 6.4 billion (USD 896 million) and reasonable expenses of RMB 5 million (USD 700,000) incurred to prevent the infringement.

Since 2016, nearly 40 senior executives and technical personnel from Geely’s affiliated automobile companies have resigned and subsequently joined WM and its associated companies. Among them, 30 people left in 2016 and immediately joined WM. In 2018, Geely discovered that WM, with the aforementioned former employees as inventors or co-inventors, applied for 12 utility model patents involving the new energy vehicle chassis application technology and the related twelve sets of automotive chassis component drawings and digital model technology secrets (“Disputed Trade Secrets”), which they had accessed and mastered at Geely. Moreover, WM’s and its affiliated companies, without legitimate technological sources, quickly manufactured and launched the WM EX series electric vehicles, suspected of infringing Geely’s involved technical secrets. Geely filed a lawsuit with the Shanghai High Court, requesting that WM be ordered to stop infringing the involved trade secrets and to compensate for economic losses and reasonable expenses for rights protection, totaling RMB 2.1 billion (USD 294 million).

The SPC’s second instance judgment found that the trade secrets involved in this case possess substantial commercial value and that Geely had taken reasonable measures to maintain the confidentiality of these secrets, their acts warrant legal protection.

Regarding whether WM Motor infringed on Geely’s trade secrets, the second instance judgement found, based on the available evidence, that WM not only obtained all of Geely’s involved trade secrets through improper means but also illegally disclosed some of these secrets by applying for patents. Additionally, WM used all of the trade secrets to manufacture the chassis and chassis components for the WM EX series electric vehicles (including EX5, EX6, and E5). WM’s acts constitute an infringement on Geely’s trade secrets.

Regarding the determination of damages, the SPC stated:

Before the revised Anti-Unfair Competition Law came into effect in April 2019, punitive damages could not be applied, only compensatory damages. For the period prior to the revised 2019 Anti-Unfair Competition Law, the infringing profit, which is the compensatory damage amount, was calculated to be RMB 24.9 million (average price of EX series RMB 175,200/vehicle × sales from 2018 to April 2019 of 8,873 vehicles × profit margin of 20% × contribution rate of Geely’s involved trade secrets to the vehicle sales profit of 8%).

For the infringing profit from May 2019 onward (which is both the compensatory damage amount and the base for calculating punitive damages), the amount was calculated to be RMB 204 million (average price of EX series RMB 175,200/vehicle × sales from May 2019 to the first quarter of 2022 of 72,860 vehicles × profit margin of 20% × contribution rate of Geely’s involved trade secrets to the vehicle sales profit of 8%). Double the said amount equal to punitive damages (RMB 204 million × 2 = RMB 408 million), and adding the compensatory damages for the same period, the total is RMB 612 million (RMB 408 million + RMB 204 million ).

The combined total of these amounts results in WM Motor being ordered to compensate Geely for economic losses of RMB 604 million.

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Weekly China Brand Protection News

June 13, 2024

1. RMB 8 million in damages against infringers of the “Martian in Chinese” mark that is recognized as well-known

Recently, the Guangdong High Court made a second-instance judgment on the trademark infringement and unfair competition dispute case between Martian Kitchenware Co., Ltd. (“Martian”) and Zhongshan Jiamei Electric Technology Co., Ltd. (“Jiamei”), an individual Zhou, Guangzhou Shuaifeng Kitchen Appliance Co., Ltd. (“Shuaifeng”), Shenzhen Leman Kitchen Appliance Co., Ltd. (“Shenzhen Huoxingren”), and Beijing Siyuan Bio Technology Development Co., Ltd. (“Siyuan”). The court found that the defendants’ acts constitute trademark infringement and were ordered to immediately stop infringing on Martian’s Cited Marks. Zhou, Shuaifeng, Shenzhen Huoxingren, and Siyuan were ordered to compensate Martian a total of RMB 8 million (USD1.10 million), and Jiamei shall bear joint and several liability for compensation within RMB 5 million (USD689,000).

Cited Marks

Disputed Marks

The court found that first, since 2015, Martian’s “Martian in Chinese” mark has been recognized as a famous brand product in Zhejiang Province and a famous trademark in Zhejiang Province. From revenue to profits, advertising investment, honorary awards, various media reports, etc., it reflects the popularity and influence of the “Martian in Chinese” mark on integrated stove among consumers, which is enough to prove that when the “Martian Pioneer in Chinese” mark was filed, the “Martian in Chinese” mark had reached a well-known status in kitchen appliances, especially integrated stoves.

Second, the defendants argued that the “Martian Pioneer in Chinese” was a registered trademark and did not constitute infringement. The court held that, based on good faith and business morals, even if the defendants use a registered mark, considering well-known mark status provide better, stronger, and wider protection scope, the court can determine whether to recognize the Cited mark as well-known based on the circumstance of this case. The court found that it is necessary to recognize the Cited Mark as well-known mark in order to stop the defendants’ infringement activities.

Third, the “Martian Pioneer in Chinese” mark and the distinctive part of other “Martian Pioneer in Chinese” marks constitute a copy of the well-known trademark “Martian in Chinese.” Moreover, when comparing the disputed mark with the Martian’s Cited Marks, it contains an “M” figure with a circular background that is similar to Martian’s trademark and completely contains Martian’s trademark. The use of the disputed marks constitutes trademark infringement.

2. Unauthorized modified Casio watch constitutes trademark infringement

Recently, the Liaoning High Court concluded a second-instance trademark infringement and unfair competition dispute between CASIO Computer Co., Ltd. (“Casio”) and an individual Chen and an individual Han. The court found that Chen and Han infringed Casio’s trademark rights and ordered them to immediately stop their infringement of Casio’s Cited Marks and compensate or economic losses and reasonable expenses of RMB 600,000 (USD82,800).

Cited Marks

The court found that: First, Chen and Han sold non-original watch cases and watch straps (including watch buckles), as well as finished watches modified with non-original watch cases and watch straps (including watch buckles). However, when it promoted, offered to sell, and sold the allegedly infringing goods on platforms such as WeChat Moments, Bilibili, Little Red Book, Dewu, Xianyu, and online stores, it did not clearly inform the relevant consumers of the fact that the accessories used for modification were not original nor authentic.

Second, Chen and Han directly stated in some product names such as “Casio G-SHOCK Black Gold GA110/700/400/5600/GMA Ice Tough Glacier Transparent Case Strap,” which did not contain the word “modification.” In the “Purchase Instructions” of some product sales pages, it clearly stated that “Our store is all original and authentic,” and pasted a label with the words “Steady G-SHOCK” on the back of the finished watches sold. Even some of the accessories sold (including the modified finished watch accessories) directly carried the trademark in question, misleading the relevant public regarding the source of the products. Chen and Han’s acts constitute trademark infringement.

Third, Chen and Han promoted, offered to sell, and sold Casio high-end products that are modified from low-end Casio models, or modified Casio product styles into third-party product styles, or attached third-party logos, which damaged the goodwill of Casio’s cited marks. These acts constituted trademark infringement.

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Weekly China Brand Protection News

June 5, 2024

1. Selling goods during webcasting infringed the “BELLE in Chinese” trademark. The court applied punitive damages and ordered RMB 22 million in compensation

Fuyang Co., Ltd. (“Fuyang”) is the owner of the “BELLE” mark with reg. no. 1815147, the “BELLE in Chinese” mark with reg. no. 3086374, and the “BELLE” mark with reg. no. 37518850 (collectively as “Cited Marks”). The Cited Marks are all approved for “shoes” related goods in Class 25.  Xinbaili Shoes (Shenzhen) Co., Ltd. (“Xinbaili”) and Lirong Shoes (Shenzhen) Co., Ltd. (“Lirong”) are legally authorized by Fuyang to file a lawsuit in their own name for infringement of the Cited Marks and unfair competition, and to pursue relevant infringement liabilities.

Xinbaili and Lirong found through investigation that in February 2021, a Wenzhou e-commerce company (“Wenzhou Company”) used the “BELLE” and “BELLE in Chinese” marks on their Douyin account named “Australian Belle Official Flagship Store” without authorization. In July 2021, Liu obtained the “” mark with reg. no. 5925271 that was approved for use on goods such as “shoes” in Class 25. From April 15, 2021 to May 26, 2022, Liu registered several individual business names, including “Wezhou City Lucheng District Huibu Shoes” and used them to register and operate multiple accounts on Douyin, including “Australian Belle Official Flagship Store” and “Abao’s Strictly Selected Women’s Shoes.” Liu sold shoes bearing “” and “AOZHOUBELLE” on these accounts.  Xinbaili and Lirong sued Wenzhou Company and Liu to the Wenzhou Intermediate Court based on trademark infringement and unfair competition with a request to order the Wenzhou Company, Liu to immediately stop infringement and eliminate any impacts, Liu to compensate their loss of RMB 44.8 million (USD 6.19 million), punitive damages of RMB 89.6 million (USD 12.37 million), and reasonable expenses of RMB 189,960 (USD 26,233).

The Wenzhou Intermediate Court held that: Wenzhou Company and Liu used the logo similar to the Cited Marks without authorization, which constituted trademark infringement. In view of the fact that the alleged infringement constituted trademark infringement, it is no longer necessary to repeat the analysis on whether the same behavior constituted unfair competition. Regarding Liu’s claim that he was the owner of the “” mark and that it was legitimate to use the alleged infringing logo because the said mark was a combination of “Australia Belle in Chinese” and “AOZHOUBAILI”. However, “AOZHOUBAILI” was replaced with “AOZHOUBELLE” in actual use, it showed that Liu had a strong subjective intention to infringe, which was difficult to be justified. Therefore, the court did not accept this defense. Because the online store in question had stopped selling the alleged infringing goods, the plaintiff’s request to stop the infringement was not supported. The request for Wenzhou Company and Liu to eliminate the impact and Liu to compensate for the loss in the form of one-time punitive damages was supported. In summary, the Wenzhou Intermediate Court ruled that Liu should compensate for economic losses (including reasonable expenses) of RMB 22.1 million, the Wenzhou Company and Liu should publish a statement to eliminate any impact.

Liu appealed to the Zhejiang High Court, but the appeal was dismissed and the lower court’s judgement was affirmed.

2. Bad faith filing of “Bently Lu Zhi in Chinese” should not be approved for registration

Plaintiff Bin Li He Zong (Xiamen) Supply Chain Management Co., Ltd. (“Bin Li”) appealed the CNIPA’s decision to refuse the registration of the “Bently Lu Zhi in Chinese” mark with No. 41562537 designated in Class 33 for wine related goods to the Beijing IP Court. The Beijing IP Court dismissed Bin Li’s appeal.

The issue was whether the application for registration of the disputed trademark violated Article 44(1) of the Trademark Law (trademark obtained through deceit or other unfair means). The Court held that the plaintiff had applied for the registration of 51 trademarks, including several trademarks containing the words “Bentley” and “Bentley in Chinese”, and including marks containing the wing design. “Bentley”, “Bentley in Chinese” and the wing design are marks that enjoy certain degree of fame owned by Bentley Motors Ltd., the third party in the automobile goods. The plaintiff applied for the registration of a number of trademarks that were highly similar to the third party’s Chinese, English and graphic marks, which was obviously in bad faith. The plaintiff squatted the third party’s prior trademark applications with a large number of applications, which has seriously disrupted the order of trademark registration management, damaged the public interest, and these marks should not be approved for registration. Although the disputed mark has not yet been approved for registration, the CNIPA correctly refused the registration by applying Article 44(1).

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Weekly China Trademark News Updates

March 1, 2024

1. The People’s Court case database is open to the public

On February 27, 2024, the Supreme People’s Court held a press conference to announce that the People’s Court case database is officially launched and open to the public (http://rmfyalk.court.gov.cn).

The People’s Court case database contains authoritative cases, including guiding cases and reference cases, that have been reviewed by the Supreme People’s Court and deemed to have reference and demonstrative value for similar cases. Currently, there are 3,711 cases in the database, including 1,453 criminal cases (39.15%), 1,643 civil cases (44.27%), 405 administrative cases (10.91%), 23 state compensation cases (0.62%), 187 execution cases (5.04%).

The Supreme People’s Court requires that when hearing a case, judges must search the case database and make decisions with reference to similar cases in the database. This is of great significance in promoting the unification of adjudication rules and standards and avoiding “different adjudication of the same facts.”

2. Repeatedly bad faith registering marks similar to prior marks and using them beyond the scope of registration was found to constitute unfair competition and trademark infringement

Santak Electronics (Shenzhen) Co., Ltd. (“Santak”) is the registrant of the “SANTAK” mark with reg. no. 619938 and the “San Te in Chinese” mark with reg. no. 512383 in Class 9 for “uninterruptible power supplies; precision power supplies; regulated power supplies” and other goods.

Guangdong Taiqifeng Electronics Co., Ltd. (“Taiqifeng”) operates www.vsasvntek.net, techfine.net. In these websites’ company profile, product inspection reports uploaded on the website, downloaded color pages and other locations used the “VSASVNTEK” mark, and the company’s brochure also used words such as “Produced by American International SUNTEK Power Supply Company” and “American International USASVNTEK Power Supply Co., Ltd.” At the same time, in the “Foshan Nanshan Taiqifeng Electronics Co., Ltd.” store on the Marco Polo website, the words “San Te in Chinese” and “American San Te in Chinese” were used in the company profile and product introduction. In the WeChat public account ” Taiqifeng Electronics” operated by Taiqifeng, the “VSASVNTEK” mark was used on the promotional image. In the manufacture factories of Taiqifeng, there were also many packaging boxes with the “VSASVNTEK” trademark stored, and its products labeled with the “VSASVNTEK” mark are also sold on the market. The UPS power supply products sold by Chengdu Aipeisi Electronics Co., Ltd. (“Aipeisi”) through its website were marked with the “VSASVNTEK” mark on the packaging and physical objects. In addition, Zhou is the operator of the Kemei Computer Accessories Business Department in Chancheng District, Foshan City. Zhou registered the “VSASVNTEK” mark with reg. no. 8059881 in 2010 for “inverters, batteries,” etc., and authorized Taiqifeng to use. Santak filed an application for trademark cancellation and invalidation against this mark. After trial, the mark was declared invalid in 2019. In 2018, Zhou applied again to register the “VSASVNTEK” mark with. reg. no. 2250837 for “inverters, batteries,” etc. Later, this later filed trademark was declared invalid through an invalidation action.

After trial, the People’s Court found that the accused infringing marks “VSASVNTEK” and “USASUNTEK” and Santak’s “SANTAK” were both composed of English letters, and the main part of the accused infringing mark “SVNTEK” and “SUNTEK” were similar to Santak’s “SANTAK” in visual effects, fonts, etc. Since Santak’s “SANTAK” mark has a high reputation on uninterruptible power supply products, using “VSASVNTEK” and “USASUNTEK” on uninterruptible power supplies will easily confuse the relevant public. Therefore, Taiqifeng’s and Aipeisi’s production and selling of the accused infringing product infringed on Santak’s trademark right.

Zhou registered a trademark on identical or similar goods with Santak’s registered trademark and licensed that trademark to other entities such as Taiqifeng for use on uninterruptible power supplies, batteries and other products.  There is a competing relationship between Zhou and Santak. In this case, Zhou successively registered several trademarks that were similar to Santak’s trademarks. Zhou’s trademarks were declared invalid by the CNIPA, and the CNIPA had determined that Zhou knew Santak’s registered trademarks, and his registration was “taking advantage of others, and his action has gone beyond normal production and operation needs, with obvious intentions to copy, plagiarize and imitate other people’s prior trademarks.” After long-term operation and extensive publicity, Santak and its registered trademarks gained a high reputation. As an operator of similar products in the same region as Santak, Zhou should be aware of this and reasonably avoid it. However, Zhou has repeatedly registered marks that were similar to Santak’s registered trademark on similar goods and failed to provide sufficient evidence to prove source of creation to design the trademark. To sum up, Zhou’s accused behavior violated the principle of good faith and generally accepted business ethics and was unfair. At the same time, Zhou’s behavior exceeded the needs of normal production and operation, causing Santak to file trademark oppositions, invalidations, administrative lawsuits, and this civil lawsuit many times to safeguard its rights and interests, which to a certain extent interfered with Santak’s normal production and operation, and caused actual damage to Santak. Therefore, Zhou’s behavior constituted unfair competition.

As for the legal source defense of Aipeisi, the court found that the trademark involved in this case was relatively well-known. As a market operator “specialized in UPS uninterruptible power supplies,” Aipeisi had to decide whether the goods it sold infringed on a registered trademark. Aipeisi failed to fulfill its reasonable duty of review, and there was some subjective fault. Therefore, Aipeisi’s defense was dismissed.

In the end, the court decided that Taiqifeng should compensate Santak for economic losses and reasonable expenses for RMB 5 million (USD694,753). Zhou was jointly and severally liable for RMB 1 million (USD138,950). Aipeisi should compensate RMB 1.005 million (USD139,645).

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Weekly China Trademark News Updates

February 22, 2024

1. Schneider Electric sued Schneider Elevator and won RMB 40 million in compensation

On February 7, 2024, the Jiangsu High Court issued a second-instance judgment in the case of Schneider Electric v. Schneider Elevator, upholding the first-instance judgment of the Suzhou Intermediate Court that found Schneider Elevator infringed Schneider Electric’s trademark and unfairly competed and awarded compensation of RMB 40 million (USD5.5 million).

The Suzhou Intermediate Court found that the “” and “Schneider in Chinese” trademarks registered by Schneider Electric for use on Class 9 circuit breakers, switches, contactors and other commodities constituted well-known marks. Schneider Elevator prominently used the “Schneider in Chinese” and “SCHNEiDER” logos constituted trademark infringement. Schneider Elevator used “Schneider in Chinese” in its corporate name and used “www.schneider-elevator.cn” and “www.schneider-elevator.com” domain names constituted unfair competition. Based on the operating income of Schneider Elevator, the profit margin of the elevator industry, taking into account the brand contribution, and applying punitive damages based on Schneider Elevator’s bad faith in taking advantage of Schneider Electric, the court decided that the amount of compensation that Schneider Elevator should pay was RMB 40 million.

Both parties appealed to the Jiangsu High Court.

The Jiangsu High Court found that considering the market share of Schneider Electric’s products, relevant publicity reports, companies established in China with the brand name “Schneider in Chinese,” operating income and tax payments, industry rankings, trademark protection records, etc., there were sound factual and legal basis in recognizing the “” and “Schneider in Chinese” marks as well-known marks.

Before the establishment of Schneider Elevator in 2010, Schneider Electric had invested in and established a number of companies with the name “Schneider in Chinese” across China. The audit reports, tax-related certificates, invoices and other evidence submitted by Schneider Electric can prove its large sales scale from its business and the high operating income. And the continuous and large-scale publicity of the company in newspapers and magazines were enough to show that its corporate name “Schneider in Chinese” has a high reputation. Although Schneider Electric does not directly produce elevator products, it produces components for elevator products which are all electromechanical products. The first instance judgment correctly found that Schneider Electric had a certain relationship and market competition with Schneider Elevator. Schneider Elevator should have known about the popularity and influence of Schneider Electric’s corporate name “Schneider in Chinese,” but instead of taking any steps to avoid the word, Schneider Elevator used “Schneider in Chinese” as its corporate name without authorization. Its subjectivity cannot be described as good faith, and the corresponding behavior constituted unfair competition.

Regarding the amount of compensation, Schneider Electric, when filing the lawsuit, clearly requested that the amount of compensation be determined based on the benefits obtained by the infringement, and it did not make a request for punitive damages before the conclusion of the debate before the first-instance court. Therefore, the first-instance court’s application of punitive damages was incorrect. However, given Schneider Elevator’s main business income, elevator industry gross profit margin, profit margin and other evidence, it can be proved that Schneider Elevator’s infringement profits exceed the maximum statutory compensation of RMB5 million. If statutory compensation is simply used to determine the amount of compensation in this case, it will undoubtedly be too low and the right holder will not be able to obtain sufficient compensation. This will not only be extremely unfair to the right holder, but will also objectively indulge the infringement. Therefore, the court found that the discretionary compensation method could be used to determine the amount of compensation in this case. Therefore, after comprehensively considering factors such as the popularity and market value of the rights and trademarks involved, the subjective bad faith of Schneider Elevator, the time and scale of the infringement, and brand contribution, the first instance judgment’s determination of RMB40 million in compensation not was correct.

2. Shenzhen Intermediate Court determined that sales of goods after scratching the codes did not constitute unfair competition

Opple, a well-known lighting manufacturer, purchased several products from Dingfeng through an agent. It was found that the barcodes on the outer packaging boxes of the products had been torn off, but the barcodes on the inner packaging boxes were not. The product packaging used “OPPLE, Opple Lighting in Chinese, OPPLE Opple Electric in Chinese,” and other words. On the bathroom heater product, the “Opple” product label was pasted on the side, but the QR code on the product label was scratched off. The QR code on the back of the ceiling lamp and the QR code on the flat lamp have all been scratched off, and the three codes on the packaging box were scratched off.

Opple filed an unfair competition lawsuit against Dingfeng for scrapping codes to sell goods. The first instance court found that:

As a seller, Dingfeng should know that any alteration or scratching on the product packaging will affect the integrity of the product outer packaging, even affect the traceability and quality assurance functions of the goods sold, and also destroy the order of fair competition among all dealers that sell the brand’s goods, increase the cost of communication between consumers and brands when they encounter quality problems, harm consumer’s rights and interests, and may also cause derogation of the brand value of the right holder. Dingfeng’s sales of code-scratch products undermined the rights holder’s product management system, disrupted the normal order of market competition, harmed the legitimate rights and interests of other operators and consumers, and constituted unfair competition.

Regarding the amount of compensation, since Opple did not provide evidence to prove the benefits gained by Dingfeng from the infringement or the losses it suffered due to the infringement, the first instance court comprehensively considered the popularity of Opple’s brand and trademark, Dingfeng’s subjective fault and the nature and consequences of its infringement behavior, as well as Opple’s reasonable expenses to stop the infringement, and determined that Dingfeng should compensate in the amount of RMB 60,000 (USD8,346).

Dingfeng Company appealed. After the trial, the court of second instance found:

Regarding the products sold by Dingfeng, the logistics outer packaging and the QR codes on the products were scratched, but the QR codes on the outer packaging of the products, as well as all packaging, instructions, trademarks and manufacturer information on the products were completely retained. And according to Opple’s statement, the products involved are indeed products manufactured and sold by Opple. Consumers can also verify the authenticity and apply for after-sales service through the QR code on the product packaging. Therefore, Dingfeng’s sales behavior will not cause consumers to confuse or misunderstand the origin of the products involved.

(1) Regarding consumer interests. What consumers buy are genuine products produced and sold by Opple. They can verify the authenticity and apply for after-sales service by scanning the QR code on the packaging box of the product involved. Although Dingfeng did not inform consumers in advance about the code scratching, consumers were able to determine the source of the products involved by relying on trademarks and authenticity verification, and could still enjoy the product quality and after-sales services provided by Opple, and their interests were not harmed. Moreover, ordinary consumers can freely choose and determine goods or services through information such as trademarks, manufacturers, and after-sales services. The distribution management system within the manufacturer will not have an impact on the free decision-making of ordinary consumers. The source of the goods is authentic, and the after-sales service is guaranteed. Under the circumstances, Dingfeng’s scratching will not affect consumers’ rational judgment on free decision-making.

(2) Regarding the interests of operators. Dingfeng sold genuine products produced and sold by Opple at normal market prices. This behavior had no adverse impact on Opple’s product market share, product sales profits, products and corporate reputation. Dingfeng’s code scratching behavior made it impossible for Opple to internally trace the information of authorized dealers, but it only damaged Opple’s internal management system to a certain extent. Opple’s external operations, external trading opportunities, and external market competitive advantages were all undamaged.

(3) Regarding social and public interests. In this case, the goods trading behavior was open and free, and the transaction price was fair. There was no behavior that restricted competition or harmed the interests of other competitors of Opple. It did not have a negative impact on the legitimate and orderly market competition order, and social and public interests were not harmed.

In summary, this court believes that although Dingfeng’s code scratching hindered Opple’s internal management and caused certain damage its interests, according to the principle of proportionality and the principle of interest measurement, this behavior did not harm consumers. The interests have not reached the level of adversely affecting the competitive environment and order of competition, and there is no need to apply the Anti-Unfair Competition Law. The first instance court made an error in its determination, resulting in an erroneous judgment. This court corrected it and ruled that the original judgment should be revoked and all of Opple’s claims should be dismissed.

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Weekly China Trademark News Updates

February 6, 2024

1. RMB 22.14 million damages was ordered against the defendant taking advantage of “Belle in Chinese” and “BELLE” without authorization

Recently, the Zhejiang High Court concluded a trademark infringement and anti-unfair competition lawsuit against the appellant Baoyang Liu for his involvement with the appellees New Belle Shoes (Shenzhen) Co., Ltd. (“New Belle”), Lirong Shoes (Shenzhen) Co., Ltd. (“Lirong”), the defendant in the first instance, Wenzhou Guangyuan E-Commerce Co., Ltd. (“Guangyuan”).  The court held that Liu is liable for trademark infringement and should stop the infringement and compensation to Lirong for economic losses and reasonable rights protection expenses of RMB22.14 million (USD3.11 million).

The court found that the Cited Marks have accumulated high goodwill nationwide through its continuous use and publicity by the trademark owner and its authorized parties. The “Belle in Chinese” and “BELLE” marks were once recognized as well-known marks and have been widely used in footwear products. They enjoy a high level of fame and popularity. Liu used the Disputed Mark in his Chinese TikTok store name, account, product links, product labels, hangtags, video promotions, and product introductions, which could be used to identify the source of the goods and constituted trademark use. The Disputed Marks “Australia Belle in Chinese” and “Australia Belle in Chinese + AOZHOUBELLE” completely include the Cited Marks. Although “Australia in Chinese” and the pinyin “AOZHOU” are included, they are only used to refer to the location in the minds of the general public. The identifying part of the Disputed Mark is still “Belle in Chinese” and “BELLE.” The Disputed Mark and the Cited Marks are used in the same class of goods, which is enough to confuse the relevant public as to the source of the goods. The two marks constituted similar marks. Liu used trademarks similar to the Cited marks on similar goods, which could easily cause confusion and misunderstanding among the relevant public and constituted trademark infringement.

To apply punitive damages, the test is “intentional infringement” and “serious circumstances.” First, the Cited Marks should have high distinctiveness and fame through continuous use and publicity. Lirong has opened a number of “Belle in Chinese/BELLE” brand TikTok accounts and stores. As a footwear business operator, Liu should have known that and make reasonable avoidance. Liu, however, actively sought to acquire the “” trademark that was similar to the Cited Marks in order to use it illegally. His use highlighted “Australia Belle in Chinese,” and replaced “AOZHOUBAILI” with “AOZHOUBELLE,” which fully included the Cited Marks in seeking of confusion. Liu actively used the Disputed Marks in TikTok stores, accounts, product tags, product links, video promotions to confuse consumers. Its intention to take advantage of the Cited Marks was obvious. Liu registered and established “Wenzhou Lucheng District Huibu Shoes Store” and opened a TikTok store “Australia Belle Shoes in Chinese” store that corresponds with his TikTok account “Australia Belle Official Flagship Store in Chinese.” Subsequently, Liu registered four individual companies and opened four TikTok stores respectively. Liu began to use the Disputed Marks on infringing goods and selling them on a large scale. The series of infringements carried out by Liu showed his strong intention, planning and organization, which met the first test of “intentional infringements.”

Second, Liu mainly sold infringing products through TikTok live broadcasts and TikTok stores that was not limited by time and place and can quickly accumulate a large number of customer groups in a short period of time, thereby achieving sales conversion. According to the facts found, its TikTok store “Australia Belle Shoes in Chinese” was opened on February 25, 2021, and by May 7, 2022 the number of fans has reached 936,000, and 519,000+ products have been sold. As of June 10, 2022, the number of fans has increased to 1.02 million, and 550,000+ products have been sold. The number of followers of his other TikTok accounts and online stores “Abao Selected Women’s Shoes in Chinese” and “Oucai Women’s Shoes Store in Chinese” also reached 315,000 and 69,000 respectively. Judging from the sales volume, the total transaction volume of only the five TikTok stores involved in the case has reached RMB 44.08 million. It was also found on Pinduoduo and Taobao that Liu was selling shoes using the Disputed Mark during the same period. It can be seen that compared with the traditional sales model, infringement in this case was carried out through online live broadcasting and other methods. The scope of infringement was wider and the profits from infringement were higher. At the same time, it also caused greater losses of trademark goodwill and losses to New Belle and Lirong. Economic losses are considered “serious infringement.” Therefore, Liu’s infringement met the statutory requirements for punitive damages, and the first instance court did not err in applying punitive damages.

Regarding the calculation of punitive damages, New Belle and Lirong agreed to calculate Liu’s infringement profits based on the total transaction volume of RMB 44.08 million of the five TikTok stores involved in the case obtained by the first instance court. Lirong issued the “Special Audit Report on Belle Brand Sales and Operations” stating that the net profit margin of Belle brand sales was 30.73%, of which the net profit margin of offline physical stores was 28.97% and the net profit margin of online e-commerce stores was 35.42%. This court found that the first instance court referred to the profit rate data provided by Lirong, combined with the time when Liu’s online stores stopped infringing, the damage caused, the possible existence of some non-infringing product sales links, the commission of live broadcast sales on TikTok, and Taobao, Pinduoduo and other platforms that infringing shoes were being sold. It was reasonable to determine that the profit margin of the online store involved in selling infringing goods was 25%. Based on this, this court determined that Liu’s infringement profits were RMB 11.02 million and applied one-time punitive damages based on this calculation base. It also determined that the reasonable expenses of New Belle and Lirong were RMB 100,000. The final amount of compensation is RMB 22. 14 million.

2. The decoration of “Crocs” has lost its distinctive features and cannot protected under the Anti-Unfair Competition Law

The Fujian High Court concluded a trademark infringement lawsuit between the appellant Crocs Trading (Shanghai) Co., Ltd. (“Crocs Company”) and the appellants Pan Zhiming, Quanzhou Fengze District Zhongkuo Trading Co., Ltd. (“Zhongkuo”), Quanzhou Fengze Chaoyi E-Commerce Co., Ltd. (“Chaoyi”), Quanzhou Jixuan Trading Co., Ltd. (“Jixuan”), and an individual Huang. The defendants were ordered to immediately stop the trademark infringement and compensate Crocs Company for economic losses and reasonable expenses of RMB 1 million (USD140,480).

Here, Crocs Company is the owner of the “CROCS” mark (“Cited Mark”). Through Crocs Company and its affiliated companies’ continuous use and publicity, the Cited Mark has obtained relatively high fame in its approved class. The Disputed Mark is “CROSS,” which was used on the same class of goods as the Cited Mark. The Disputed Mark was used on the shoe product itself, product packaging boxes, and the sales page of the e-commerce platform. Such uses were clearly trademark uses. Using the general attention of the relevant public as the standard, when comparing the Disputed Mark and the Cited Mark in isolation, the distinctive part of the two marks constituted similar. Under the circumstances that the Cited Mark is relatively famous, the Disputed Mark is likely to cause confusion. The first instance court did not err in finding that the Disputed Mark constituted an infringement of the Cited Mark.

In this case, Crocs Company claimed that the product decoration of its CROCS brand “Classic Crocs in Chinese,” “Crocband Kaluoban in Chinese,” and “Bayaband Clog Beiyakaluobankelulu in Chinese” series of shoes falls within the scope of the Anti-Unfair Competition Law because of its decoration has a certain influence. Judging from the evidence provided by Crocs Company, although the “CROCS” brand series of shoes have gained a certain degree of popularity through continued use and publicity, there is no sufficient evidence to prove that the relevant public has regarded the construction upholstery of this series of shoes to be associated with Crocs Company. Although there was a previous judgment that protected the decoration claimed by Crocs Company, that judgment was in 2015, which was a long time before the litigation in this case occurred. The uniqueness of a mark’s decoration should be combined with the public perception at the time of the dispute. Knowledge and whether the decorative mark also have distinctive features that distinguish the source of the goods shall be used as the criterion for judgment. Whether the decorative log has been protected is only one of the factors to be considered. Judging from the supplementary evidence submitted by the defendants, “crocs design shoes” products are relatively common in the market and have different functions. Third parties outside of this case have successfully registered for design patents based on improvements to such features. Even if the decoration claimed by Crocs Company had certain uniqueness in the early stage, there is no evidence to prove that Crocs Company actively defended its rights when a large number of footwear products with the same or similar features appeared on the market, which made such decoration more general and losing its inherent distinctiveness. Based on the above analysis, the decoration claimed by Crocs Company does not meet the requirements for decoration with certain influence stipulated in the Anti-Unfair Competition Law and should not be protected.

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Weekly China Trademark News Updates

February 1, 2024

1. “Château Lafite in Chinese” took a free ride on the “LAFITE” mark’s fame and the China Supreme Court applied punitive damages and sentenced RMB 79.17 million in damages

Recently, the China Supreme Court (“SPC”) concluded a trademark infringement and unfair competition dispute between the appellants Nanjing Golden Hope Wine Co., Ltd. (“Golden Hope”), Nanjing Manor Lafei Wine Co., Ltd. (“Manor Lafei”), Nanjing Huaxia Grape Winery Co., Ltd. (Huaxia), Shenzhen Junteng Wine Co., Ltd. (“Junteng”) and the respondent Chateau Lafite Rothschild (“Rothchild”). The SPC held that the appellants should stop their trademark infringement and unfair competition, and that Rothschild should receive a total of RMB 79.17 million (USD 17.97 million) in economic losses and reasonable expenses to stop the infringement.

Issue I – Whether the appellants’ use of the accused marks constitutes trademark infringements

1. The Disputed Mark is “Manor Lafei in Chinese,” in which “Manor in Chinese” indicates a location or an organizational format and lacks distinctive features when used on wine and other goods. Thus, “Lafei in Chinese” is the main identifying part of the mark. The Cited Marks in this case are “LAFITE” and “CHATEAU LAFITEROTHSCHILD,” with “LAFITE” being the distinctive identifying part. Regarding whether “Lafei in Chinese” can form a stable corresponding relationship with “LAFITE,” this court’s previous judgment on April 1, 2005, found that before the application date of the “Manor Lafei in Chinese” mark, Rothschild had already used the name “Lafei in Chinese” on relevant sales flyers in mainland China. “Lafei in Chinese” refers to “LAFITE,” and “Lafite in Chinese” also appears in publicity reports related to “LAFITE.” Rothschild has objectively established a solid connection between “Lafei in Chinese” and “LAFITE” through many years of business operations. Therefore, the distinctive part of the accused infringing mark “Manor Lafei in Chinese” is the same as the Chinese translation of the Cited marks or identical to the distinctive part of the Cited Marks. The two marks constitute similar marks.

Appellants used the “Manor Lafei in Chinese” logo that was similar to the Cited Marks in the allegedly infringing products and transaction documents produced or sold, which constituted trademark use. Manor Lafei and others also published articles on their websites to introduce Bordeaux wineries represented by “Lafite in Chinese.” In their advertisements, they introduced that their wines are produced in Bordeaux and have historical heritage in an attempt to increase the popularity of “LAFTTE” wines. Considering the fact that the Cited Marks have a high degree of popularity due to continuous use when the alleged infringement occurred, as well as the actual use by Manor Lafei and other appellants, it can be determined that the alleged infringement could easily cause confusion and misunderstanding among the relevant public.

2. The “MANOR” in the accused infringing mark “LAFEIMANOR” is a French word, and its Chinese meaning is “manor.” It lacks distinctive feature when used on wine and other goods. Therefore, “LAFEI” is the distinctive feature of the mark. Comparing the distinctive part of the Disputed Mark “LAFEI” with “LAFITE,” they have the same initial letters and are similar in letter composition, arrangement order, pronunciation, etc. Therefore, the Disputed Mark “LAFEIMANOR” and “LAFITE” constitute similar marks with the Cited Marks “LAFITE” and “CHATEAU LAFITE ROTHSCHILD.” Golden Hope and other appellants used “LAFEI MANOR” on wine goods, which constitute as a similar mark on identical or similar goods with the Cited Marks owned by Rothschild, which could easily cause confusion and misunderstanding among the relevant public.

Issue II – Whether Manor Lafei’s use of “Lafei Mano in Chinese” as its trade name constitutes trademark infringement

Manor Lafei was registered on August 11, 2006, using “Manor Lafei in Chinese” as its corporate name. Since then, Manor Lafei’s official website and its “Specialty Store Investment Manual” have separately used “Manor Lafei” to refer to Chateau Lafite. Manor Lafei prominently used its “Manor Lafei” brand name in its business activities. As mentioned, “Manor Lafei” is similar to “LAFITE,” and “LAFITE” wine had already entered China before the establishment of Manor Lafei and was known to the relevant public. Therefore, Manor Lafei’s registration of “Manor Lafei in Chinese” as a trade name and prominent use of it on goods that are identical or similar to the goods approved for use of the “LAFITE” mark could easily cause confusion and misunderstanding among the relevant public.

Issue III – Whether Manor Lafei’s promotional activities constituted unfair competition

Manor Lafei uses slogans such as “Manor Lafei – the focus of the world’s attention, God’s favorite wine has finally come to China” in its “Specialty Store Investment Manual” to promote and introduce its “Manor Lafei” wine. The semantics of the said advertising slogan are vague and exaggerate the historical heritage and popularity of the Chateau Lafite wine. Based on the popularity of Rothschild and “LAFITE” wines, as well as the corresponding relationship formed between the “Lafei in Chinese” and “LAFITE” marks, such advertising slogan may easily cause the relevant public to mistakenly believe that the wine of “Manor Lafei in Chinese” is the wine of a world-renowned winery, thereby misunderstanding the quality and reputation of the product, which constituted misleading false promotion, and damaging the interest of Rothschild.

Issu IV –The amount of damages

First, according to the evidence submitted by Golden Hope, there were a total of 757 dealers and agents of “Manor Lafei in Chinese” wine across the country, and “Manor Lafei in Chinese” wine has been stationed in nearly 2,000 supermarket systems. The cost ranges from RMB 4 – 5 to more than RMB 10, but the sales price ranges from more than RMB 60s to over 1000. The illegal profits are as high as ten times or even hundreds of times. This shows that the illegal profits obtained by the seven appellants including Golden Hope as a result of the infringement far exceeded RMB 100 million. Second, the court rechecked and counted the sales data and payment letters of each appellant to calculate the sales volume and single bottle sales price of the accused infringing goods. The cost price of a single bottle is calculated based on the purchase situation of each appellant. Finally, the court adopted the calculation method of (single bottle sales price – single bottle cost price)/single bottle sales price to calculate the profit margins of each appellant. According to the recalculated sales price and cost price data, the profit margin of Manor Lafei is 67%, the profit margin of Huaxia is 68%, and the profit margin of Junteng and Perun is both 31%.

On this basis, the court comprehensively considered the nature of each appellant’s infringement, degree of subjective fault, duration of infringement, profits from infringement and other factors, and awarded Rothchild a damage of RMB 79.17 million (USD 17.97 million) for its economic losses and reasonable expenses paid to stop the infringement.

2. “Huawei” trademark infringement case – four times punitive damages – RMB 10 million

Recently, the Shanghai Jinshan District Court concluded a first-instance trademark infringement lawsuit between the plaintiff Huawei Technologies Co., Ltd. (“Huawei”) and an anonymous cosmetic company, Jishe Clothing (Shanghai) Co., Ltd. (“Jishe”), an individual Li. The court ordered the defendants to immediately stop the trademark infringement and jointly compensate Huawei for economic losses of RMB 10 million (USD 2.27 million).

The court found that Huawei legally obtained the right to register the “Huawei in Chinese” mark. The creative titles of 27 products in the Tmall store “Kubaluo Flagship Store” prominently use the words “Huawei in Chinese,” “Huawei Genuine Product in Chinese,” “Suitable for Huawei mobile phone in Chinese,” “Suitable for Huawei genuine mobile phone in Chinese” and other words in prominent positions. It did not display its own product brand and the operating entity of the Tmall store “Kubaluo Flagship Store” infringes Huawei’s trademark right. The operating entities of the Tmall store “Kubaluo Flagship Store” are the two defendants. Jishe and the anonymous cosmetic company have the same controlling shareholder or the same actual controller, and the control relationship lasts for 6 months or more. Therefore, Jishe and the anonymous cosmetic company jointly committed infringing acts.

Defendant Li’s personal bank account is mixed with defendant Jishe. Li’s personal Alipay account is related to Jishe and the anonymous cosmetic company, and the anonymous cosmetic company’s invoice is defendant Li. Taking the above circumstances into consideration, Li is the actual controller of Jishe and the anonymous cosmetic company. Although the infringement in this case was ostensibly carried out by the business entities of the Tmall store “Kubaluo Flagship Store,” namely the defendants Jishe and the anonymous cosmetic company. The defendant Li, as the actual controller, had complete control over Jishe and the anonymous cosmetic company. Li was aware of the infringements carried out by the two entities from the beginning and participated in it using personal bank accounts and personal Alipay accounts. Therefore, Li is a joint infringer and should bear joint and several liability.

Regarding the benefits gained by the Tmall store “Kubaluo Flagship Store” due to infringement, according to the identified facts, the sales volume of 27 infringing products was RMB 19.99 million. Regarding the profit rate, the Huawei claimed that the profit rate of the 27 infringing products can be calculated based on the facts found in the administrative penalty decision, which was 39.15%. This court believes that the data did not include warehousing, transportation, and other costs, but the data is verified by the market supervision and management department in accordance with the law. Therefore, this court refers to the said data and determines the profit rate to be 30%. In summary, the benefits obtained by the anonymous cosmetic company and Jishe due to infringement were RMB 5.99 million. The court held that the defendants, the two entities intentionally infringed upon Huawei’s trademark right with deep subjective malice, long infringement time, and large scale of infringement, which was a serious situation. The base number should be RMB 5.99 million and four times punitive damages should be applied to the defendants, which resulted in RMB 23.98 million. Huawei claims a total economic loss and punitive damages of RMB 10 million, which did not exceed the scope that the court can support according to law, therefore the court will fully support its claim.

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Weekly China Trademark News Updates

January 23, 2024

1. The Court Finds Geographical Indication Collective Mark “Champagne” Constitutes a Well-Known Mark

Recently, the Beijing High Court concluded a second instance trademark infringement dispute between the French Champagne Industry Commission (the “Champagne Commission”), Guangzhou Xuelei Cosmetics Co., Ltd. (“Guangzhou Xuelei”), and Beijing Yalishadi Cosmetics Co., Ltd. (“Beijing Yalishadi”). The court held that the “Champagne” mark with reg. no.  11127266 and the “Champagne in Chinese” mark with reg. no. 11127267 constituted well-known marks on wine and other goods. Guangzhou Xuelei and Beijing Yalishadi should immediately stop the infringement and compensate for economic losses and reasonable expenses of RMB 220,000 (USD 30,980).

Cited Marks

The court found that: First, based on the sales scope, sales volume and sales price of Champagne wine in the Chinese market, and the facts such as the advertising, honors and protected records of the registered “Champagne” and “Champagne in Chinese” marks in mainland China, it was sufficient to conclude that before the infringement occurred on July 5, 2019, the Champagne Commission’s “Champagne” and “Champagne in Chinese” marks have gained high visibility and influence on wine products, and were widely known to the relevant public and constituted well-known marks.

Second, although the packaging boxes and bottles of the accused infringing products were still marked with the words “MeiDun” and “Mei Dun in Chinese,” there are many cases in the market where two or more commercial logos are used on the same product at the same time. The existence of a commercial logo does not necessarily affect the role of other logos in distinguishing the source of goods. The allegedly infringing goods prominently use the “Champagne Life” and “Champagne Life in Chinese” logos on the bottle and packaging box in a more eye-catching manner. The said acts obviously have the purpose of indicating the source of the goods to enable the relevant public to distinguish different product providers, which constituted as trademark use under the Trademark Law.

Third, although the perfume product used by the accused logo and the wine product for which the “Champagne” mark is approved and famous for use are not classified as the same or similar goods according to the CNIPA Classification of Goods and Services, there are relatively large overlap among the relevant public. The “Champagne” and “Champagne in Chinese” marks have been widely known to the public, when the accused logos “Champagne Life” and “Champagne Life in Chinese” were used on the accused infringing goods, it was enough to cause the relevant public’s misunderstanding of the source of goods with the said well-known marks, which constituted an infringement of the Champagne Commission’s well-known trademark rights, and it should bear corresponding legal liability.

2. The Court Recognized “AO Smith in Chinese” as a Well-known Mark

Recently, the Jiangsu High Court concluded a second instance trademark infringement and anti-unfair competition dispute between A.O. Smith Corporation (“A.O. Smith”), A.O. Smith (China) Water Heater Co., Ltd. (“A.O. Smith China”), and Guangdong Simaisi Electric Co., Ltd. (“Guangdong Simaisi”), Taizhou Qingfeng Decoration Co., Ltd. (“Taizhou Qingfeng”). The court held that the “AO Smith in Chinese” mark with reg. no. 1114992 and “AOSmith” mark with reg. no. 2017196 constitute well-known marks on water heaters and other goods. The defendants infringed upon A.O. Smith and A.O. Smith China’s trademark right and should immediately stop the infringement and compensate for economic losses of RMB 1.5 million (USD211,400).

Cited Marks

The court found that: First, despite the administrative rulings found that when a third party used the “AO Smith in Chinese” mark on laundry machine goods in June 2003, the Cited mark “AO Smith in Chinese” with reg. no. 1114992 has not yet constituted as a well-known mar. According to the case-by-case principle followed by courts in recognizing well-known marks, such finding may not necessarily affect this court’s rulings of this case based on the evidence at hand. Therefore, whether the Cited Marks can be recognized as well-known marks shall be determined based on the evidence and facts of this case.

Second, if there is a slight difference between the actually used trademark and the registered trademark, but its distinctive features does not change, it can be regarded as the use of a registered trademark. Before October 2003, the plaintiff used the words “A.O. Smith” and “A.O. Smith in Chinese” in commercial activities, and a stable corresponding relationship between the two marks had been established. The plaintiff’s actual use of the two marks did not change the distinctive features of the trademark involved and can be regarded as trademark use. In addition, for trademarks that have been actually used before registration is approved, such use can be considered as a continuation of use. Therefore, it can be concluded that the plaintiff continued to use its Cited Marks before October 2003.

Third, comprehensive consideration of the sales contracts, advertising, promotion activities, media reports, audit reports involved, market survey reports, search reports, etc. provided by the plaintiff was sufficient to determine that before October 2003, the Cited Marks had been widely known to the relevant public in China and reached a well-known level, and is still well-known today.

In addition, in this case, the Cited marks mainly contains elements such as “Smith in Chinese” and “SMITH.” Through the publicity and use of the right holder, “Smith in Chinese” and “SMITH” have become the core elements for identifying the source of goods. The accused infringing logo is similar to the Cited Marks in text, pronunciation, and overall appearance, which constituted similar marks. When the alleged infringing trademark was used, the Cited Marks had already gained a high reputation across the country. The use of the accused infringing mark on the same or similar goods can easily cause confusion to the relevant public, and the accused acts constituted trademark infringement.

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Weekly China Trademark News Updates

January 17, 2024

1. The “Freshfragrance” mark  was invalidated by the “fresh” mark

In an administrative trademark invalidation dispute between the plaintiff Fresh Company and the defendant CNIPA and the third party Qiong Luo, the Beijing Intellectual Property Court held that the Disputed Mark violated Article 30, Article 31 and Article 32 of the 2013 Trademark Law. The CNIPA’s decision shall be revoked and the CNIPA shall make a new ruling.

Disputed Mark

No.13450891 Subclass 4402

Cited Mark 1	Cited Mark 2	Cited Mark 3	Cited Mark 4	Cited Mark 5
No. 13450891 Subclass 0306	No. 10838741 Subclasses 0301, 0305-0306	No. 8690350 Subclasses 0301, 0305-0306	No. 25228002 Subclass 4405	No. 22753556A Subclasses 4401, 4403, 4405

The first issue is whether the Disputed Mark filed by the third party violates Articles 30 and 31 of the 2013 Trademark Law. The court found that the Disputed Mark consists of the English letters “Freshfragrance”. according to the general English cognition level of Chinese consumers, it is easy to read it as two parts: “Fresh” and “fragrance” of which the “Fresh” part is the same as the Cited Marks 1 and 4 in letter composition. It is also identical with the distinctive part of Cited Marks 2 and 3. It is similar in pronunciation to the Cited Mark 5. The Disputed Mark constitute as an identical mark with all five Cited Marks.  Although all approved services such as “beauty services, massages, and manicures” for use under the Disputed Mark and the approved goods and services for use under the Cited Marks 1 to 5 are in different classes, when considering the following factors, they constitute similar marks. First, the “beauty services, makeup artist services, waxing and hair removal” and other services approved for use by the Disputed Mark are identical to the Cited Marks 1 to 5. The consumer groups of the goods and services approved for use such as “cosmetics and sanitary equipment rental” basically overlap, and are often used in combination, so they are highly related. Second, the Disputed Mark completely contains the distinctive parts of the Cited Marks 1 to 4. They are highly similar. Third, the plaintiff’s “fresh/fuleishi in Chinese” series of trademarks have gained a certain reputation on “cosmetics” products through continuous publicity and use. The coexistence of the Disputed Mark and the Cited Marks may easily cause confusion and misunderstanding the relevant public. In summary, the Disputed Mark and the Cited Marks 1 to 5 constitute similar marks on similar goods and services which violated Articles 30 and 31 of the 2013 Trademark Law.

The second issue is whether the Disputed Mark violates Paragraph 3, Article 13 of the 2013 Trademark Law. The court found that the sales evidence, publicity news, comment articles, etc. submitted by the plaintiff could prove that the plaintiff’s “fresh” and “Fuleishi in Chinese” trademarks had a certain degree of popularity on “cosmetics” products through use and promotion. However, after considering the scope of influence and scale of the popularity, the Cited Marks have not yet reached the level of well-known. Therefore, the filing of the Disputed Mark does not violate Paragraph 3, Article 13 of the 2013 Trademark Law.

The third issue is whether the Disputed Mark violates Paragraph 1(vii), Article 10 and Paragraph 1(ii), Article 11 of the 2013 Trademark Law. The plaintiff claimed that the word “fragrance” in the Disputed Mark means “perfume, fragrance” and its use in services such as Class 44 “beauty services and makeup artist services” can easily lead to consumers misunderstanding the content of the services. It is also a direct expression of the designated service. After hearing, the court held that the use of the word “fragrance” in services such as “beauty services and makeup artist services” can easily cause consumers to associate and believe that the services related to the use of the Disputed Mark denotes wonderful enjoyment, but such associations have not yet reach the extent of being deceptive, it does not violate Paragraph 1(vii), Article 10  of the 2013 Trademark Law. In addition, although the Disputed Mark may cause consumers’ associations and imaginations, it is not a direct description of its service, so it does not violate Paragraph 1(ii), Article 11 of the 2013 Trademark Law.

The fourth issue is whether the Disputed Mark damages the plaintiff’s prior trade name rights. The court found that the plaintiff had been selling “fresh/fuleishi in Chinese” brand cosmetics in China since 2012 at the latest. Through continuous publicity and use, its English trade name “fresh” has gained a certain reputation in cosmetic products. The third-party should have known that the Disputed Mark “Freshfragrance” completely includes the plaintiff’s English trade name “fresh” and the two are similar in overall appearance and text composition. The approved services under the Disputed Mark such as “beauty service and make-up artist service” basically overlap with the consumer groups of the “cosmetics” goods for which the plaintiff’s trade name is famous. Thus, the two mark constitute similar goods and services. Therefore, the application for registration of the disputed trademark damaged the prior right of the plaintiff and violated Article 32 of the 2013 Trademark Law.

Finally, the court held that the evidence on record was insufficient to prove that the filing of the Disputed Mark violated Article 4 and Paragraph 1, Article 44 of the 2013 Trademark Law.

2. Infringement of Dyson’s trademarks and unfairly competed with Dyson  was ordered to pay RMB 800,000 in damages

The Sichuan High Court dismissed a trademark infringement and unfair competition dispute brough by the appellant Dyson Technology Chengdu Co., Ltd. (“Dyson Chengdu”) against the appellees Dyson Technology Co., Ltd. (“Dyson”) and Dyson Trading (Shanghai) Co., Ltd. (“Dyson Shanghai”) and upheld the lower court’s judgment.

The first instance court found that: 1. Dyson Chengdu has posted on its website www.hvlsfan.cn, www.daisencd.com, WeChat applet “Sichuan Industrial Ceiling Fan,” and the 1688 platform “Dyson Technology Chengdu Co., Ltd.” store , “Dyson Technology Chengdu Company” (TikTok account xc516) and “Dyson Technology Chengdu Co., Ltd.” (Tiktok account Daisenkejich) and third-party websites the accused infringement marks “Dyson in Chinese” and “Dyson Technology in Chinese” and “DAISEN” for the purpose of selling and promoting its industrial fans. The use of the said logos had played the role of identifying the source of the product and constituted trademark use. The specific products used by Dyson Chengdu were mainly large industrial ceiling fans, which is identical to the ceiling fans approved for use under the “Dyson in Chinese” and “DYSON” trademarks with reg. nos. 6369537 and 6334841 (“Cited Marks”) claimed by Dyson and Dyson Shanghai in Class 11. The “Dyson in Chinese” and “Dyson” logos used by Dyson Chengdu were identical or similar to the Cited Marks. The “DAISEN” mark used by Dyson Chengdu had identical pronunciation as the “DYSON” mark owned by Dyson with only some letters being different. Since the Cited Marks had a high reputation in the relevant industries in China, based on the general attention of the relevant public, the two marks were similar. To sum up, Dyson Chengdu used logos similar to the Cited Marks in identical or similar goods without the permission of Dyson and Dyson Shanghai, which could easily cause confusion among the relevant public and infringed upon the trademark rights of Dyson and Dyson Shanghai. In addition, the first instance court held that the “DS and Design” used by Dyson Chengdu were neither identical nor similar to the Cited Marks, so it did not support the trademark infringement claim based on it. 2. The main part of the www.daisencd.com domain name registered and used by Dyson Chengdu in March 2021 is similar in pronunciation and spelling to the Cited Marks, which was enough to cause misunderstanding among the relevant public, and Dyson Chengdu has the bad faith intent to deliberately mislead users into accessing its website. Therefore, its actions infringed upon the trademark rights of Dyson and Dyson Shanghai. 3. Dyson Chengdu was registered and established in 2017. As a company that also produces and sells fan products, it should be aware of the popularity of the Cited Marks and the names of Dyson and Dyson Shanghai. However, it still used “Dyson in Chinese” as its company name, which is the same as the Cited Marks. Such actions showed subjective intent to take advantage of the goodwill of others, which may easily cause the relevant public to mistakenly believe that it was related to Dyson and Dyson Shanghai, or there was a specific connection that creates confusion. Therefore, Dyson Chengdu’s use of “Dyson in Chinese” as a corporate name and used words including “Dyson Technology” and “DAISENTECHNOLOGY” in recruitment, bidding and other business activities constituted unfair competition. Accordingly, the first instance court held that Dyson Chengdu should immediately stop the infringing behavior (including stopping using the infringing logo, stopping using and canceling the www.daisencd.com domain name, stopping using the company name with the same or similar words as “Dyson”, and change its company name), post apologies on newspaper to eliminate the impact, and compensation for economic losses and reasonable expenses totaling RMB800,000 (USD112,000).

Dyson Chengdu appealed. The Sichuan High Court found that the key issues in the second instance were 1. Whether Dyson Shanghai has the right to initiate litigation in this case. 2. Whether the accused actions of Dyson Chengdu constitute trademark infringement and unfair competition. 3. Whether the amount of compensation determined by the first instance judgment is appropriate.

Regarding issue 1, the court found that Dyson Shanghai was authorized by Dyson, the trademark owner, to use the Cited Marks within China, and had the right to file lawsuits for infringement of trademark rights, corporate names, etc. According to relevant legal provisions, Dyson Shanghai has the right to initiate litigation in this case.

Regarding issue 2, the Sichuan High Court found that the approved goods for use under the Cited Marks in Class 11, including air conditioning devices, ceiling fans, self-operated fans, etc., are the same as the large industrial fan used by Dyson Chengdu with the infringing logo. They constituted the same goods. Combined with the fact that the Cited Marks enjoys a high reputation in China, Dyson Chengdu used a logo similar to the Cited Marks on the same product, which was enough to confuse the relevant public and constituted trademark infringement. Regarding Dyson Chengdu’s appeal that its use of a legally registered corporate name does not constitute unfair competition, the court found that the evidence on record could prove that Dyson Shanghai has a certain market reputation in its industry and that the “Dyson” brand name is a company name with certain influence. Dyson Chengdu, as a later registered commercial entity that sells fan products like Dyson Shanghai, should be aware of Dyson Shanghai’s well-known status and reasonably avoid it based on the principle of good faith and recognized business ethics. However, Dyson Chengdu did not make any reasonable circumvention when registering its company name, and still used “Dyson in Chinese” in its company name, which could easily cause people to mistakenly believe that it has a specific connection with Dyson Shanghai and has the ability to take advantage of Dyson Shanghai’s good will which constituted unfair competition.

Regarding focus issue 3, Dyson and Dyson Shanghai did not provide evidence to prove the actual losses they suffered due to the infringement, nor the benefits gained by Dyson Chengdu from the infringement. There is no trademark license fee, etc. for reference in this case. The first instance court comprehensively considered the popularity and influence of the Cited Marks, the nature, duration, scope of influence and subjective state of the infringement committed by Dyson Chengdu, as well as the fact that a lawyer appeared in court in this case and the difficulty of the case. The court also considered the evidence collection process, lawyer’s work attitude and workload and other factors. The court finally determined that Dyson Chengdu should compensate Dyson and Dyson Shanghai for a total of RMB800,000 (USD112,000) in economic losses and reasonable expenses, which was not inappropriate.

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Weekly China Trademark News Updates

January 10, 2024

1. Damages of RMB 5 million was ordered against the counterfeit “Skechers” mark

SKECHERS U.S.A., INC. II (“Skechers”) sued individuals Xiong, Mao, Xiao and others for trademark infringement. The court found that Skechers is the owner of “,” “,” and “Skechers in Chinese” marks on sneakers related goods. All marks are valid. Xiong, Mao, and Xiao have been producing and selling shoes counterfeiting the registered trademarks of Sketchers since 2017. Xiong, as the main person in charge, opened the factory, was responsible for material procurement, and contacted potential customers. Mao and Xiao were in charge of the daily production matters of the factory and were responsible for the production and packaging of the counterfeited products. On May 20, 2021, the public security authorities arrested Mao, Xiao, and another individual Cai at the scene, and seized a total of 14,052 pairs of counterfeit Skechers sneakers, valued at up to RMB 8 million (USD1.12 million). On May 21 of the same year, the public security authorities again seized a total of 10,470 pairs of counterfeit Skechers sneakers by the four defendants, valued at nearly RMB 6 million (USD841,000). The Defendants Xiong, Mao, Xiao, and Cai produced and sold sneakers with counterfeit “SKECHERS” mark, which constituted the crime of counterfeiting a registered trademark, and also infringed the Skechers’ trademark right, and should be held liable for civil damages in accordance with the law. In this case, it has been ascertained that from 2017 to 2021, the Defendants produced and shipped a total of 321,211 pairs of counterfeit Skechers sneakers, which were valued between RMB 19 million to 305 million (USD 2.6 million to 42 million) according to the shipping price of RMB 60-95 per pair, and the total infringing profits of the four Defendants were calculated at a total amount of not less than RMB 2 million (USD279,000) based on the level of the actual profit margin of approximately 10% as confessed by the four Defendants. Due to the defendants’ infringement lasted for a long time, production, and sales scale, with subjective infringement of intent and infringement of the seriousness of the circumstances, Skechers claimed that Xiong’s damage should be tripled as punitive damages, the court supported Skechers’ claim and ordered Xiong to pay for economic loss of RMB 5 million (USD699,291) and reasonable costs of RMB 162,504 (USD22,727). Mao and Xiao should be jointly responsible for RMB 3662,504 of Xiong’s liability.

2. Davidoff wins another administrative trademark enforcement action

Hong Kong Wanli International Limited is the registrant of the “Davidowen Daweiouwen in Chinese” mark with reg. no. 12873589 (“Disputed Mark”). ZINO DAVIDOFF SA (“Davidoff”) filed an invalidation request based on its prior trademarks. After hearing, the court found that the goods designated for use by Davidoff’s “DAVIDOFF” mark with reg. nos. 1790412, G467510 and G876874 and the Disputed Mark fall into spices and cosmetics related classes. In terms of function, use, manufacturing department, place of sale, consumer, etc., they are identical or are highly related, and constitute identical or similar goods. Given that the Disputed Mark consisted a combination of “Davidowen” and “Daweiouwen in Chinese,” which is highly similar to the corresponding Chinese mark of Davidoff’s “DAVIDOFF” mark in China based on the evidence submitted by Davidoff. Davidoff’s evidence can prove that “Davidoff in Chinese” has formed a one-to-one corresponding relationship with the “DAVIDOFF” mark through long term use and promotion. Comparing the two marks, they are similar in terms of composition and pronunciation. Considering such high relevance, the Disputed Mark is highly likely to cause relevant public to be mistaken as a series of Davidoff’s “DAVIDOFF” mark and cause confusion. Therefore, the registration of the Disputed Mark violated Article 30 of the 2013 Trademark Law and should be invalidated.

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