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East IP is pleased to announce the expansion of its trademark and IP enforcement practices with the arrival of two new teams, including SIPS, a market-leading IP firm based in Hong Kong, founded by Joe Simone, and a team of six partners with 36 professionals led by Jimmy Huang Jingwen, from the Beijing office of a top Chinese law firm.
INTA Annual Meeting at Atlanta – Ethics for Trademark Attorneys May 31, 2024 Austin Chang spoke at the “Ethics for Trademark Attorneys” panel at INTA Annual Meeting at Atlanta with other esteemed panelists Our very own counsel, Austin Chang, was invited by Catherine Farrelly, Chair of the Trademark and Brand Management Group at US Firm […]
East IP is pleased to announce the expansion of its trademark and IP enforcement practices with the arrival of two new teams, including SIPS, a market-leading IP firm based in Hong Kong, founded by Joe Simone, and a team of six partners with 36 professionals led by Jimmy Huang Jingwen, from the Beijing office […]
China’s new punitive damages system bolsters protection against trademark infringement
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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Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China |
Appointed Translators: Jason WANG / Austin CHANG, Beijing East IP Law Firm Author: Baoqing ZANG, Trademark Review and Adjudication Board (TRAB) Original Chinese text: China Industry and Commerce Newspaper June 21, 2016
Securing well-known mark (WKM) recognitions in China can give a broader protection to brand owners in both administrative and judicial disputes.
China has three types of patents, i.e., invention, utility model, and design. The utility model patent does not have the counterpart in some other jurisdictions such as the USA, so some essential aspects of the utility model patent will be introduced below for better understanding of it.
On December 20, 2017, in the Patent Reexamination Board of SIPO (PRB) v. Beijing Winsunny Harmony Science & Technology Co., Ltd. ((2016)最高法行再41号), the Supreme Court held that a Markush claim, when drawn to a class of chemical compounds, should be interpreted as a set of Markush elements rather than a set of independent specific compounds. The present case is a petition for retrial filed by the PRB, requesting the Supreme Court to review the second-instance decision made by the Beijing High People’s Court (“High Court”). In reversing the PRB’s decision in the invalidation proceedings instituted by Beijing Winsunny Harmony Science & Technology Co., Ltd. (“Winsunny”), the High Court recognized a Markush claim as claiming a set of parallel technical solutions.