Firm News

• MS. YAN ZHANG PARTICIPATES AS A SPEAKER FOR INTA’S 2022 ANNUAL MEETING LIVE+.

  INTA’s 2022 Annual Meeting Live+ was held in Washington, D.C., as a combined physical + virtual event from April 30 to May 4. With 6,500 organizations from 185 countries comprising INTA’s membership, the Annual Meeting has been recognized as the world’s largest IP event.

• MS. YAN ZHANG PARTICIPATES AS A PRESENTER AT STRAFFORD LIVE WEBINAR

  Ms. Yan Zhang, the partner of Beijing East IP Law Firm, participated as a presenter at Strafford live video webinar “Trademark Doctrine of Foreign Equivalents” on September 15, 2021. Brett Heavner, the partner of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP and Yinfei Wu, the attorney of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP also […]

• MS. YAN ZHANG GAVE A KEYNOTE SPEECH AT AN ONLINE SEMINAR HOSTED BY THE US-CHINA BUSINESS COUNCIL

  Ms. Yan Zhang, the partner of Beijing East IP Law Firm, gave a keynote speech on “Strategy on how to respond to bad faith trademark registration and malicious lawsuit” at an online seminar hosted by the US-China Business Council (USCBC) on June 17, 2021. Ms. Zhang analyzed the problems of trademark squatting in China, and […]

General News

• Repeated trademark infringer fined for RMB 4.9 million

  

  Repeated trademark infringer fined for RMB 4.9 million

  Background

  Vans, Inc. (“Vans”) sued Wenzhou Shuangxiang Co., Ltd., (“Shuangxiang”) for infringing its trademark right when Shuangxiang manufactured and sold shoes using Vans’ Cited Marks and requested the court to order quintuple punitive damages based on Shuangxiang’s unjustified gains. Vans claimed that not only did Shuangxiang infringed its trademark right by manufacturing and selling shoes using its Cited Mark, but Shuangxiang also knowingly continued its infringing activities after multiple local Administration for Market Regulation (“AMR”) raids and penalties issues. Vans found that Shuangxiang sold its infringing products through an associated company Chengdu Maijia Co., Ltd. (“Maijia”) and requested to have both companies to be held jointly liable. The court held against Shuangxiang and Maijia for infringing Vans’ trademark right and ordered RMB 4.89 million (USD 767,500) in economic loss and RMB 10,072 (USD 1,580) in reasonable legal costs.

  Cited Marks 

  Reg. No.: 21171127A Reg. Date: Nov. 7, 2017	Infant full suits; swimwear; costumes for masquerade balls; shoes (things worn on the feet); dress belts (clothes); wedding dresses; eye masks for sleep; shower caps; dress ribbons;
  Reg. No.: 4724337 Reg. Date: Aug. 28, 2014	Children’s clothing; trousers; underwear; bathrobes; outerwear; T-shirts; pajamas; garments; underpants; infant full suits; costumes for masquerade parties; soccer shoes; running shoes with metal spikes; shoes; metal accessories for shoes and boots; soles; Shoe heels; Insoles; Boots and Shoe Skids; Boots; Garment Ribbons; Shower Caps; Wedding Dresses.
  Reg. No.: 8606383 Reg. Date: Sep. 14, 2011	Ski boots; snowboard boots; sports shoes; shoes; boots.

  Issues

  1. Trademark infringements

  • Trademark use

  The defendants argued that the following marks were used only as decorations on the side of the shoes but not as trademarks. For shoes related products, however, labeling logos on both sides of a shoe can effectively convey the source of the products to consumers. Even if these logos were decorative use, such decorative use will not diminish its distinctive functionality. Therefore, the disputed logos constitutes as trademark use.

  Disputed Logos

  • Similarity between the Cited Marks and the Disputed Logos

  The Disputed Logos were consistent with the Cited Marks, and the subtle differences in graphics and texts were unlikely to catch consumer’s attention. Considering Vans has been publicizing and promoting its Cited Marks on its highly popular and distinctive skateboard shoes, when general consumers paying general attention to the Disputed Logos, they were likely to be confused regarding the source of the goods or mistaken that the source of goods was associated with Vans. Therefore, the Disputed Logos constituted as similar marks to the Cited Marks.

  • Joint liability

  Although the alleged infringing acts were carried out by Shuangxiang and Maijia, both companies were actually owned by a mother-son duo Xiang Jin and Xiulu Li. Together, they manage all manufacture, sales, contacts, payments, delivery, and everything else related to running a business. In particular, Xiang Jin, the mother, carried out every infringing activity and directly received unjustified benefits from the infringements. Therefore, all defendants were jointly liable.

  2. Punitive damages

  • Applicability of punitive damages

  Shuangxiang infringed Vans’ trademark right multiple times and received administrative punishments, however, Shuangxiang carried on its infringing acts. Additionally, Maijia, a company controlled by Shaungxiang’s owner Xiang Jing also infringed Vans’ trademark right. The relationship and acts between the two companies should be seen as intentionally infringing Van’s trademark right and punitive damages should be applied.

  • Determining the defendants’ sales amount

  Vans requested the court to retrieve sales amount of Shuangxiang and Maijia from 1688 and Tmall platforms. The parties agreed that those alleged infringing products marked with “successful transaction” on the platforms totaled RMB2.39 million (USD 375,325). The defendants, however, argued that the number may not be the most accurate number and should be reduced because there was a possibility of faked transactions.

  The court reasoned that sales amount was an important factor for consumer’s selection of products on e-commerce platforms. Creating fake sales, however, would present an image to consumers that the defendants’ shops were popular and trusted, which would likely to lure and mislead consumer to purchase at the defendants’ shops. Creating fake sales violated the principal of good faith and the court would not support the defendants’ claim to reduce the sales amount collected from the platforms.

  • Calculating actual damages

  The defendants had operated its infringement business between 2017 and 2021 and failed to provide its own profit when the court requested. Thus, the court calculated the defendants’ profit based on 50% of the gross profit margin of Vans’ Chinese licensee. Such reference can be rectified by publicly available industry numbers and the sales numbers provided by the defendants. Not to mention that the defendants operated infringement business, which should have obtained higher profit margin than companies in the same industry.

  • Determining actual damages

  Considering the defendants’ continuous and large scale of infringements on Vans’ trademark right and Vans’ high fame, the defendants’ acted with bad faith and the infringement circumstances were serious, the court ordered treble damages based on the defendants’ acts and the evidence provided.

  Takeaways

  1. Logos placed on two sides of the shoes are eye-catching and can effectively convey to consumers the source of goods. The decorative purpose of logos will not decrease its function to distinguish the source of goods. ‌
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  2. Continuous infringements by an infringer and its accomplice after receiving multiple administrative punishments should be considered as intentional infringement. When the circumstances are serious, punitive damages should be applied. ‌
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  3. When calculating damages, profits calculated based on defendant’s sales price and industrial average profit can be consider in order to determine the final base for damages calculation. ‌
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  4. Although generating fake purchase records can effectively reduce infringer’s actual profit, such records still negative impact rights owner’s marketing strategy, product’s goodwill, and market share.

   

  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

• Weekly China Trademark News Updates – May 17, 2022

  

  Weekly China Trademark News Updates

  May 17, 2022

  1. The Beijing IP Court reversed the lower court’s decision and supported RMB 5 million in damages for Wilo China

  The Beijing Intellectual Property (“IP”) Court recently ruled in favor of Wilo (China) Pump System Co., Ltd. (“Wilo China”) against Wilo Pump Industry (Jiangsu) Co., Ltd. (“Jiangsu Wilo”), Beijing Sunshine Keyuxin Energy Technology Co., Ltd. (“Sunshine Keyu”) in a trademark infringement and unfair competition case. The court supported Wilo China’s RMB5 million (USD740,000) damages claim and reasonable expenses of RMB300,000 (USD44,410).

  In January 2000, the German Wilo established Wilo China to operate businesses including production, design, installation and maintenance of water pumps, water pump components and water pump system components. The German Wilo has applied for a number of the “WILO” mark on pump products since 1994, and applied for the “WILO in Chinese” mark in Class 7 for machines, machine casings (machine parts) merchandise in 2005. On April 24, 2017, Wilo China notarized the purchase of three accused infringing pump products (“Disputed Products”) from Sunshine Keyu where the label “Wilo in Chinese Pump Industry” was attached to packaging, machine shells, brochures, certificate, etc. Sunshine Keyu. recognized that it sold the products of Jiangsu Wilo and Wilo China at the same time. Jiangsu Wilo recognized that it manufactured and sold the Disputed Products. In addition, Jiangsu Wilo continued to promote and sell various types of pump products through its official website and e-commerce platforms. Wilo China sued and claimed that Jiangsu Wilo manufactured and sold the Disputed Products, and Sunshine Keyu’s sale of the Disputed Products infringed its license to use the Cited Marks and that Jiangsu Wilo’s use of “Wilo in Chinese” amounted to unfair competition.

  Cited Marks

  The first instance court held that the defendants did not infringe upon Wilo China’s trademark right and their acts did not amount to unfair competition. Wilo China and the defendants appealed to the Beijing IP Court. The Beijing IP Court found that Jiangsu Wilo’s selling of pump related products through JD.com and other e-commerce platforms and Sunshine Keyu sold the Disputed Products involved in the case. The Beijing IP Court determined that the alleged infringing acts committed by Jiangsu Wilo constituted trademark infringement and unfair competition, and the alleged infringing acts committed by Sunshine Keyu constituted trademark infringement. The Beijing IP Court also conducted an in-depth discussion regarding the defendant’s legal source defense. The court held that Sunshine Keyu’s selling of the Disputed Products did not meet the conditions for exemption from liability by applying the legal source defense, and should bear appropriate compensation liability in accordance with the law.

  2. Using “Huawei in Chinese” as a search keyword infringed upon Huawei’s trademark right

  The Futian District Court of Shenzhen recently ruled in favor of Huawei Technologies Co., Ltd. (“Huawei”) against Shenzhen Mingyu United Technology Co., Ltd. (“Shenzhen Mingyu”) in a trademark infringement case. The court held that using “Huawei in Chinese” as a search keyword and in product names infringed upon Huawei’s Cited Marks. The court ordered RMB500,000 (USD74,000) in damages.

  Cited Marks

  In 2014 and 2015, Huawei applied for the registration of the “HUAWEI and Design” mark and the “HUAWEI in Chinese” mark in Class 9 for headphones and other products. Shenzhen Mingyu opened a “SCOLiB Flagship Store” on Tmall.com and sold products such as “original genuine earphones suitable for Huawei earphones.” Meanwhile, “Huawei in Chinese” and its product display pictures are marked with a pattern similar to the “HUAWEI and Design” mark, but its actual brand is SCOLIB.

  The court found that the accused infringing product was the same as the approved goods for the Cited Marks. The defendant set “Huawei in Chinese” as a search keyword and used the word “Huawei in Chinese” in the product name constated as identical marks to the Cited Marks. The picture used by the defendant on the displayed was also similar to the Huawei’s “HUAWEI and Design” mark. The defendant set “Huawei in Chinese” as a search keyword, used the words “suitable to Huawei” and “authentic Huawei headset” in the product name, used a logo similar to the “HUAWEI and Design” mark on the display pictures, and used “Huawei in Chinese” obviously showed its bad faith intention to take advantages of the Cited Mark’s popularity, which was likely to cause the relevant public to believe that the defendant’s headphones had a specific connection with Huawei and cause confusion.

  3. The Shanghai IP Court recognized NOK’s “NOK” mark as a well-known mark

  The Shanghai IP Court recently ruled in favor of NOK CORPORATION against Enoukai (Tianjin) Lubricating Oil Co., Ltd. and Shanghai Torch Lubricating Oil Co., Ltd. in a trademark infringement and unfair competition case. The court recognized NOK’s “NOK” mark as a well-known mark on oil seal products and held that the defendants’ use of the “NOK” mark, registration of the “Enoukai in Chinese” corporate name, and registration of “nokrhy.com” constituted as trademark infringement and amounted to unfair competition. The court ordered RMB1 million (USD148,000) in damages and reasonable expenses of RMB200,000 (USD29,606).

  Cited Mark

   

  NOK applied for the registration of the “NOK” series of trademarks in China in the 1970s. After long-term use and publicity, the “NOK” trademark enjoyed a high market reputation among the relevant Chinese public. The defendants had continued to produce and sell lubricants, antifreeze and other products bearing the “NOK” trademark since 2017. The defendants also registered and used “Enoukai in Chinese” as its corporate name, and registered and used the domain name “nokrhy.com.”

  The court found that NOK’s “NOK” mark was a well-known trademark on oil seal products and determined that the “lubricating oil” product was closely related to the “oil seal” product. The defendants’ use of the registered trademark “NOK” infringed NOK’s “NOK” mark. “NOK” has a corresponding relationship with the Chinese characters “Enoukai in Chinese,” and the “NOK” trademark had a high reputation. The defendants had the intention to take advantages of the reputation of the “NOK” mark. The use of the “Enoukai in Chinese” as corporate name could easily lead to confusion and amounted to unfair competition. The defendant’s registration and use of the domain name “nokrhy.com” also amounted to unfair competition.

  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

Publications

• Application of the “Other Unjustified Means” under Article 44 Paragraph 1 of the New Trademark Law

  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

• Well-Known Mark Recognitions in China – Part I

  Securing well-known mark (WKM) recognitions in China can give a broader protection to brand owners in both administrative and judicial disputes.

• Some Essential Aspects of Utility Model Patent in China

  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.

• Can a Markush Claim be Split?

  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. 

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