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China’s new punitive damages system bolsters protection against trademark infringement
Recently, BEIJING EAST IP LTD assisted a Chinese sports equipment company to successfully solve the problem that its products sold on Amazon in Japan were complained by competitors for infringing Japanese design patent, and quickly lifted the delisting punishment.
Recently, Yongyu Zhang and Kaiyuan Song, agents of BEIJING EAST IP LTD., represented Daio Paper Corporation in the case of invalidation of “packaging bag” design patent, and successfully maintained the validity of the design patent.
Weekly China Brand Protection News
March 21, 2024
1. The Guangdong High Court reversed a trademark infringement dispute in a retrial regarding the use of trademarks in foreign OEM
On February 22, the Guangdong High Court reversed a trademark infringement dispute in a retrial between Fila Sports Co., Ltd. (“Fila”) and Hunan Jiahui Technology Co., Ltd. (“Jiahui”). The court upheld the first-instance judgment that ordered Jiahui to immediately stop infringing on Fila’s following trademark rights “Fila Company in Chinese & ,” “,” “,” and “,” and to stop producing and selling infringing products. Jiahui should compensate for economic losses (including reasonable expenses to stop the infringement) for RMB 200,000 (USD27,780).
In this case, courts at all levels confirmed that Jiahui’s processing and production activities were foreign-related OEM activities. Courts at all levels, however, have differed on whether Jiahui’s act of affixing the allegedly infringing logos on its goods is considered trademark use within the meaning of trademark law. On retrial, the Guangdong High Court found that: trademark use is an objective behavior, which usually includes many processes, such as physical affixing in the production process, marketing, and sales in the circulation, etc. When a trademark logo is physically affixed to a manufactured or processed product, if the logo has the likelihood of distinguishing the source of the goods and can play a role in distinguishing the source of the goods, such use should be deemed to be “trademark use” as stipulated in the Trademark Law. In this case, Jiahui, as an OEM, affixed the allegedly infringing logos on the garments it processed, which obviously had the purpose of identifying the source of goods. The logos can also have the actual effect of identifying the source of the goods and should be recognized as trademark use. Affixing a trademark is an objective act, and the identification function of the trademark is an objective result. Jiahui was fulfilling the obligations of the foreign-related OEM processing contract. This is only the reason for the act of affixing the trademark, and it will not affect the qualitative nature of such trademark use. In addition, with the development of e-commerce and the Internet, even if the allegedly infringing goods are exported goods, there is still the possibility of being returned to China. In summary, the second instance court found that Jiahui’s affixing a trademark did not constitute trademark use on the grounds that the allegedly infringing goods had not entered the mainland China market for circulation and sale, and the alleged infringing logo did not have the function of identifying the source of the goods in the mainland Chinese market was wrong and this court corrects it.
Jiahui claimed that it obtained the production authorization from Shengrui LIU, the owner of the “Feidisi in Chinese & FTSS” trademark, and directly exported products to the clients after OEM processing, so it did not infringe. According to the Trademark Law on the determination of trademark infringement, the principle of liability for trademark infringement shall be the principle of no-fault liability. Moreover, trademark rights are territorial. The trademark of the third-party in the case is only registered in the Taiwan region, and has no trademark rights in mainland China. Moreover, the trademark application of the third-party in the case was registered in 2019, which was later than the registration date of the Cited Marks of Fila. Fila has submitted evidence to prove that its series of trademarks involved in the case had a high reputation in the domestic market before the third-party trademark application was filed. As an operator in the same industry, Jiahui should have known about this fact. There is a clear difference between the “Feidisi in Chinese & FTSS” trademark and the accused infringing logos. The accused infringing logos have the upper and lower color distinction of the initial letters, which is completely consistent with the design of the initial letters of Fila’s trademark, making it more similar to Fila’s trademark. Under this premise, Jiahui still affixed the alleged infringing logo that is obviously different in appearance from its authorized logo on the clothing it processed. It was at least negligent and difficult to believe that it fulfilled its duty of reasonable review and care. In summary, Jiahui’s non-infringement defense cannot be established.
2. The defendants improperly took advantage of the market reputation of Liuzhou Hotel’s well-known trademark. Considered the infringing hotel was used as a quarantine hotel during the epidemic, the defendants were ordered to pay RMB 1 million.
On December 20, 2023, the Beijing Intellectual Property Court concluded a first-instance trademark infringement dispute between the plaintiff Liuzhou Hotel Group (“Liuzhou”) and the defendants Guiyang Yunlu Hotel Management Co., Ltd. (“Guiyang Yunlu”), Fujian Yunlu Hotel Management Co., Ltd. (“Fujian Yunlu”). The court ordered the defendant Guiyang Yunlu and Fujian Yunlu to immediately stop using the “Yulu Crowne Plaza Hotel” logo. The two defendants were ordered to compensate the Liuzhou for economic losses of RMB 1 million (USD138,900) and reasonable expenses of RMB250,000 (USD34,725).
Regarding whether the alleged infringement behavior of the Guiyang Yunlu infringed on Liuzhou’s trademark rights, in this case, comprehensive consideration was given to the multiple notarial certificates submitted by the Liuzhou proving that it promoted and used the cited trademarks, printouts of relevant online reports, court judgments and administrative agency rulings that Liuzhou’s trademark was deemed to be relatively well-known or had reached a well-known status. In this case, it can be determined that the “Crown Plaza Hotel” mark with reg. no. 2021114 approved for use in providing accommodation services has a high reputation in China and has reached well-known status.
The “Yulu Crowne Plaza Hotel” used by Guiyang Yunlu is similar in text composition and pronunciation to Liuzhou’s cited mark, which constituted an imitation and translation of Liuzhou’s well-known trademark. The defendant’s use of “Yulu Crowne Plaza Hotel” for the same services as Liuzhou’s well-known trademark was enough to make the relevant public associate that the trademark used by the defendants was closely related to Liuzhou’s well-known trademark, thus unfairly taking advantage of Liuzhou’s well-known mark market reputation and harmed its interests. Therefore, the defendant’s use of “Yulu Crowne Plaza Hotel” has constituted an infringement of Liuzhou’s well-known trademark.
Regarding compensation for losses. The court fully considered factors such as the alleged infringing hotel’s operating autonomy during the period when it was used as an quarantine hotel and the limited role of its logo as a trademark, as well as the overall situation of the hotel industry during COVID. The amount of compensation in this case should be limited to the statutory compensation amount in accordance with the law. Considering the close relationship between the first and second defendants such as shareholder relationship and trademark licensing, the two defendants in this case should bear joint and several liability.
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Weekly China Brand Protection News
March 13, 2024
1. The use of the right holder’s trademark on a mobile map is a trademark use
Recently, the Guang’an Intermediate Court concluded a trademark infringement dispute between Sichuan Jibang Trading Co., Ltd. (“Jibang”) and Yuechi County Yumin Gas Station (“Yumin Gas Station”). The court determined that Yumin Gas Station’s use of the “Zhongchuan Petroleum in Chinese” logo on the mobile map constituted a trademark infringement of “Zhongchuan Petroleum and Design” with reg. no. 21415831 of Jibang. The use should be stopped, and Yumin Gas Station should compensate Jibang for economic losses and reasonable expenses paid to stop the infringement totaled RMB50,000 (USD7,000).
Cited Mark
The court found that: First, Yumin Gas Station used the name “Zhongchuan Petroleum Yumin Agricultural Machinery Gas Station” in the mobile phone map to attract customers through the mobile phone map. Car owners often use mobile phone maps for navigation when driving, and passing vehicles can know where to refuel through the mobile phone map. At the same time, when refueling, car owners often want to have guaranteed oil quality and choose branded gas stations to refuel. The prominent use of the words “Zhongchuan Petroleum in Chinese” in the name plays a role in indicating the source of goods or services. Therefore, the use of “Yumin Gas Station” is a trademark use.
Second, the “Zhongchuan Petroleum in Chinese” used by Yumin Gas Station on the mobile map and the registered trademark of Jibang have the same composition and arrangement order, and can be regarded as the same trademark. Yumin Gas Station did not provide the time when it applied for trademark registration and the time when it used the registered trademark at the beginning of its establishment or earlier than Jibang. It used the “Zhongzhou Petroleum in Chinese” or “Zhongchuan Petroleum in Chinese” logo and had a certain impact, which was not in compliance with the requirements. It did not fulfill the elements of prior use defense. Yumin Gas Station used the same trademark as the registered trademark on the same goods without the permission of the trademark registrant, which infringed the trademark right of Jibang, and it should bear corresponding legal liability.
2. Bosch prevailed in a trademark infringement and unfair competition lawsuit
Recently, the Sichuan High Court concluded a second instance lawsuit for trademark infringement and unfair competition against Robert Bosch Co., Ltd. (“Bosch”), Bosch (China) Investment Co., Ltd. (“Bosch China”), Sichuan Bosch New Ventures Trading Co., Ltd. (“Sichuan Bosch”), Chengdu Yiluxing Petrochemical Co., Ltd. (“Yiluxing”), an individual Zheng, an individual Sun, Chengdu Maxto New Energy Lubricating Materials Co., Ltd. (“Maxto”). The court found that the defendants’ behaviors constituted an infringement of Bosch’s and Bosch China’s trademarks “BOSCH”, the design “” and “Bosch in Chinese.” The court ordered that Sichuan Bosch, Yiluxing, and individuals Zheng and Suns should immediately stop infringement and jointly compensate the plaintiff for economic losses of RMB3 million (USD417,000). As a co-manufacturer of the accused infringing products, Maxto should be jointly and severally liable for RMB 150,000 (USD20, 870).
Cited Marks
The court found that: First, Sun and Zheng, as natural persons, implemented the use of “Bosch Xinchuang”, “” and “Bosch Zhenyu” by establishing Sichuan Bosch, Yiluxing, Yongxing Business Department, and Yuanji Business Department. The act of using the accused infringing marks and producing and selling the accused infringing products has combined to form an intrinsically linked joint infringement. Maxto, together with Sun and Zheng, Yiluxing, and Sichuan Boschs jointly produced and sold some of the accused infringing products. The above acts all have the function of identifying the source of goods and are trademark uses.
Second, compared the allegedly infringing mark “” with the cited mark “,” both are circular graphic with the same structure. Only the direction of the graphic within the circle is different. They constituted similar. “Bosch Xinchuang in Chinese” and “Bosch Zhenyu in Chinese” are similar to the trademark “Bosch.” The Cited marks has formed a corresponding relationship with “Bosch in Chinese” through its use and promotion in China. Therefore, the use of “Bosch Xinchuang in Chinese” and “Bosch Zhenyu in Chinese” will also cause confusion among the relevant public about the source of the goods.
Third, the goods approved for use by the plaintiff’s trademark and the accused infringing products are both in motor vehicles and are related in terms of consumer targets, sales channels, etc. The relevant public generally believes that they have a specific connection and could easily cause confusion. They constitute similar goods. The defendants’ behaviors constitute trademark infringement.
In addition, the word trademarks “Bosch in Chinese” and “BOSCH” have a high reputation in their fields through the long-term operation of Bosch and Bosch China. Bosch Xinchuang was registered in 2016. As a competitor in the same field, it registered “Bosch in Chinese” as part of its corporate name and used it in its business activities. Its registration was enough to confuse the relevant public and to lead the public to mistakenly believe that the allegedly infringing products it produced and sold originated from Bosch or Bosch China, or believe that there was a specific connection with Bosch or Bosch China. Their acts constitutes 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 |
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.