Weekly China Brand Protection News

December 13, 2024

1. Huawei prevailed in a trademark infringement lawsuit with CNY 5 million in damages

Recently, the Guangdong High Court issued a final judgment in a trademark infringement and unfair competition lawsuit involving Huawei Technologies Co., Ltd. (“Huawei”) and the defendants Zhongshan Songling Appliance Gas Co., Ltd. (“Songling”) and Chengdu Hongnian Trading Co., Ltd. (“Hongnian”). The court found that Huawei’s “Huawei in Chinese” trademark (“Subject Mark”) constitutes well-known trademark for goods such as “mobile phones and smartphones.” The defendants were found to have committed trademark infringement and unfair competition, and the court ordered them to compensate Huawei for economic losses amounting to RMB 5 million (USD 688,000).

The court found the following facts:

First, the evidence provided by Huawei demonstrated that its “Huawei in Chinese” trademark, registered in October 2017, has been continuously used since its registration. Huawei and its affiliated companies invested substantial resources to promote the Huawei brand, which has received numerous accolades. Huawei’s “Huawei in Chinese” trademark was previously recognized as a well-known trademark by the Trademark Office. The continuous and extensive use of the Subject Mark coupled with Huawei’s high market share and reputation in the smartphone industry, confirms that, as of August 8, 2019, the trademark was widely recognized by the relevant public in China for Class 9 goods such as “mobile phones and smartphones,” achieving well-known status.

Second, Songling used marks such as “vavi Huawei in Chinese,” “Huawei Technology in Chinese,” “Huawei Kitchen and Bathroom in Chinese,” and “Huawei Kitchen Appliances in Chinese” on its official website, WeChat public account, business premises, product brochures, and on the packaging of products such as range hoods, water heaters, and gas stoves. These marks served to identify the source of goods, constituting trademark use. Among these, “Huawei in Chinese” is the most distinctive element. Upon comparison, these marks were found identical to Huawei’s well-known Subject Mark. Songling’s replication of the Subject Mark for dissimilar goods as a trademark misled the public into associating the infringing marks with Huawei’s well-known trademark, diluting its distinctiveness, or unfairly exploiting Huawei’s market reputation.

Third, Hongnian, a distributor for Songling’s “vavi Huawei in Chinese” branded products, sold goods infringing on the Subject Mark and used infringing marks such as “vavi Huawei Kitchen Appliances” and “vavi Huawei Smart Kitchen Appliances” on store signage and receipts. As a result, Hongnian’s acts constituted an infringement of Huawei’s trademark rights.

Last, Huawei alleged that Songling engaged in false advertising by promoting its “vavi Huawei ion Chinese” brand on its website and in product brochures with claims such as being one of “China’s Top 10 Kitchen Appliance Brands,” a “World Fortune 500 Kitchen and Bathroom Brand,” a “National Consumer Trustworthy Brand,” and a “Recommended Product for China’s Engineering Construction.” Songling failed to provide valid evidence to substantiate these claims, making false statements about product quality, sales performance, and honors received. These acts misled and deceived consumers, constituting false advertising and unfair competition.

2. The Beijing High Court applied strict scrutiny against parties that were found to have submitted deceptive evidence in the past

Recently, the Beijing High Court issued an administrative dispute concerning the review of the cancellation of the “Guiyu in Chinese GUIYU & Design” mark (“Disputed Mark”). The court ruled that the registration of the Disputed Mark owned by Guizhou Renhuai Pengyan Liquor Sales Co., Ltd. (Pengyan) should be revoked.

In this case, the two invoices submitted by Pengyan were verified on the National VAT Invoice Inspection Platform of the State Taxation Administration and both returned negative results. Additionally, Pengyan failed to provide the original invoices. The original invoice numbered 05101287 had an issue date of October 22, 2020, which differed from the date of January 22, 2020, shown in the copy submitted during the administrative stage. Given that Pengyan submitted deceptive evidence in this case, other evidence it provided was subject to stricter scrutiny. The Trademark License Usage Agreement submitted by Pengyan could not independently prove the use of the Disputed Mark and required corroboration with other evidence. Product photos were deemed self-created evidence. Contracts for specialized design services, design fee invoices, bank transfer receipts, related explanations, purchase orders and invoices signed by Pengyan and Lü Yajun were all dated outside the designated period.

Considering the evidence as a whole, there was no complete evidence chain to prove that the Disputed Mark had been genuinely, legally, and effectively used for commercial purposes on all the approved goods, such as “alcoholic beverages (except beer),” during the designated period. Consequently, the court ruled that the registration of the Disputed Mark should be revoked.

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Weekly China Brand Protection News

December 7, 2024

Copying “CHARLES & KEITH” Bag Logos and Designs Constitutes Trademark Infringement and Unfair Competition

Basic Facts of the Case

Charles & Keith International Pte. Ltd. (“Charles & Keith Singapore”) entered the Chinese market in 2010. Charles & Keith Singapore owns trademarks reg. no. 3216114, reg. no. 18842791, and reg. no. G1070666 (“Cited Marks”), authorized for use in Class 18 for goods such as handbags. Shanghai Charles & Keith Trading Co., Ltd. (“Shanghai Charles & Keith”) was authorized by Charles & Keith Singapore to use the Cited Marks, manage and maintain the “CHARLES & KEITH” brand, and independently handle infringement actions, including litigation and claims for compensation.

Shanghai Charles & Keith discovered that Charles Clay Brand Operation Management (Guangzhou) Co., Ltd. (“Charles Clay”) used a mark similar to the Cited Marks, “CHERMAS & KAETH” (“Disputed Mark”), to produce and sell handbags and other products. Charles Clay also allowed franchisees to use the accused mark and extensively imitated the bag designs of Shanghai Charles & Keith. Chengdu Ruichiyang Trading Co., Ltd. (“Ruichiyang”) was a retailer of the accused infringing products, which were displayed and sold through online and offline channels. Shanghai Charles & Keith filed a lawsuit with the Chengdu Intermediate Court, accusing Charles Clay, its financial staff Huang, Ruichiyang, and Ruichiyang’s sole shareholder Liu of trademark infringement and unfair competition. They requested that the four defendants cease the infringement, eliminate its effects, and jointly compensate CNY 5 million (USD 686,500) for economic losses and reasonable expenses.

The court tried the case and made the following determinations on the key issues:

1. Whether Charles Clay and Ruichiyang’s actions constituted trademark infringement

In this case, Charles Clay argued that its use of the Disputed Mark on the alleged infringing products was authorized by a legitimate third party and that it was permitted to use the registered trademark “CHERMAS & KAETH” reg. no. 31256011 for Class 18 products, without malicious intent. Charles Clay further claimed that the dispute over trademark rights with Shanghai Charles & Keith belong to a dispute between registered trademarks and should not be subject to judicial review. However, the court found that the trademark “CHERMAS & KAETH” reg. no. 31256011 had been declared invalid, and its exclusive rights as a registered trademark no longer existed. Therefore, Charles Clay did not have the corresponding rights to use a valid registered trademark. The court held that the disputed matter fell within the scope of judicial review for trademark infringement. It found Charles Clay’s claims invalid.

The court further ruled that Charles Clay and Ruichiyang had used the Disputed Mark “CHERMAS & KAETH” in their business activities in a manner that served to identify the source of goods, constituting trademark use. The accused products and the goods covered by the Cited Marks were of the same type. Although the Disputed Mark differed in certain letters from the Cited Marks, their letter count, overall structure, font design, and use of the “&” symbol in the same position were similar. Considering that the Disputed Mark had no fixed meaning and that the Cited Marks were distinctive and well-known, the use of the Disputed Mark on the alleged infringing products was likely to confuse or mislead the public about the origin of the goods. The court found that the Disputed Mark “CHERMAS & KAETH” was similar to the Cited Marks. Additionally, Charles Clay, as an industry competitor, was unlikely to be unaware of the Cited Marks. Its extensive use of similar marks while selling similar products demonstrated a clear intent to exploit the goodwill of the Cited Marks. Therefore, the court concluded that Charles Clay’s production and sale of the alleged infringing products and its use of the Disputed Mark without authorization from Shanghai Charles & Keith constituted an infringement of the exclusive rights to the Cited Marks. Ruichiyang’s use and sale of products bearing the accused mark also constituted infringement.

2. Whether Charles Clay’s actions constituted unfair competition

The court noted that while Shanghai Charles & Keith did not provide evidence proving that a specific bag design was original or protected by exclusive rights, the overall series of bag designs created through design and marketing efforts conferred a competitive advantage. Such designs could qualify as competitive interests protected under the Anti-Unfair Competition Law. Charles Clay, as an industry competitor, objectively imitated the overall designs of Shanghai Charles & Keith’s bags. Subjectively, it aimed to leverage the image and characteristics of the “CHARLES & KEITH” brand, as presented through its bag designs, to attract consumer attention and promote the alleged infringing products. Given Charles Clay’s deliberate attempts to confuse its products with the “CHARLES & KEITH” brand, the court determined that its actions were unfair. Charles Clay’s imitation of 54 bag designs violated principles of good faith and commercial ethics, disrupted market order, and harmed the legitimate rights and interests of Shanghai Charles & Keith and consumers.

3. Whether Huang’s actions constituted aiding infringement

As a financial staff member, Huang was responsible for ensuring that corporate transactions were conducted through corporate accounts. However, Huang allowed the use of her personal account to receive funds for Charles Clay’s operations, which exceeded the scope of her legitimate financial duties. The court found that Huang was aware of her role in facilitating Charles Clay’s infringing activities by allowing her account to be used, demonstrating subjective fault. Her actions provided significant assistance to Charles Clay, enabling the concealment of illicit profits derived from infringement. Thus, Huang was held liable for aiding infringement.

4. Whether Ruichiyang’s defense of “legitimate source” was valid

Based on Ruichiyang’s statements, the parties’ knowledge, and evidence, the court confirmed that Ruichiyang was a distributor for Charles Clay and sourced the accused products from Charles Clay. Furthermore, Charles Clay’s deliberate attempts to confuse its products with the “CHARLES & KEITH” brand were evident during negotiations with distributors. While distributors can claim exemption from economic compensation under “legitimate source” defenses, they remain responsible for reasonable expenses. Additionally, Ruichiyang was found to have used the Disputed Mark in its online and offline sales, necessitating liability for ceasing infringement and compensating losses.

5. Civil liability

The court supported Shanghai Charles & Keith’s request to cease infringement and issue public statements to eliminate adverse effects. For damages, the court considered factors such as the reputation of the Cited marks, product pricing, franchisee numbers, infringement duration and scale, subjective intent, and the expenses incurred by Shanghai Charles & Keith to stop the infringement. The court ordered the following: Charles Clay and Huang were jointly liable to compensate Shanghai Charles & Keith CNY 2 million (USD 274,500) for economic losses and reasonable expenses. Ruichiyang was liable to pay CNY 15,000 (USD2,000) for its trademark infringement. Liu was jointly liable for Ruichiyang’s compensation.

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Weekly China Brand Protection News

November 28, 2024

Casio GA-110 Series Watches Recognized as a Product with Certain Influential Trade Dress

Casio Computer Co., Ltd. (Casio) filed a lawsuit against Shenzhen Tesgao Watch Co., Ltd. and Guangzhou Teyuan Watch Co., Ltd., alleging unfair competition. Casio claimed that the trade dress of its GA-110 series watches constituted a “product with certain influence” under trade dress and provided evidence, including product comparison images of other watch brands, to demonstrate the distinctiveness of the GA-110’s design. Casio also submitted media reports, audit reports, and other documentation to prove the high reputation of the GA-110 trade dress.

After reviewing the case, the court found the following:

1. Regarding whether the trade dress of the GA-110 watches in question constitutes a product with certain influence protected by the Anti-Unfair Competition Law:

First, in this case, Casio provided substantial evidence regarding its continuous use, geographical reach, sales volume, or advertising efforts related to the GA-110 watches in question. According to the evidence, as early as 1983 and 1992, Casio had registered the trademarks “Casio in Chinese and CASIO” (Reg. No. 174465) and “G-SHOCK” (Reg. No. 584013), respectively, with the “Casio in Chinese and CASIO” trademark recognized as a well-known trademark for electronic watches. Additionally, data showed that in the 2021 Top 10 Electronic Watch Brands ranking, Casio in Chinese/CASIO ranked first. The GA-110 watches in question belong to the “G-SHOCK” series under Casio, which falls within the influence of the Casio and “G-SHOCK” brands. Casio also submitted evidence on the online and offline sales networks for the GA-110 watches in question, various news media reports and promotional materials on the GA-110 watches and related commercial activities, videos related to GA-110 watches posted on multiple video platforms, and advertising monitoring reports regarding the GA-110 watches issued by Meihua Net, demonstrating that Casio had conducted sustained and widespread promotion of the GA-110 series watches in question. Through more than a decade of meticulous operation and promotional maintenance by Casio, the GA-110 products in question achieved high sales in mainland China and substantial market recognition, sufficient to establish them as products with certain influence.

Second, Casio provided evidence identifying nine common design features of the GA-110 series watches, which can exist independently from their inherent nature. Furthermore, based on comparison images submitted by Casio of other branded watches in the market, it was evident that the design features in question were clearly distinct from the shapes of other watches and did not constitute generic designs in the watch category. Additionally, these designs were not intended to achieve a specific technical effect or give the product substantial value. Tesigao Watch Co. and Teyuan Watch Co. failed to submit evidence proving that others had used designs identical or similar to this trade dress on identical or similar products before Casio. Therefore, the trade dress of the GA-110 products in question possessed high originality and distinctiveness.

Third, through long-term promotion and use by Casio, the GA-110 watches in question achieved high popularity among relevant consumers. During the more than ten years of sales of the GA-110 series watches in question, apart from differences in color schemes, the main elements of the trade dress remained essentially the same. The overall style was consistent and featured stable design characteristics. Relevant consumers who saw the trade dress of these products could associate them with specific models of Casio watches, thereby serving the function of identifying the source of goods. Even after the patent protection period for the appearance design of the trade dress in question had expired, Casio continued selling the series through promotions such as celebrity endorsements and collaborations in 2020 and 2021. Several Weibo links with over ten thousand shares displayed the styles of the GA-110 series products in question. Casio’s efforts and investment in managing and maintaining the trade dress should be considered for their positive effects on maintaining the influence of this series. Additionally, according to audit reports submitted by Casio, between 2019 and 2020, the sales proportion of the GA-110 model in question within the G-SHOCK series and the entire Casio brand did not show significant decline, demonstrating that the market recognition and reputation of the GA-110 model in question were not diminished by the emergence of similar products in the industry and that the series continued to have sustained influence.

In summary, the court determined that the trade dress of the GA-110 watches in question, which is the basis for Casio’s claim, constituted a trade dress with certain influence protected by the Anti-Unfair Competition Law.

2. Regarding whether the actions of Tesigao Watch Co. constitute unfair competition:

Apart from adding color, the trade dress of the infringing products was essentially identical to the trade dress of Casio’s product with certain influence. Tesigao Watch Co. and Teyuan Watch Co. confirmed that the infringing products were 1:1 replicas of Casio’s trade dress design. Thus, the court determined that Tesigao Watch Co. and Teyuan Watch Co. had used Casio’s trade dress without authorization. The use of a trade dress by Tesigao Watch Co. on identical products, which was visually indistinguishable from Casio’s trade dress with certain influence, could mislead consumers into believing there was an economic connection between the infringing products and Casio, despite differences in price, quality, consumer class, and manufacturer name or trademark. According to evidence submitted by Casio in the second instance, some consumers could not distinguish between the infringing products and Casio’s branded products, causing actual confusion. Even if a small number of consumers could identify the brand as Tesigao Watch Co., the use of a trade dress highly similar to Casio’s would likely mislead consumers into associating the product with the GA-110 series trade dress, harming Casio’s market reputation and causing damage to its rights and interests. Therefore, the court ruled that the actions of Tesigao Watch Co. constituted unfair competition.

The court, taking into account factors such as the sales volume and prices of Tesigao Watch Co. and Teyuan Watch Co. through various channels, their involvement in fake reviews, their degree of subjective fault, the nature and circumstances of other infringing actions, and the reasonable expenses incurred by Casio for this case, determined that Tesigao Watch Co. and Teyuan Watch Co. should jointly compensate Casio for economic losses and reasonable expenses totaling RMB 3 million (USD410,000).

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Weekly China Brand Protection News

November 13, 2024

1. The “Calculation Method for Illegal Business Profits in Trademark Infringement Cases” Issued and Implemented

Recently, the China National Intellectual Property Administration (CNIPA) and the State Administration for Market Regulation (SAMR) jointly formulated and issued the “Calculation Method for Illegal Business Profits in Trademark Infringement Cases,” with some points as following:

Illegal business profits refer to the total value of infringing goods or the revenue generated from infringing activities.

The value of infringing goods that have already been sold is calculated based on the actual sale price. For unsold infringing goods, the value is calculated based on the average actual sale price of infringing goods identified. If the average actual sale price cannot be determined, the marked price of the infringing goods is used. If the actual sale price cannot be determined and there is no marked price, the market median price of the infringed goods during the infringement period is used.

For goods already manufactured but not yet affixed with infringing registered trademarks, if there is solid and sufficient evidence to prove that these goods would infringe on others’ exclusive trademark rights, their value shall be included in the illegal business profits.

Infringing goods given away for free that infringe on others’ exclusive trademark rights shall calculated based on the actual purchase price or production cost of the giveaway goods. If the actual purchase price or production cost of the giveaway goods cannot be determined, or if the giveaway goods are non-standard items, the illegal business profits is calculated based on the marked price or the market median price of the infringed goods.

If the party provides sufficient evidence proving that the sales volume of infringing goods has been inflated by fake sales methods, such as fake orders, these inflated sales figures are not included in the illegal business profits.

2. LIQUI MOLY Awarded RMB 1 million in Economic Damages and RMB 200,000 in Legal Expenses in the Appeal Judgment

The Zhejiang High Court recently issued a final ruling in the German LIQUI MOLY against Zhejiang Youguan Limo Auto Parts Co., Ltd., et al. (“Youguan Limo”) for trademark infringement and unfair competition case. 

On Whether the Accused Acts by Youguan Limo Constitute Trademark Infringement, the Court Held:

In this case, based on multiple notarized certificates and administrative penalty decisions submitted by LIQUI MOLY, it is sufficient to determine that Youguan Limo used the accused marks “,” “,” “,” “力魔,” “优冠力魔,” etc., on product names, physical goods, packaging, company and store signs, online store decor, product descriptions, and promotional materials, among other locations. These marks served to identify the product source, constituting trademark usage under the trademark law. Although LIQUI MOLY’s registered trademarks “力魔,” “德国力魔,” “LIQUI MOLY,” “” were designated on different classes of goods according to the CNIPA Goods & Services Classification, the designated goods of lubricants and motor oil under LIQUI MOLY marks and the oil filters used by Youguan Limo are complementary in automotive maintenance and are closely related in sales channels and target consumers, thus making them similar goods. Additionally, the accused mark “,” “力魔,” “优冠力魔” and cited marks “,” “力魔,” and “优冠力魔” were essentially identical, constituting identical trademarks. The foreign-language portions of the accused mark “,” along with its layout, sound, and appearance, were similar enough to the “LIQUI MOLY” trademark, despite minor differences in design, that it was likely to cause confusion about the source of the goods or a connection between the two parties, constituting similar trademarks. In summary, Youguan Limo used marks identical or similar to LIQUI MOLY’s registered trademarks on similar goods without authorization, which constitutes trademark infringement.

On Whether Lin and He Are Jointly Liable for Infringement, the Court Held:

Based on the findings, Lin and He, who are close relatives to the legal representative and major shareholder of Youguan Limo, are directly involved. Lin registered the “MOLY” and “” marks and authorized their use by Youguan Limo, and Youguan Limo used it improperly. Later, the trademarks were transferred to He. Additionally, He had been operating an individual business under the name “力魔” since 2014, selling filter products, registering copyright for “” as an art piece, and directly participating in the sale of infringing goods. Lin, He, and Youguan Limo repeatedly applied for “优冠力魔,” “LIQUI,” “MOLY,” ”LIQUI MOLY,” “,” “优冠力魔,”marks similar to LIQUI MOLY’s in Class 7 goods, which shows a clear intent to associate with the well-known LIQUI MOLY brand and cause consumer confusion. Each party’s actions led to the same harm against LIQUI MOLY, thus constituting joint liability.

On Whether Youguan Limo’s Actions Constitute Unfair Competition, the Court Held:

First, Youguan Limo’s use of “力魔” as its trade name could mislead consumers about the source of goods and disrupt market order, constituting unfair competition. Additionally, advertising statements in Youguan Limo’s 1688 online store, such as “the company obtained EU certifications of CE and IS016949 ” and “our products (LIQUI and MOLY) mainly supply Dongfeng Honda and Dongfeng Nissan,” were found to lack factual basis, constituting false advertising and unfair competition. Even if these claims were made by certain employee, they are considered acts of the company, which must bear liability.

On Compensation Amount:

Youguan Limo claimed that LIQUI MOLY had not actually used the “力魔,” “德国力魔,” or “LIQUI MOLY” trademarks, thus there was no actual loss. This Court held that evidence, such as promotional materials submitted by Youguan Limo, shows varying degrees of use of these trademarks. Additionally, there is no dispute among the parties regarding the actual use of the “” trademark, so the alleged trademark infringement has indeed caused actual loss to LIQUI MOLY, and Youguan Limo should bear compensation liability.

Regarding the compensation amount, since LIQUI MOLY has not provided evidence of actual loss due to the infringement or the profits gained by the infringer, nor is there a reasonable trademark licensing fee as a reference, statutory damages should be applied in this case. The court considered the following factors:

1. The cited marks have high distinctiveness and reputation, and the accused marks and company name significantly contribute to the products and corporate profits.

2. Lin, He, and Youguan Limo jointly committed trademark infringement, and Youguan Limo engaged in unfair competition.

3. Lin, He, and Youguan Limo knowingly cooperated in trademark infringement despite the reputation of the cited marks, with evident bad faith in leveraging LIQUI MOLY’s goodwill.

4. The infringement has persisted for a long period. Youguan Limo claimed it began production in March 2014, while Lin and He applied to register trademarks similar to LIQUI MOLY’s in as early as 2010 and 2011. The infringing products were widely sold, including online, offline, and for export, with high sales figures.

5. The infringing goods relate to vehicle and consumer safety.

6. The local Market Supervision Bureau has imposed fines on Youguan Limo totaling RMB 1,300,800 for trademark infringement and unfair competition against LIQUI MOLY.

7. In this case, LIQUI MOLY incurred high legal costs to prevent infringement, including attorney fees and multiple notarized evidence collections.

In conclusion, the court believes the original compensation amount should be increased and fully supports LIQUI MOLY’s claim of RMB 1,000,000 (USD 137,000) in economic losses and RMB 200,000 (USD 27,400) in reasonable expenses.

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 Brand Protection News

November 6, 2024

1. Huawei Successfully Protects its Phone Charger Based on “Influential Product Names and Packaging”

The Beijing IP Court made a second-instance ruling in the case of Dongguan Zhihong Electronics Technology Co., Ltd. (the appellant) against Huawei Terminal Co., Ltd. (the appellee) and the original defendant, Beijing JD 360 Degree E-commerce Co., Ltd., over unfair competition. The court ruled that Zhihong Electronics must immediately stop using product names and packaging that are identical or similar to Huawei’s “SuperCharge” and “超级快充 (SuperCharge in Chinese)” chargers. Zhihong Electronics is also ordered to halt the sale of the infringing products and destroy existing stock, as well as compensate Huawei for economic losses and reasonable expenses amounting to CNY 110,000 (USD 15,000).

The second-instance court found that Huawei began promoting its super fast charging mobile chargers in 2016. Through Huawei’s extensive and long-term marketing, the name “SuperCharge / SuperCharge in Chinese” and the distinct design elements—such as the specific size, white color, rounded corners, and an oval depression on one-third of the charger body—have gained significant recognition and influence. While the depressed design is not exclusive to Huawei, when combined with other elements, it still creates a distinctive feature that sets it apart from other chargers. Therefore, the court ruled that the “SuperCharge / SuperCharge in Chinese” name and its unique design qualify as product names and packaging with significant influence under Article 6 of the Anti-Unfair Competition Law.

Evidence in the case showed that Zhihong Electronics not only produced chargers with designs highly similar to Huawei’s, but also promised to sell products bearing the “Huawei,” “SuperCharge,” and “SuperCharge in Chinese” trademarks on its 1688 storefront. Such actions could easily confuse the public, constituting unfair competition as defined by Article 6, Section 1 of the Anti-Unfair Competition Law. Although Huawei’s purchase of infringing products from Zhihong Electronics’s supplier did not display the “SuperCharge” or “SuperCharge in Chinese” trademarks, the combined actions of promoting these products on 1688 led the court to conclude that Zhihong Electronics improperly used Huawei’s influential product names and packaging, which could mislead consumers.

Founded in 2020, Zhihong Electronics is primarily engaged in the development and sale of electronic products and accessories. As such, the company should have been aware of Huawei SuperCharge charger’s name and design. Despite this, Zhihong Electronics did not take steps to avoid infringing on Huawei’s trademarks and instead produced and sold highly similar chargers, engaging in unfair competition. While Zhihong Electronics argued that it was merely a processing agent and should not bear responsibility, the second-instance court ruled that the evidence presented in the appeal was insufficient to prove that the infringing products were commissioned from its supplier, and even if they were, Zhihong Electronics was still responsible for accepting the commission knowing that infringement was likely.

2. First Domestic Legally Binding Cross-Border E-Commerce Unfair Competition Case Based On “Fake Reviews and Manipulation”

The Shenzhen Intermediate Court has issued a second-instance judgment in a case involving Amazon.com Inc. and Amazon.com Services LLC (“Amazon”) against two defendants over unfair competition. The court ruled that the two defendants must issue a public statement for 15 consecutive days to remove the negative impact of their unfair competition on Amazon, and they are required to compensate Amazon for economic losses and reasonable expenses totaling CNY 800,000 (USD 110,000).

Amazon claimed that the unfair competition conducted by the two defendants included services such as “Add to Cart | Wish List,” “Ranking Optimization,” “Pull-down Promotions,” “Direct Reviews,” “Associated Videos,” “Like Tasks,” “Q&A Questions,” “Q&A Answers + Video,” “Q&A Polls,” “Merging International Reviews,” “Flash Sale Control,” and “Deleting Negative Reviews.” Amazon argued that these actions disrupted the market competition order in the cross-border e-commerce industry, harmed the fair competition ecosystem that Amazon had worked hard to build, and infringed upon consumers’ rights to be informed and make choices.

The second-instance court found that evidence showed that the contested actions were carried out using fake Amazon buyer accounts. The defendants acknowledged this, and as such, the court ruled that these actions, while conducted through Amazon buyer accounts, did not reflect the genuine intent of Amazon customers. Instead, they constituted false transactions or actions based on false representations related to the transaction. The results of these actions were designed to assist Amazon sellers in creating false or misleading commercial promotions. Therefore, the behaviors conducted on the defendants’ websites were deemed to be false advertising.

As for the “Merging International Reviews” practice, Amazon’s platform guidelines explicitly state that reviews may only be merged if the products are substantially identical and belong to the same category or variation. However, the notarized evidence in this case showed that the contested website provided examples of merging reviews from different products with similar appearances, and did not follow Amazon’s rules when providing this service. This action helped and encouraged Amazon sellers to fabricate related product reviews, and the merged reviews, which came from visually similar products, were likely to mislead consumers into misidentifying the reviewed product. As such, the court also determined that the “Merging International Reviews” practice constituted false advertising.

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 Brand Protection News

October 31, 2024

“Crown Cookies in Chinese” wins a lawsuit, “Blue Can Cookies in Chinese” was found liable for false advertising and commercial defamation

On June 28, 2024, the Beijing Haidian District Court issued a first-instance judgment in an unfair competition case involving the plaintiffs Danish Speciality Foods CPHDK ApS (“Danish Company”) and Maida Food (Shanghai) Co., Ltd. (“Maida”), and the defendants Kelsen Group A/S (“Kelsen”), Kjeldsens Limited (“Blue Can Hong Kong”), Blue Can (Shanghai) Management Co., Ltd. (“Blue Can Shanghai”), and Shanghai Lizhi Industrial Co., Ltd. (“Lizhi”). The court ruled that all defendants must immediately cease their false advertising and commercial defamation activities. They are required to publish a statement on their official website and official Weibo for three consecutive days to eliminate the damage caused to the reputation of the plaintiffs’ “Crown Danish Cookies in Chinese” (Danisa Butter Cookies) products. Additionally, they must compensate the plaintiffs for economic losses and reasonable expenses totaling CNY 550,000 (USD77,000).

The plaintiff, Danish Company, is the producer of Crown Danish Cookies, while Maida is the distributor of Crown Cookies in mainland China. Crown Cookies has led sales in its category in mainland China for many years and is considered a well-known product. The plaintiffs found that Kelsen, Blue Can Hong Kong, Blue Can Shanghai, and Lizhi used a lot of “factually incorrect” promotional information on the packaging of their Danish Blue Can Cookies (Kjeldsens Butter Cookies), as well as on their jointly operated official website, official Weibo, official WeChat account, Tmall, and JD official flagship stores, which could easily mislead consumers and constitute false advertising. Furthermore, the defendants made statements that defamed “Crown Danish Cookies,” harming the product’s reputation and commercial credibility, which amounted to commercial defamation.

Danisa Butter Cookies

Kjeldsens Butter Cookies

The first-instance court confirmed that expressions such as “the most advanced equipment, producing the highest quality products,” “the world’s largest modern cookie production line,” “the best choice for gifts,” “the perfect partner for gatherings,” “impressive,” “royal classic,” and “absolutely noble” used superlative and absolute promotional language, which could lead the public into mistakenly believing that the quality of Danish Blue Can Cookies is superior to other products, constituting false advertising. However, phrases like “the best choice for gifts” and “the perfect partner for gatherings” are common expressions in commercial advertising and do not constitute false advertising.

Regarding the statements “Danish Blue Can Cookies is the only high-quality Danish butter cookie brand authorized by the Danish royal family to use the Danish crown logo and royal certification on its packaging,” “Danish Blue Can Cookies is the only cookie brand honored with the royal designation,” and “the only cookie brand certified by the Danish royal family,” the facts established in this case reveal that there is another brand, BISCA, in the Chinese market that has also obtained royal certification from the Danish royal family. Therefore, the above statements constitute false information that does not align with objective facts, which could mislead the public into believing that the quality of Danish Blue Can Cookies is superior to other similar products, thus enhancing its competitive advantage and obtaining trade opportunities, damaging the business interests of the plaintiffs as direct competitors, constituting false advertising.

Regarding the statement “Since its inception, Danish Blue Can has accompanied generations of the Danish royal family,” it was noted that Danish Blue Can Cookies received the current Danish royal family’s royal certification in 2009. The evidence submitted by the three defendants only indicates that royal family members have tasted their products, awarded prizes, and visited the factory. Given the prominent promotion of the royal certification, the above statement could easily lead the public into mistakenly believing that Danish Blue Can Cookies have received royal certification from multiple generations of the Danish royal family, thus mistakenly believing that Danish Blue Can Cookies are of exceptional quality, harming the business interests of the plaintiffs as direct competitors, constituting false advertising.

Additionally, the contested content featured images comparing Blue Can Cookies with the plaintiffs’ Crown Cookies, using expressions like “under the guise of…” “taking advantage of the confusion” and “deceiving consumers,” which could easily mislead consumers into believing that the plaintiffs’ Crown Cookies intentionally use similar packaging to deceive consumers, thereby damaging the reputation of the plaintiffs’ products and constituting commercial defamation.

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Weekly China Brand Protection News

October 24, 2024

1. “Xiaomi” was recognized as a well-known mark and given cross-class protection on beverage related goods

Recently, the Chongqing High Court made a final ruling in the trademark infringement and unfair competition lawsuit between Xiaomi Technology Co., Ltd. and Beijing Qingquan Chushan Beverage Co., Ltd., Tianjin Qiulin Gewasi Food Technology Co., Ltd., among other defendants. The court recognized that Xiaomi’s “Xiaomi in Chinese” mark with reg. no. 8228211 and “MI” mark with reg. no. 8911270 had gained significant recognition among the relevant public in China before August 2018, qualifying them as well-known trademarks. The court also found that the defendants had infringed on Xiaomi’s trademarks and engaged in unfair competition, ordering them to pay Xiaomi CNY 5 million (USD 701,000) in damages.

Cited Marks

First, the court found that the evidence submitted by Xiaomi, along with prior rulings, demonstrated that the “Xiaomi in Chinese” trademark, registered in April 2011, had been continuously used. Xiaomi and its affiliates invested substantial funds in promoting the Xiaomi brand, earning numerous honors and gaining various forms of legal protection, including being recognized as a well-known trademark by several courts, such as the Beijing IP Court and the Jiangsu High Court. Therefore, the court ruled that the trademark had become widely known among the public in China by August 2018, recognized it as a well-known trademark.

Second, the defendants used the “Xiaomi Cola in Chinese” and “Micola” trademarks on beverage products. (1) On the allegedly infringing product, “Xiaomi Cola in Chinese” took up a large portion of the bottle’s surface, while the words “Qingquan Chushan in Chinese” were small and hidden in the background. From a typical consumer’s viewpoint, the “Xiaomi Cola in Chinese” label would be noticed first, making it difficult to identify the “Qingquan Chushan in Chinese” name. Given that the Xiaomi in Chinese trademark is highly distinctive and well-known, the public closely associates Xiaomi with its electronics products. The defendant’s acts could mislead consumers into thinking there is an association between Xiaomi and the defendants, thus weakening the link between Xiaomi’s trademark and its products, such as phones. This constitutes an infringement of Xiaomi’s well-known trademark rights. (2) The defendants also registered the “Micola” trademark, composed of “Mi” and “cola.” However, this mark had been declared invalid in administrative proceedings. The term “cola” is a generic name for the product, lacking distinctiveness, leaving “Mi” as the significant part of the mark. This closely mimics Xiaomi’s registered “MI” trademark. The defendants also used a similar color scheme to Xiaomi’s in their branding. This use was seen as exploiting the reputation of Xiaomi’s well-known “MI” trademark, misleading the public and harming Xiaomi’s interests, thus constituting trademark infringement.

Last, the defendants used promotional phrases like “Xiaomi phones are born for enthusiasts, today, Xiaomi Cola is born for fermentation” on product packaging, official Weibo, and WeChat accounts, as well as mimicked Xiaomi’s orange and white color scheme in their marketing. Their full-scale imitation created a blurred association between their products and Xiaomi’s, misleading consumers and violating the principle of good faith. This constitutes unfair competition through misleading commercial advertising.

2. The China Supreme Court reversed the ruling in a retrial! Despite applying for a large number of trademarks, evidence proves the disputed trademark has been continuously and extensively used on Class 34 products

Recently, the China Supreme Court (“SPC”) issued a retrial judgment in the administrative dispute regarding the invalidation of the “Zhaocai Cat in Chinese” mark. The court ruled that the trademark owned by Shaanxi Zhongyan Industrial Co., Ltd. (“Shaanxi Zhongyan”) did not constitute the “acquisition of registration through other improper means” specified in Article 44, Paragraph 1 of the Trademark Law, and upheld its registration.

The main issue in the case was whether the registration of the disputed mark violated Article 44, Paragraph 1 of the Trademark Law. The second instance court held that around the time of the trademark application, Shaanxi Zhongyan had applied for more than 300 trademarks across multiple classes of goods and services, including “Zhaocai Jinbao” and “Fu Zhaocai Jinbao.” The number of trademarks applied for significantly exceeded the company’s normal production and operational needs, and Shaanxi Zhongyan did not provide a reasonable explanation for registering the disputed mark or other trademarks. Therefore, the court found that these acts disturbed the normal trademark registration order, harmed fair competition in the market, violated public order and good customs, and damaged public interest.

 The SPC’s retrial judgment concluded that when a trademark applicant applies for a large number of trademarks, it is inappropriate to determine that the applicant obtained registration through improper means based solely on the quantity. Instead, the actual production and business situation should be considered to assess whether the trademarks were applied for with the intent of genuine use and whether the application was reasonable and legitimate. In this case, between 2015 and November 2021, Shaanxi Zhongyan applied for 155 trademarks, mainly for use on Class 34 tobacco products and related promotional items or services. Shaanxi Zhongyan provided evidence proving that these trademarks had been put into commercial use, and their registration met the company’s actual production and operational needs, showing reasonableness and legitimacy. In addition to the disputed mark, Shaanxi Zhongyan also registered the “Zhaocai Cat in Chinese” graphic and word trademarks in Classes 9, 11, and 16, which were used for tobacco products and related items or services. The evidence presented was sufficient to demonstrate that the large number of trademarks, including the disputed one, did not exceed the company’s actual operational needs and had been used extensively on approved goods over time. Therefore, the registration of the disputed trademark did not violate Article 44, Paragraph 1 of the 2013 Trademark Law.

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Weekly China Brand Protection News

October 18, 2024

1. Advertising products as “Korean Version North Face Apparel” without authorization constitutes trademark infringement, CNY 360,000 compensation ordered

The plaintiff, The North Face Apparel Co., Ltd. (“The North Face”), holds the “” mark with reg. no. 2018929, the “” mark with reg. no. 5357180, and the “Bei Mian in Chinese” mark with reg. no. 2018921 in Class 25. The North Face discovered that the defendant, Hangzhou Yuhang Qianniuxing Clothing Business Department (“Qianniuxing”), and its actual operator, Huang, were promoting and selling clothing bearing the “” and “” logos through a Douyin store called “Qianniuxing.” The store advertised these clothes as “Korean Version Bei Mian (North Face in Chinese) 1996 Down Jacket” on the product detail page and promoted the alleged infringing products through short videos and live-stream sales. The North Face filed a lawsuit against the two defendants claiming that their actions infringed its trademark rights, demanding the cessation of infringement and compensation for economic losses and reasonable expenses totaling CNY 700,000 (USD 98,250).

The key issues in this case are as follows:

(1) Did the defendants’ actions infringe The North Face’s trademark rights?

The court found that the accused products prominently displayed the “” and “” logos, and the sales link titles prominently featured the words “Bei Mian.” These uses served to identify the origin of the goods, qualifying as trademark usage. The alleged infringing products were down jackets and T-shirts, which fall under Class 25, the same category as The North Face’s registered trademarks. The accused logos were identical to The North Face’s registered trademarks. Given that The North Face’s trademarks have achieved high fame and distinctiveness through extensive use, the accused logos and The North Face’s registered trademarks were deemed identical and used on the same class of goods, likely causing consumer confusion. Therefore, the defendants’ unauthorized sale of the accused products infringed upon The North Face’s trademark rights.

(2) Can the defendant’s parallel import defense be upheld?

The court determined that the defendant, Qianniuxing, did not provide evidence that the trademarks on the accused products were owned by the same rights holder in both China and South Korea, nor did they prove the origin of the products or demonstrate that the accused goods had undergone proper customs supervision. The available evidence was insufficient to establish that the accused goods qualified as parallel imports. Consequently, the parallel import defense was dismissed. Furthermore, based on the facts of this case, the court did not recognize the exhaustion of trademark rights, dismissing the defense of trademark exhaustion raised by Qianniuxing.

(3) Can the defendant’s defense of legitimate source be upheld?

Although Qianniuxing submitted WeChat chat records and transfer records, it failed to provide evidence of the WeChat user’s real identity, and its authenticity could not be confirmed. Moreover, there was no corresponding relationship established between the chat records and the accused products. The existing evidence was insufficient to prove that the accused products were obtained through legal means and lawfully imported into China for sale. Therefore, the court ruled that the defense of legitimate source could not be upheld.

(4) If trademark infringement is established, what liability should the two defendants bear?

The infringement actions of Qianniuxing constituted trademark infringement, and it should bear corresponding liability. Huang, as the actual operator of the Douyin store involved, was jointly liable for the infringement with Qianniuxing. According to Article 56 of the Civil Code, the debts of individual businesses should be borne by the business operator using their personal assets. Therefore, Huang should bear the liability of Qianniuxing in this case.

The court supported The North Face’s claims to stop the infringing behavior and destroy the inventory of infringing products. Regarding the amount of compensation, the court, considering factors such as the sales volume and revenue of the infringing products, the duration of the infringement, the small scale of the individual business, the defendant’s low subjective malicious intent, the high fame and distinctiveness of The North Face’s trademarks, and the reasonable expenses incurred by The North Face in protecting its rights, determined that the two defendants should jointly compensate The North Face for economic losses and reasonable expenses totaling CNY 360,000 (USD  50,500).

2. The assessment of trademark similarity involving geographical names should primarily focus on comparing the non-geographical parts

Disputed Marks	Cited Marks
Reg. No. 39521915 Registrant: Deng	Reg. Nos. 22772816, 37274477 Registrant: Chen

The Beijing High Court recently concluded an administrative dispute regarding the invalidation of the “Shibati Dengdengmian” trademark between the appellant, the CNIPA, appellant Chen, and appellee Deng. The court rejected the appeal and upheld the original judgment.

The key issue in the case was whether the Disputed Mark and the two Cited Marks constituted similar trademarks for identical or similar services. After review, the court determined that the Disputed Mark is a purely text-based trademark, “Shibati Dengdengmian,” while the two Cited Marks consist of the words “Shibati Wooden Barrel.” Although both contain “Shibati,” the evidence showed that “Shibati” refers to an old street name in Chongqing’s Yuzhong District, symbolizing old Chongqing. Compared to the textual components “Dengdengmian” in the Disputed Mark and “Wooden Barrel” in the Cited Marks, “Shibati” is less distinctive. Therefore, the distinctive elements, “Dengdengmian” and “Wooden Barrel,” differ significantly in composition, meaning, and pronunciation. As such, the Disputed mark, when used for services such as “restaurants, dining establishments, etc.” can be distinguished from the Cited Marks and is unlikely to cause confusion or misidentification among the public regarding the origin of the services. The court upheld the first-instance ruling, which found that the use of the Disputed Mark for “restaurants, dining establishments, etc.” did not violate Articles 30 or 31 of the Trademark Law.

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Weekly China Brand Protection News

October 12, 2024

The application for customs protection measures based on intellectual property does not constitute unfair competition

Aidacheng Footwear Co., Ltd. (“Aidacheng”) owns the “” mark with reg. no. 51764426 and the “” mark with reg. no. 65218736, and several other registrations. It has obtained customs recordation for several of its trademarks. On May 25, 2022, Xiamen Jialianheng Import and Export Co., Ltd. (“Jialianheng”) declared the export of baby clothing and other goods to Mexico at Beilun Customs. After inspection, Beilun Customs believed that the goods were suspected of infringing Aidacheng’s related trademarks filed with customs and issued a “Notice of Confirmation of Intellectual Property Status” to Aidacheng. Subsequently, Aidacheng requested Beilun Customs to detain the goods. However, after investigation, Beilun Customs determined that it could not confirm whether the goods infringed Aidacheng’s registered trademarks recorded with the General Administration of Customs.

Following this, Aidacheng proactively contacted Jialianheng, asking them to pay licensing fees and then notify customs to release the detained goods. The two parties failed to reach an agreement, and Aidacheng subsequently filed a trademark infringement lawsuit in court. Upon trial, the court determined that Jialianheng’s processing and export of original equipment manufacturer goods did not constitute trademark infringement. Jialianheng then sued Aidacheng for unfair competition, alleging that Aidacheng’s abuse of customs protection for intellectual property rights amounted to unfair competition.

Upon trial, the court found the following:

Firstly, Aidacheng lawfully obtained the disputed trademarks, which are still within their protection period and are legally protected. Although Jialianheng submitted foreign registration information for trademarks that were somewhat similar to the disputed trademarks, not all of the foreign trademarks were registered earlier than Aidacheng’s trademarks. This evidence alone was insufficient to prove that Aidacheng maliciously registered the trademarks.

Second, the rights holder is entitled to protect its legal rights through lawful means. As the intellectual property rights holder, Aidacheng had the right to apply for intellectual property customs recordation of its trademarks with the General Administration of Customs, and the subsequent handling was decided by customs, not Aidacheng’s market behavior.

Last, Aidacheng’s application to detain the goods based on the customs notification and its participation in subsequent litigation were lawful exercises of its rights as the trademarks right holder, with a legitimate legal basis. Throughout the process, Aidacheng exercised caution in exercising its rights, and there was no intention to abuse the customs protection measures for intellectual property rights. Objectively, there was no fabrication of information or dissemination of false or misleading information. After customs determined that it could not confirm whether the goods infringed the trademarks, Aidacheng did not apply for measures such as stopping the infringement or property preservation, and Jialianheng eventually retrieved the goods on its own. Subsequently, Aidacheng promptly filed a trademark infringement lawsuit in court, and after the trademarks were invalidated, it timely applied to cancel the customs recordation.

In summary, Aidacheng’s application for intellectual property customs recordation was lawful, and its request for customs detention had a legitimate legal basis. Aidacheng exercised due diligence and caution during the process, and there was no abuse of the customs protection measures for intellectual property. Therefore, its actions did not constitute unfair competition.

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Weekly China Brand Protection News

September 24, 2024

Schneider Electric won a CNY 106 million compensation in a trademark infringement and unfair competition lawsuit

Recently, the Supreme People’s Court concluded the second instance of the dispute between Schneider Electric (China) Co., Ltd. and Zhenjiang Shinaide Electric Co., Ltd. (“Zhenjiang Shinaide”), Shinaide Busbar Jiangsu Co., Ltd. (“Shinaide Busbar”), and others regarding trademark infringement and unfair competition, upholding the Zhejiang High Court’s first-instance judgment.

The main issues of the dispute are whether Schneider’s lawsuit exceeded the maximum statute of limitations, whether Zhenjiang Shinaide and others were liable for trademark infringement and unfair competition, and the calculation of the compensation amount. The Supreme Court found as follows:

1. Statute of Limitations

Zhenjiang Shinaide argued that their company was established in 1999, and since Schneider filed its lawsuit in 2020, more than 20 years had passed. Therefore, under the Civil Code’s 20-year maximum statute of limitations, Schneider’s rights should not be protected. However, the court held that while Zhenjiang Shinaide was established in 1999, the company has existed until now without changing its name. The alleged infringement continued up to the point when Schneider filed its lawsuit. Moreover, Zhenjiang Shinaide’s registration and use of its company name do not cover the alleged trademark infringement activities. Therefore, Schneider’s lawsuit was not beyond the maximum statute of limitations. The court rejected Zhenjiang Shinaide’s defense.

2. Trademark Infringement and Unfair Competition

Regarding the alleged infringement involving Zhenjiang Shinaide and others using the “” and “” marks on product labels, product manuals displayed on their 1688 online store, and the website www.zj-schneider.com, the court found that the accused “Schneider” mark was prominently used on the products, as well as the online store and website, serving to identify the source of the goods. This qualifies as trademark use. The goods in question were either identical or similar to those covered by Schneider’s trademarks. These trademarks had received well-known mark protection multiple times and have significant fame and influence. The use of a combination of other Chinese with “Schneider in Chinese (shinaide)” in “Zhenjiang Shinaide Electric” and “Shinaide Busbar” was likely to cause confusion among the relevant public.

Regarding the alleged infringement involving Zhenjiang Shinaide using marks such as “Schneider in Chinese,” “Zhenjiang Shinaide in Chinese,” “Zhenjiang Shinaide Electric in Chinese,” “Shinaide Electric in Chinese,” “Zhenjiang Shinaide Busbar in Chinese,” and “Shinaide Busbar in Chinese” on product labels, certificates, websites like www.zj-schneider.com and suoude.net, WeChat public accounts, WeChat mini-programs, and their 1688 online store, Zhenjiang Shinaide argued that these were lawful uses of its corporate name and did not constitute infringement. The court, however, found that Zhenjiang Shinaide and Shinaide Busbar had not been using their full company names properly but had instead prominently used the accused marks on their products, certificates, websites, and online store. Specifically, the 1688 store clearly listed “Zhenjiang Shinaide in Chinese” in the “brand” section, serving to identify the goods’ source, thus constituting trademark use. The goods in question were similar or identical to those covered by Schneider’s trademark. As the primary identifying feature was “Shinaide in Chinese,” which closely resembled Schneider’s trademarks, it was likely to cause confusion among the public.

Regarding the alleged infringement where Zhenjiang Shinaide registered “zj-schneider.com” as a domain name and conducted e-commerce transactions through it, the court ruled that the core part of the domain name, “schneider,” was identical to the key part of Schneider’s registered trademark (international registration no. 715396). Schneider’s trademark was well-known and distinctive, and Zhenjiang Schinaide’s registration of a similar domain name was likely to cause public confusion. Moreover, since the website provided detailed product catalogs and introductions, along with sections for “feedback” and “contact information,” the court concluded that it was used for e-commerce transactions. Based on these reasons, the court held that Zhenjiang Shinaide’s registration and use of the “zj-schneider.com” domain name infringed the exclusive rights of Schneider’s “” trademark (with reg. no. G715396).

Additionally, Zhenjiang Shinaide and Shinaide Busbar’s use of “Shinaide in Chinese” as part of their company names also constituted unfair competition.

3. Calculation of Compensation Amount

Regarding the determination of the compensation period, Schneider claimed compensation for the profits gained from the infringement by Zhenjiang Shinaide and Shinaide Busbar from 2010 to March 2022. The defendants argued that Schneider had long been aware of Zhenjiang Shinaide’s activities but waited until now to sue, exceeding the three-year statute of limitations. The court found that evidence submitted by Schneider showed that by 2016, they were aware of the alleged infringement by Zhenjiang Shinaide and Shinaide Busbar. Since Schneider knew about the infringement as early as 2016 but only filed the lawsuit in May 2020, it exceeded the three-year statute of limitations. Therefore, compensation should be calculated retroactively from May 2020 for a period of three years. As for the infringement after Schneider filed the lawsuit, the evidence demonstrated that Zhenjiang Shinaide and Shinaide Busbar continued their infringing actions until March 2022, prior to the court hearing. Schneider’s lawsuit interrupted the statute of limitations, and thus, the claim for the defendant’s post-filing infringement had not exceeded the limitation period. Therefore, compensation should be calculated from June 2017 to March 2022.

Regarding the basis and amount for calculating punitive damages, the financial evidence obtained by Schneider through a court order clearly indicated the annual revenue, costs, and taxes and surcharges of Zhenjiang Schneider. The compensation base can be directly determined from this financial data, where sales profit = revenue – costs – taxes and surcharges.

For determining the multiplier of punitive damages, the court considered the subjective fault and the severity of the infringement by Zhenjiang Shinaide and found it appropriate to support Schneider’s request. The punitive damages multiplier and the base amount should be calculated separately. Thus, the final compensation to be borne by the defendants would be the sum of the base compensation amount and the punitive damages. The court decided to apply a multiplier of 2 for calculating the punitive damages.

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