Weekly China Brand Protection News

April 30, 2024

1. The China Supreme Court releases the 2023 Top 10 IP Cases

On April 22, the China Supreme  Court released the 2023 Top 10 IP Cases and 50 Typical IP Cases. Among these cases, those involving trademark infringement and unfair competition are as follows:

1. The “Siemens in Chinese” trademark infringement and unfair competition disputes

SIEMENS AKTIENGESELLSCHAFT and Siemens (China) Co., Ltd. (“Siemens”) are the rights holders of the “Siemens in Chinese” and “SIEMENS” trademarks. The two trademarks are registered on washing machines and other goods. After long-term use and vigorous promotion by Siemens, these two trademarks have obtained high reputation. Ningbo Qimou Electric Co., Ltd. (“Qimou”) and others registered the name “Shanghai Siemens Electric Co., Ltd.” overseas and extensively used it as a commercial logo on the washing machine products, packaging, and related promotional activities. Siemens claimed that the acts of Qimou and others infringed on its registered trademark rights and constituted unfair competition. The first instance court found that the alleged infringement by Qimou and others did not constitute trademark infringement, but constituted unfair competition. The court held that Qimou and others should immediately stop the infringement and compensate for economic losses of RMB 100 million (USD 138 million) and reasonable expenses of RMB 163,000 (USD 22,500). Qimou appealed. In the second instance, the China Supreme  Court found that Qimou and others knew the popularity of the “Siemens in Chinese” and “SIEMENS” trademarks and deliberately used “Shanghai Siemens Electric Co., Ltd.” on washing machine products, causing confusion among consumers and constituted trademark infringement. The use of this logo on packaging and promotional activities also constituted unfair competition. QImou shall bear liability for compensation. Regarding the amount of compensation, although it was difficult to determine Siemens’ actual losses or Qimou’s infringement profits from the evidence, it was sufficient to determine that Qimou’s infringement profits have clearly exceeded the maximum statutory compensation of RMB 5 million. Given that Qimou refused to provide financial information related to the infringement, which has constituted evidence impediment, the first instance court referenced to media reports that Qimou’s annual sales totaled RMB 1.5 billion (USD 207 million), and based on the relevant facts of the case that the sales ratio of the accused infringing products was one-fifteenth in determining the compensation to be RMB 100 million was not wrong. The China Supreme  Court dismissed the appeal and affirmed the original judgment.

2. The “Lafite in Chinese” trademark infringement and unfair competition disputes

Chateau Lafite Rothschild (“Rothschild”) is the right holder of the “LAFITE” trademark and the “CHATEAU LAFITE ROTHSCHILD” trademark (collectively as “Cited Marks”). The Cited Marks are registered on alcoholic beverage goods. The Cited Marks obtained high reputation after long-term use. “LAFITE” and “Lafite in Chinese” have established a solid association. On April 1, 2005, Nanjing Jin Mou Wine Co., Ltd. (“Jin Mou”) filed for the “Lafite Chateau in Chinese” mark on wine and other goods. Since then, Jin Mou and others have used labels such as “Lafite Manor in Chinese” and “LAFEI MANOR” in the process of producing, importing, and selling wine, and promoted them on their websites and transaction documents. On December 23, 2016, the China Supreme  Court made a retrial judgment and supported the CNIPA’s canceling of Jin Mou’s “Lafite Chateau in Chinese” trademark. Rothschild then sued seven defendants including Jin Mou to the court. The first instance court found that the seven defendants’ acts constituted trademark infringement and unfair competition, and ordered them to stop infringement and applied punitive damages. Jin Mou and others appealed. In the second instance, the China Supreme Court found that Jin Mou and others had bad faith intention to take advantage of the Cited Marks when applying for registration and using the “Chateau Lafite in Chinese” trademark, and they failed to show good faith and trustworthy interests in using the said mark. Their use of “Chateau Lafite in Chinese,” and “LAFEI MANOR” logo constituted trademark infringement, and exaggerating the historical heritage and popularity of the “Lafite Manor in Chinese” wine in publicity constituted false publication. Jin Mou and others obviously acted in bad faith and the infringement was serious. According to Rothschild’s request, punitive damages were applied against Jin Mou and others, and a total of RMB 79.17 million (USD 10.9 million) compensation in economic losses and reasonable expenses were ordered.

2. The Beijing High Court released the Top 10 Judicial IP Protection Cases and the Top 10 Judicial Trademark Authorization and Confirmation Cases in 2023

On April 25, the Beijing High Court released the Top 10 Judicial IP Protection Cases and the Top 10 Judicial Trademark Authorization and Confirmation Cases in 2023. In 2023, Beijing courts applied punitive damages in a total of 26 IP infringement. A significant year-on-year increase.

The trademark infringement and unfair competition disputes involving the “Jegere in Chinese” brand

In the trademark infringement and unfair competition disputes involving “all-round” imitation of “Jagermeister” beer, the defendant imitated the “Jagermeister” mark from liqueur bottle labels, bottle caps, website promotions and other aspects, which was considered an “all-round” brand imitation. In this case, the court applied punitive damages and ordered the defendant to pay RMB 10 million (USD 1.38 million) in compensation.

Mast-Jagermeister SE (“Mast-Jagermeister”) is the owner of registered trademarks such as “Jägermeister in Chinese” and “JÄGERMEISTER.” The Sheng Luo La Liquor Company (“Sheng Luo La”) used logos such as “Jager Haguleisi in Chinese” and Deer Head logos on labels, bottle caps, and official websites of the liquors it produced and sold. The packaging and decoration were the same or similar, and the words “German Master Group Co., Ltd. In Chinese” and other words are used on the website. The defendant applied for the registration of the “Jager Haguleisi in Chinese” trademark on Class 33 on liquors, and after obtaining the registration, he and Sheng Luo La jointly used the “Jager Haguleisi in Chinese” mark on liquor products. Pu Yuan Garden Trading Company is a distributor of Sheng Luo La that sells “Jager Haguleisi in Chinese” liquor on JD.com stores and combines Mast-Jagermeister’s “Jagermeister” liquor with “Jager Haguleisi in Chinese” Liqueur. Mast-Jagermeister claimed that the three defendants had infringed upon its trademark rights and constituted unfair competition, and claimed that punitive damages should be applied.

The first instance court found that Mast-Jagermeister’s “Jagermeister” trademark had been well-known to the relevant public in China on liquor products before the defendant applied to register the “Jager Haguleisi in Chinese” trademark, and constituted a well-known mark. The defendant applied to register a trademark similar to Mast-Jagermeister’s trademark, and the three defendants’ use of the trademark constituted an infringement of Mast-Jagermeister’s well-known trademark rights. The overall appearance similarity between the accused infringing products and Mast-Jagermeister’s products is relatively high, and the accused infringing products were mixed and sold with Mast-Jagermeister’s products, which can easily cause the relevant public mistakenly believe that the said products belong to a series of products or originated from the same source. The defendants’ actions had damaged the goodwill of Mast-Jagermeister’s “Jagermeister” brand. Sheng Luo La’s false publicity has the subjective intention of taking advantage of and free riding Mast-Jagermeister’s reputation. Mast-Jagermeister had issued multiple rights protection statements and sent demand letters to the three defendants. However, after receiving the demand letters, Sheng Luo La and other defendants did not respond in time and continued to infringe. The infringement was serious and punitive damages were applicable. The first instance court held that the three defendants should immediately stop the infringement and eliminate negative impact. Sheng Luo La should compensate Mast-Jagermeister for economic losses of RMB 10 million and the remaining two defendants should be jointly and severally liability for the compensation. Sheng Luo La and Pu Yuan Garden Trading Company appealed. The second instance court dismissed the appeal and affirmed the original judgment.

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