Weekly China Trademark News Updates

August 23, 2023

1. A liquor company infringed on Tesla’s well-known mark rights and were ordered to pay RMB 5 million in damages

The appellant China Food and Beverage Co., Ltd. (“China F&B”) and Guangdong China Food and Beverage Co., Ltd. (“Guangdong China F&B”) had a trademark infringement and unfair competition dispute with the appellee Tesla (Shanghai) Co., Ltd. (“Tesla”), Tangjiu Network Technology (Shanghai) Co., Ltd. (“Tangjiu”). The Shanghai High Court made a second instance judgment rejecting the appeal and upheld the original judgment.

Appellant’s Registered  Mark	Appellee’s Cited Marks
Reg. No. 13113593	Reg. Nos. 7792673, 13690430, 13690430, 8008888, 13690442, G1199687

The main issues in the second instance were: first, whether the use of the accused infringing logos by China F&B and Guangdong China F&B infringed Tesla’s trademark rights. Second, whether the amount of compensation awarded in the first instance was wrong.

Regarding issue 1, first, whether the Cited Marks involved in Tesla’s case constituted well-known marks. Here, the goods involved in the approved use of the Cited Marks were electric vehicles, electric vehicles, automobiles and its structural parts, etc. in class 12. The appellants’ use of the accused infringing logos on liquor products violated Tesla’s trademark rights. Since Tesla’s Cited Marks’ approved goods were not in the same class as the accused infringing goods, Tesla claimed that the Cited Marks reached well-known status and requested cross-class protection. In determining whether Tesla’s Cited Marks reached well-known status, the first instance court took a comprehensive consideration of factors such as the continuous use time, publicity, market reputation and popularity of Tesla’s Cited Marks in reaching its finding that Tesla’s Cited Marks were well-known to the relevant public in China when the alleged infringement occurred and recognized the Cited Marks as well-known marks.

China F&B claimed that the mark it used on the accused infringing goods was its ”      ” mark with Reg. No 13113593 (“’593 mark”), and Tesla‘s Cited Marks had not reached well-known status before the application date of ’593 mark. The Shanghai High Court found that the ‘593 mark was registered in class 32 for beer; ginger beer; malt beer; wort for beer making; hop juice for beer making; wort (beer after fermentation); mineral water Ingredients (closed). Except for the “” logo, China F&B’s use of the alleged infringing logos were very different from its registered ’593 mark. The “” mark was actually used on soda alcoholic drinks, which did not fall into class 32. Accordingly, China F&B’s use of the accused infringing logos was not the use of its registered ’593 mark, and its grounds for appeal lack factual basis and could not be supported.

Second, whether the use of the accused infringing logos by China F&B and Guangdong China F&B constituted infringement. Here, Tesla’s trademark “” is an artistic design of the English letter T, which has strong distinctiveness. Tesla’s six Cited Marks have been widely used and enjoy a high reputation in automobile products and have formed a stable corresponding relationship through combined use. China F&B and Guangdong China F&B’s combined use of the “” logos on bottled soda liquor goods, use of “” logos on canned soda liquor goods, used of “” logo on puree (craft beer) products, used of “” logos on bottled beer products, and promoted its products using “” logos. The Chinese, English, designs and other elements of the accused infringing logos were identical or similar to Tesla’s Cited Marks “Tesla in Chinese,” “TESLA,” and “” mark in terms of font, pronunciation, and composition. The combined overall structures of the alleged infringing logos are similar to Tesla’s “” mark. At the same time, China F&B’s accused infringing products and Tesla’s automobile products overlaps in consumers. China F&B also uses the image of Tesla cars in product promotion to further strengthen the connection of alleged infringing goods and Tesla’s goods. Therefore, China F&B’s use of the accused infringing logos were enough to confuse and misunderstand the relevant public that the accused infringing products have a specific connection with Tesla, which was an improper use of the market reputation of the Tesla’s well-known marks in order to mislead the public. China F&B’s action damaged Tesla’s well-known mark rights and constituted trademark infringement.

Regarding the second issue, whether the amount of compensation in the first instance judgment was wrong. In view of the fact that Tesla’s actual loss due to the infringement and Chian F&B’s benefit obtained from the infringement are difficult to calculate, and there is no corresponding trademark license fee for reference, the first instance court comprehensively considered the popularity and reputation of the goods using the well-known marks involved in finding that China F&B had committed multiple infringements such as trademark infringement and unfair competition. China F&B’s subjective bad faith was obvious, the scale of the infringement was large, the scope of investment promotion of the accused infringing products was wide, the product profit rate was relatively high, and the enforcement fee paid Telas for this case. Considering the above, it was not inappropriate to determine that China F&B and Guangdong China F&B should compensate Teslas for economic losses and reasonable expenses totaling RMB 5 million (USD689,000), which should be upheld. As for China F&B and Guangdong China F&B’s claim that its production and sales volume were small and there was no profit, the court held that its claim was inconsistent with the facts ascertained by the first instance court, and it failed to submit evidence to prove its actual profit. Therefore, its ground of appeal could not be supported.

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