Weekly China Trademark News Updates

August 3, 2022

1. Vans is awarded for RMB 2.71 million based on bad faith infringements and treble damages

The Wenzhou Intermediate Court of Zhejiang recently made a second instance trademark infringement judgment between appellant Ruian Guangzu Shoe Factory (“Guangzu”), Zou Zhengbin, appellee Vans Inc., and defendants Ningbo Lehao Electronic Commerce Co., Ltd., Suzhou Baiyiju Apparel Co., Ltd. and Yongxiu County Chuangxing Beauty Co., Ltd. The court rejected the petition to appeal and affirmed the lower court’s judgment.

Disputed Mark	Cited Mark
	Reg. No. 8606383

First, regarding whether the accused infringing goods infringed the exclusive rights of Vans’ registered trademark with reg. no. 8606383, the accused infringing goods were the same as the footwear goods approved for use by the Cited Mark. The logo used was similar to the overall structure and line shape of the Cited Mark, with only slight differences at the end of the line on the right side, which was likely to cause confusion among the relevant public and constitute trademark infringement. Although Guangzu and Zou Zhengbin claimed that the alleged infringing logo would not cause confusion among the relevant public regarding the source of the goods, the court did not support such claim because they did not provide sufficient evidence.

Second, regarding the liability of Guangzu, Vans conducted notarized purchases of the alleged infringing goods on Tmall store and all were marked with the accused infringing logo on the side of the shoes, and all labled that the manufacturer was Guangzu. The shoes and shoe uppers displayed in the 29 product links in 14 Tmall stores all attached the same accused infringing logo as those products purchased during the notarized purchase. The product’s features from the 14 Tmall stores and those from the notarized purchase were highly similar, the legal representative of the business entity was also the same. The first instance did not err in calculating the sales volume of the Tmall product links as the sales volume of Guangzu. The product display pictures and product details in the above links were all shoes with the alleged infringing logo. Guangzu and Zou Zhengbin claimed that some shoes were sold without the accused infringing logo and should be deducted from the sales amount, but such claim was not supported because they did not provide sufficient evidence to support their claim. Manufacturers and retailers should bear corresponding responsibilities for their respective infringements. Guangzu and Zou Zhengbin’s claim that there was repeated compensation in the first instance lacked supporting evidence and the court did not support their claim. As for the determination of the sales price of Guangzu’s alleged infringing products, the sales price in the administrative penalty was only the selling price of the batch of goods seized by the administrative department, and cannot be used to determine the price of the alleged infringing goods sold on the accused Tmall store. The accused Tmall store was the main body of online sales. The first instance determined its sales price based on the average selling price of the accused infringing goods found on Guangzu’s 1688 e-commerce platform store was not improper and this court upheld such finding. Guangzu was the manufacturer and seller of the alleged infringing goods, and had received two administrative penalties for infringing the Cited Mark. After the second administrative penalty, it continued to infringe using other entities under its control with obvious subjective bad faith. The first instance had factual and legal basis for using the sales amount deducting the base price as the calculation method of its profit and awarded treble punitive damages. This court upheld the first instance decision.

Third, regarding reasonable expenses, Vans paid notarization fees for the rights protection in this case, and hired attorneys. It was not inappropriate to determine the reasonable rights protection fee of RMB20,000 (USD3,000) in the first instance. Vans sued Guangzu and investor Zou Zhengbin to bear joint compensation liability. The first instance judgment that Zou Zhengbin should bear supplementary compensation liability for the debts was to reduce Zou Zhengbin’s responsibility and did not overstep the scope of Vans’ claims.

2. Obtaining trademarks without good faith and initiates infringement lawsuits constitute abuse of rights

The Beijing Intellectual Property Court recently rejected a second instance appeal petition for a trademark infringement case between appellant Ma and appellee Shenzhen Chow Tai Fook Online Media Co., Ltd. (“Shenzhen Chow Tai Fook”), and the first instance defendant Beijing Jingdong SanbailuShidu Electronic Commerce Co., Ltd. The Beijing IP Court affirmed the lower court decision.

The court found that:

1. Shenzhen Chow Tai Fook’s use of “Jiao Ren in Chinese” on the disputed products was justified

 First, as far as the entity relationship is concerned, Shenzhen Chow Tai Fook is one of the subsidiaries of Chow Tai Fook Jewelry Group. The alleged infringing goods sold by Shenzhen Chow Tai Fook were the “Chow Tai Fook” brand “Jiao Ren in Chinese” series of diamond jewelry, which originates Chow Tai Fook Jewelry Group. Shenzhen Chow Tai Fook, as an affiliated entity, had the basis as an affiliated entity in the promotion and use of the “Jiao Ren in Chinese” series of diamond jewelry.

Secondly, in terms of the popularity of the cited mark, Shenzhen Chow Tai Fook provided evidence that the “Chow Tai Fook Jiao Ren Series” was used before the application date of Ma’s mark “” with reg. no. no. 6703145 and had obtained certain popularity.

Third, as far as the scope of use is concerned, “within the original scope of use” stipulated in Article 59, paragraph 3 of the Trademark Law should not be strictly applied to only the original scale of business and the original scope of goods circulation, but should be comprehensively determined by the popularity, usage, and nature of goods or services a prior user using the corresponding logo. According to the facts affirmed in this case, Ma named Chow Tai Fook Gold (Shenzhen) Company as a defendant in 2018 by claiming that Chow Tai Fook Gold (Shenzhen) Company launched the “Jiao Ren in Chinese” series diamond ring and pendant on its website on June 12, 2018. The People’s Court of Yantian District, Shenzhen, Guangdong Province issued a civil judgment affirming Chow Tai Fook Gold (Shenzhen) Company had actually used “Jiao Ren in Chinese” as the name of the series of products before Ma applied for the disputed trademark, and had prior rights, so Ma’s claim was rejected. After investigation, the judgment has come into force. Given that the disputed goods in this case sold by Shenzhen Chow Tai Fook were diamond jewelry, and the evidence in the case was sufficient to prove that the “Chow Tai Fook Jiao Ren Series” diamond jewelry has been used before the application date of Ma’s trademark with reg. no. 6703145, and it had obtained a certain reputation. In combination of the above facts, this court found that the promotion and use of the “Jiao Ren” series of diamond jewelry by Shenzhen Chow Tai Fook had the basis as a related entity, and its goods circulation came from prior users, so it can be determined that the goods sold by Shenzhen Chow Tai Fook still belong to Chow Tai Fook, and falls within the original scope of use of the “Jiao Ren in Chinese” series of diamond jewelry.

Finally, in terms of use, whether the affiliated company of Shenzhen Chow Tai Fook used Chow Tai Fook’s “Jiao Ren in Chinese” series of diamond jewelry first, or Shenzhen Chow Tai Fook used Chow Tai Fook’s “Jiao Ren in Chinese” series of diamond jewelry in sales, both uses were a combination of “Jiao Ren in Chinese” and “Chow Tai Fook.” According to the evidence provided by Ma for his use of the trademark no. 6703145, it was not enough to determine that the combined use of the trademarks “Jiao Ren in Chinese” and “Chow Tai Fook” would cause the relevant public to mistakenly believe that the goods involved originated from Ma. Therefore, it was not necessary to add distinguishable features on the disputed mark.

2. Ma’s application for registration of the disputed mark violated the principle of good faith

First, in terms of trademark distinctiveness, Chow Tai Fook’s “Jiao Ren in Chinese” series of diamond jewelry pictures used the “Jiao Ren in Chinese” logo composed of letters and Chinese characters in many promotions in magazines in 2006, which had a high degree of distinctiveness. When comparing Ma’s trademark with reg. no. 6703145 with the trademark used in Chow Tai Fook’s “Jiao Ren in Chinese” series, both marks used similar combinations of letters and Chinese characters and adopted the same letter arrangement, which could not be seen as incidental.

Second, from the perspective of subjective intentions, the evidence in the case can prove that Chow Tai Fook’s “Jiao Ren in Chinese” series diamond jewelry products were launched in 2006 and were used for a long-term and continuous use with publicity. On May 6, 2008, Ma applied for the disputed mark when Chow Tai Fook’s “Jiao Ren in Chinese” series of diamond jewelry products and their logos were already well-known, and Ma should have known, but applied for registration of a trademark similar to the logo used by Chow Tai Fook’s “Jiao Ren in Chinese” series of diamond jewelry products, which was subjectively difficult to be seen as to have goodwill.

Third, from the perspective of use after registration, the evidence submitted by Ma can only prove that he has licensed the trademark and cannot prove that he has used or has the intention to use the disputed trademark in the approved classes according to the Trademark Law, which does not conform with the principle of applying for registration of a trademark based on actual needs in the Trademark Law. Ma cannot prove that he registered the disputed mark for the purpose of actual use.

Finally, Ma also applied for and registered other name brands as trademarks. Although Ma denied it, it has been verified that the registrants of these trademarks were Ma, the registrant’s address was the same as Ma’s address recorded for the disputed mark. Therefore, the first instance court did not accept Ma’s rebuttal, and it should be considered that these trademarks were all applied for or registered by Ma. These trademarks span a wide range of classes and belong to different industries. They also included trademarks that were similar in appearance, of the same class or similar to other well-known trademarks, which could not prove that Ma had the intention to use or had the need to apply for these trademarks. As an individual, Ma’s obviously purpose is to hoard these trademarks. Accordingly, the court held that Ma’s application for registration of the disputed mark violated the principle of good faith, and the right basis of which Ma claimed his rights in this case was not legitimate and should not be supported in accordance with the law.

3. Ma’s behavior constitutes abuse of rights

The Civil Judgment (2018) Yue 0308 Min Chu No. 588 found that: Chow Tai Fook Gold (Shenzhen) Company had actually used “Jiao Ren in Chinese” as the name of a series of products before Ma applied for the disputed mark, so Chow Tai Fook Gold (Shenzhen) Company had prior right and Ma’s claim is rejected. Ma again filed a lawsuit against Shenzhen Chow Tai Fook Company for selling Chow Tai Fook’s “Jiao Ren in Chinese” series of diamond jewelry on JD.com for the same reason, and asked the other party to compensate for the losses. As the owner of the registered trademark no. 6703145, Ma’s application for registration of the disputed mark violated the principle of good faith. Under the circumstance that the existing evidence was insufficient to prove that he has the real intention to use and the fact of using the disputed mark, he still filed lawsuits against trademark holder who has the legitimate right to use its marks for compensation. Ma’s actions obviously constituted abuse of rights, and should be stopped and given a negative evaluation in accordance with the law.

Accordingly, Shenzhen Chow Tai Fook’s behavior did not infringe Ma’s trademark right in the case. The first instance court’s decision was affirmed.

3. Michelin in Chinese was recognized as well-known and successfully invalidated “Mei Qi Lin in Chinese”

The Beijing High Court recently rendered a decision to reject the petition to appeal for a trademark invalidation case between the appellant CNIPA and the appellee Michelin Group Corporation (“Michelin”), and the third party in the original trial, Kunming Huaxing Seed Industry Co., Ltd. (“Huaxing Seed Industry”). The court affirmed the lower court’s decision.

Disputed Mark	Cited Mark
Reg. No. 31295320	Reg. No. 6167650

The issue of this case was whether the registration of the disputed mark constituted the situation referred to in Article 13, Paragraph 3 of the 2013 Trademark Law. The Beijing High Court reasoned that the sales audit data, market share and ranking, media publicity reports, advertising expenses, inquiries records of the National Library of China, administrative and judicial protection records and other evidence submitted by Michelin can prove that prior to the disputed mark’s application date, Michelin’s cited mark has been widely known to the relevant public in China on the product of “pneumatic tires for vehicles” through long-term and extensive publicity and use, and constituted a well-known trademark.

The Disputed Mark was a word mark consisted of the Chinese character “Mei Qi Lin in Chinese,” which was similar to the Cited Mark “Mi Qi Lin in Chinese” in terms of text, pronunciation, appearance, etc., and constituted a copy or imitation of the Cited Mark. The Disputed Mark’s approved goods for “plant seeds, fresh vegetables, plants, and fresh fruits” were different than the Cited Mark’s approved goods for “pneumatic tires for vehicles” of which the Cited mark was known for. But both were closely related to daily consumption and there were certain degrees of overlap in its respective consuming public. Under the circumstance that the Disputed Mark constituted as a copy and imitation of the Cited Mark, when the relevant public buys the above-mentioned goods, it is easy to think that the Disputed Mark has a considerable degree of connection with the Cited mark and Michelin, thereby diminish the Cited Mark’s distinctiveness or unfairly use the Cited Mark’s market reputation, which was detrimental to Michelin’s well-known Cited Mark’s interests. Therefore, the registration of the Disputed Mark constituted the circumstance specified in Article 13(3) of the Trademark Law of 2013, and should be declared invalid.

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