Weekly China Trademark News Updates

December 12, 2023

1. The Jiangsu High Court recognized “BURBERRY” as a well-known mark in a decision against a squatted mark registered for over 5 years and awarded RMB 6 million in damages

Recently, the Jiangsu High Court concluded a trademark infringement and anti-unfair competition lawsuit between Burberry Limited (“Burberry”), Shentu Clothing (Shanghai) Co., Ltd. (“Shentu”), Xinboli Trading (Shanghai) Co., Ltd. (“Xinboli”). The court recognized the “BURBERRY” trademark with reg. no. G733385 and the “Burberry Equestrian Knight Design” trademark with reg. no. 781602 (together as “Cited Marks”) constituted well-known marks on clothing and other goods. The defendant had infringed upon Burberry’s trademark and its acts constituted unfair competition. The defendant shall compensate Burberry for economic losses of RMB 6 million (USD 836,120).

Cited Marks

The court found that, first, based on the sales regions and circumstances, the duration of continuous use, the publicity method, duration, extent, geographical scope, and the market reputation of the Cited Marks, it was sufficient to conclude that, before the application date of the allegedly infringing trademark “BANEBERRY” (“Disputed Mark”), Burberry’s Cited Marks were widely known to the relevant public in China and were well-known marks.

Second, although the Disputed Mark and the Cited Marks were approved in the same class, for registered well-known trademarks, the scope of protection extends to marks filed on unidentical or dissimilar goods. For unregistered well-known marks, the scope of protection extends to marks filed on identical or similar goods. Article 45 of the Trademark Law stipulates that if a registered trademark violates the provisions of Article 13 of this Law, within five years from the date of registration of the trademark, the owner of the prior right or the interested party may request the Trademark Review and Adjudication Board to decide to revoke the registered trademark. For registration in bad faith, the owner of a well-known trademark is not subject to the five-year time limit. In this case, based on the fact findings, Burberry’s Cited Marks were not limited by the said five-year time limit.

Third, given that the Cited Marks are well-known marks registered in Class 25 for clothing and other goods, and the Disputed Mark was widely used in the signage of stores selling clothing and related goods, which constituted as bad faith copy and imitation of Burberry’s well-known Cited Marks and misled the relevant public, constituted trademark infringement, and should bear civil liability to stop the infringement and compensate for losses.

2. The second instance court decreased the damages for the “Zhou Liu Fu in Chinese” mark trademark infringement from RMB 30 million to RMB 5 million

Recently, the Hubei High Court issued a second instance judgment for a trademark infringement dispute between Zhou Liu Fu Jewelry Company Limited (“Zhou Liu Fu”), Hong Kong Zhou Liu Fu Jewelry & Gold Company International Group Limited (“Hong Kong Zhou Liu Fu”), Guangdong Fenglong Jewelry Co., Ltd. (“Fenglong”), and Wuhan City Jiang Han District Hongyi Jewelry Co., Ltd. (“Hongyi). The court upheld the trademark infringement finding from the first instance court but decreased the compensation from RMB 30 million (USD 4.18 million) to RMB 5 million (USD 696,650).

Cited Mark

Zhou Liu Fu was established in 2004 in Shenzhen and owns “Zhou Liu Fu” and “Zhou Liu Fu in Chinese ZHOU LIU FU” marks in jewelry related classes. Zhou Liu Fu had been affirmed by the China Jewelry and Jade Jewelry Industry Association as a well-known mark in China in 2015 and 2018.

Hong Kong Zhou Liu Fu was established in 2008 in Hong Kong under the legal name of “Hong Kong Zhou Liu Fu Jewelry Gold International Co., Ltd.” and it had filed trademarks using the said name in Classes 14 and 35. All of its marks filed in Class 14 had been invalidated by the CNIPA. However, trademarks in Class 35 for secretarial related, accounting, medical equipment, and human resource consultation were allowed. The WeChat account of Hong Kong Zhou Liu Fu showed that it has over 572 stores nationwide in accessories and jewelry related business.

The first instance court found that the “Zhou Liu Fu” trademark owned by Zhou Liu Fu is distinctive. Fenglong and Hongyi (acting as Hong Kong Zhou Liu Fu’s agent in mainland China) knowingly used such mark in soliciting franchisees, which exceeded the approved use of the trademarks owned by Hong Kong Zhou Liu Fu and was suspected as taking advantage of the fame of Zhou Liu Fu. The first instance court awarded Zhou Liu Fu RMB 30 million in compensation.

The second instance court found that Zhou Liu Fu had won a compensation of RMB 40 million through a series of rights protection lawsuits. The first instance court calculated the profit from infringement as approximately RMB 30 million based on 572 franchise stores and a franchise fee of RMB 60,000 per store. However, it did not consider that 322 out of the 572 stores had been ordered to pay compensation. Therefore, the liability for the infringement of Hong Kong Zhou Liu Fu should be reduced to RMB 5 million in order to avoid repeated compensation for the same infringement.

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