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Weekly China Trademark News Updates – February 22, 2021

Weekly China Trademark News Updates

February 22, 2021

1. Burberry obtained its first preliminary injunction order against Baneberry

Burberry Limited (“Burberry”) registered the “BURBERRY,” “ ,” “,” and “,” marks on clothing and related goods. Among them, “BURBERRY” and “” marks were recognized as well-known marks multiple times. Xinboli Trading (Shanghai) Co., Ltd. (“Xinboli”) is the licensee of the marks “BANEBERRY” and “” (“Licensed Marks”).

Xinboli had been using the Licensed Marks and similar marks to Burberry’s marks “” and “” on clothing related goods across all Burberry’s clothing styles, designs, hangtags, purses, and bags, as well as the respective products’ shape. What is more, Xinboli used the royal arms of the United Kingdom (“Royal Arms”) to falsely promote its brand history and sources. Xinboli even opened its own brick and mortar shops or clearance shops in 2019 to sell its goods. Xinboli quickly expanded its sales and extended its coverage. At the time Burberry filed for the preliminary injunction at the end of 2020, Xinboli had opened 40 brick and mortar stores in large shopping malls and outlets in first and second tier cities, almost outmatched Burberry’s brick and mortar stores in mainland China. Xinboli also opened its online stores on TMall.com, WeChat, Pingduoduo, and Little Red Book. Xinboli’s actions caused confusion among the relevant public. Burberry sued Xinboli for trademark infringement and unfair competition. After docketing its case, Burberry filed a petition for preliminary injunction against Xinboli.

On January 29, 2021, the Suzhou Intermediate Court held the preliminary injunction hearing. The court ordered Xinboli to immediately stop using the Licensed Marks and immediately stop manufacturing and sell products bearing similar marks to Burberry’s G732879 “” mark and G987322 “” mark; also immediately stop using the “” Royal Arms logo on the hangtag of all its products and stop all false promotions.

In reaching its conclusion, the court examined 1) the status and stability of Burberry’s rights, 2) Xinboli’s likelihood of infringement, 3) urgency of Burberry’s petition for preliminary injunction, namely, whether Burberry would suffer irreparable harm unless the injunction is issued, 4) whether impairing the balance between the two parties and issuing the injunction would damage public interests.

Regarding Xinboli’s likelihood of infringement, the court found that Burberry’s “BURBERRY” and “” marks were likely to be recognized as well-known marks. Although the Licensed Marks used by Xinboli were registered for more than 5 years, Burberry’s “BURBERRY” and  ” marks were factually well-known prior to the License Marks’ application dates. Considered the Licensed Marks prosecution history, assignments, and actual use, the Licensed Marks shall be seen as bad faith registrations and not limited by the 5-year statute limitation. Moreover, Xinboli’s infringing use were bad faith copying and imitating Burberry’s well-known marks, used a mark similar to the Royal Arms, extensively copied all Burberry’s products, and intentionally copied Burberry’s brand history for false promotional activities. Xinboli’s actions were likely to infringe upon Burberry’s trademark right and amounted unfair competition.

Regarding the urgency of Burberry’s petition for preliminary injunction, namely, whether Burberry would suffer irreparable harm unless the injunction is issued, the court found that first, the scale of the alleged infringing activities was extensive and with high growth rate, while failure to issue the injunction would cause Burberry’s market share to be occupied and suffer irreparable economic harm. Second, the alleged infringing act would highly likely to cause confusion and mistake on the market, while failure to issue the injunction would seriously disparage Burberry’s goodwill and tarnish the significance and distinctiveness of Burberry’s well-known marks. Last, sales for the Chinese New Year’s holiday was approaching, which made it factually urgent to issue an injunction against the alleged infringing activities.

2. The Supreme People’s Procuratorate released the 26th batch of Guiding Cases of the Supreme People’s Procuratorate

On February 8, the Supreme People’s Procuratorate released the 26th batch of the Guiding Cases of the Supreme People’s Procuratorate. We handpicked the following to share with our readers.

a. Selling counterfeit products bearing registered Starbucks trademarks

Between May 2017 and January 2019, defendant Qiucheng Deng knowingly purchased counterfeit instant coffee bearing “XING BA KE in Chinese (星巴克)” and “STARBUCKS VIA” trademarks from Hong Kong with below-the-market price and sold some 21,304 products to defendant Shuangshan Food (Xiamen) Co., Ltd. (“Shuangshan”) for RMB 3.83 million (USD 592,000). Qiucheng Deng knew that its company Bai Yi Co., Ltd. did not have authorization from Starbucks Corporation but forged an authorization letter to authorized Shuangshan for sale of counterfeit Starbucks instant coffee. During the said period, the defendants used the forged authorization letter to sell 19,264 counterfeit Starbucks instant coffee to more than 50 shops in Wuxi, Hangzhou, Shantou, Wulumuqi, and 18 other provinces for RMB 7.24 million (USD 1.12 million).

On September 26, 2019, People’s Procuratorate of Xinwu District, Wuxi City, Jiangsu Province (“Xinwu Dist. Procuratorate”) prosecuted the defendants for selling counterfeit products. On December 6, 2019, Xinwu Dist. The court rendered first instance decision which ordered defendant Shuangshan to pay a fine of RMB 3.2 million (USD495,000) and sentenced defendants Qiucheng Deng and 4 others to jail-terms between 21 months and 5 years.

Consider numerous public consumers’ interests and public interests were damaged, the Wuxi Consumer Protection Commission initiated a civil public interest lawsuit sua sponte claiming treble punitive damages. The Wuxi Intermediate Court docketed the case on September 18, 2020.

b. Forging “CISCO,” “HP,” and “HUAWEI” trademarks

Between 2015 and April 2019, defendant Changlong Yao arranged defendant Jin Gu to purchase printers, labels, and fiber optic transceiver module for forging “CISCO,” “HP,” and “HUAWEI” fiber optic transceiver module products and arranged defendant Zihao Wei and two other people for selling abroad. Defendants Changlong Yao and Jin Gu manufactured and sold more than 100,000 pieces of the said forged fiber optic transceiver module for RMB 31.6 million (USD 4.88 million). 11,975 pieces of counterfeit fiber optic transceiver module and switches were seized on site, worth more than RMB 3.83 million (USD 592,000). The sales amount of Zihao Wei and two others were about RMB 7.45 million (USD 1.15 million), RMB 4.29 million (USD 663,000), and RMB 3.52 million (USD 544,000) respectively.

On September 6, 2019, People’s Procuratorate of Donggang District, Rizhao City, Shandong (Donggang Dist. Procuratorate) prosecuted the defendants before the Donggang Court. On December 12, 2019, the Donggang Court rendered the first instance decision and sentenced defendants Changlong Yao and four others for jail-terms between 26 months and 4 years. Changlong Yao was fined for RMB 5 million (USD 773,000) and the rest of the defendants were fined for an amount between RMB 140,000 to 250,000 (USD 21,600 to 38,600). The decision has come into effect.

Selling counterfeit products in or out of mainland China without authorization from the registered trademark owner in China violates China’s trademark law and regulations, infringes upon the registered trademark owner’s exclusive trademark right, damages goods goodwill, and constitutes a crime where the circumstances are serious.

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