Weekly China Trademark News Updates

June 7, 2023

1. Victorinox’s “Cross and Shield” marks were intentionally infringed with bad faith. The infringers were ordered to pay RMB 3 million in compensation

The Beijing Xicheng District Court recently concluded a trademark infringement lawsuit between Victorinox AG (“Victorinox”), Beijing Weishi Elite Trading Co., Ltd. (“Elite”), and Shanghai Baoshun Trading Co., Ltd. (“Baoshun”). The court ordered Elite and Baosun to immediately cease trademark infringements and compensate Victorinox economic damages of RMB2.9 million (USD407,355) and reasonable expenses of RMB100,000 (USD14,046). Baoshun appealed the first instance decision but the Beijing IP Court rejected the appeal request.

The alleged infringements in this case were: 1. The alleged infringing store sells bags and uses “victoriacross flagship” in the store name and uses “” pattern on its webpage; 2. “Weishi Cross in Chinese” was used in the name of each product; 3. The home page of each product introduction picture uses a combination of “VICTORIACROSS” and ““; 4. “” was used alone in many places on the products bought during notarized purchase, and “VICTORIACROSS” and “” were used in combination on packaging and tags. The allegedly infringing products were backpacks, handbags, suitcases, etc., which fell into the goods approved for use under Victorinox’s “VICTORINOX” mark with reg. no. G763828, the “” mark with reg. no. 3491225, and the “Victorinox” mark with reg. no. 8563347. Therefore, the alleged infringement fell within the scope of protection of Victorinox’s trademarks, which constituted trademark infringement.

The court found that the production and use of Elite and Baoshun lacked a legal basis. Moreover, the following factors were considered: First, Elite’s “Weishi Cross in Chinese” mark with reg. no. 6954073 was determined by the China Supreme  Court to fall under Article 13, Paragraph 2 of the 2001 Trademark Law, which “reproduces, imitates or translates others well-known mark that are not registered in China are likely to cause confusion,” and invalidated. Therefore, Elite’s copying, imitating, and translating others’ prior well-known marks were done with bad faith intentions. Second, the alleged infringing stores and products used the “” logo that was similar to Victorinox’s registered marks. Compared with “,” the latter has a higher significance. The composition elements, method, and overall appearances were all very similar. Elite and Baoshun did not provide evidence to prove that their use had a legal basis for rights. Third, in the (2018) SPC Administrative Judgment No. 64 issued by the China Supreme Court on May 31, 2018, it was determined that prior to the registration date of the “VICTORIACROSS” mark with reg. no. 349122, Victorinox’s prior marks with reg. nos. G763828 and 3491225 were widely used in class 18’s goods for handbags, travel bags, and other goods, which could establish a certain fame in China. Therefore, as a product operator in the same industry, it was impossible for Elite to be unaware of Victorinox’s brand reputation, but it still used the “VICTORIACROSS” and “Weishi Cross in Chinese” in combination with the “” logo, which was very similar to the use of Victorinox. Its intention to actively seek to confuse the results was obvious. In summary, it can be determined that the subjective bad faith of Elite and Baoshun was obvious, and that their acts have infringed Victorinox’s trademark right, and they should bear the legal responsibility to stop the infringements.

2. RMB 800,000 in damages for unauthorized use of “Mercedes in Chinese” on auto parts

The Shanghai IP Court recently concluded a trademark infringement lawsuit between the appellant Shanghai Tonghe Auto Parts Co., Ltd. (“Tonghe”), the appellee Daimler AG (“Daimler”), and the defendant in the first instance Shanghai Tongzhi Auto Parts Co. Ltd. (“Tongzhi”). The court rejected the request to appeal and affirmed the lower court’s decision. Tonghe was ordered to immediately stop infringements against Daimler and was ordered RMB800,000 (USD112,380) in compensation to cover Daimler’s economic loss.

According to the notarized evidence submitted by Daimler and the administrative penalty decision, on-site transcripts, interrogation transcripts, photos and other evidence made by Shanghai Minhang District Market Supervision Administration, it can be determined that Tonghe sold brake pads, in the relevant stores it operated, along with filters, pulleys and other auto parts. These parts were marked with three-pointed star design, “Mercedes-Benz,” “MERCEDES-BENZ.” and other logos. The first instance court found that the said goods were identical to those approved for use by Daimler’s marks with reg. nos. 526122 and G1089299. The three-pointed star logo and the “MERCEDES-BENZ” mark used above were basically identical visually as the three-pointed star logo and the “MERCEDES-BENZ” mark owned by Daimler, which constituted identical marks. Compared with Daimler’s marks, the only difference between the “MERCEDES-BENZ” mark and the “Mercedes-Benz” mark was letter case, and there was basically no visual difference between the two in overall appearances. Therefore, Tonghe’s acts violated Daimler’s trademark rights. The first instance court took into account the relatively high popularity of Daimler’s marks on related goods, the fact that product quality may affect personal safety, and the variety of infringing products, and comprehensively considered Tonghe’s degree of subjective bad faith, the nature, time, and decided that the amount of compensation shall be determined based on factors such as the consequences, the quantity, and unit price of the infringing products, and the size of the company.

The main focus of dispute in the second instance of this case was whether the amount of compensation in the first instance was reasonable. Regarding Tonghe’s claim that the amount of compensation in this case should be based on the quantity of infringing products investigated and dealt with by the Market Supervision Administration and its fine. The second instance court found that Daimler, as the owner of the registered marks, has the right to both apply for administrative investigation and file a civil lawsuit for trademark infringement. Although Tonghe was punished administratively because Daimler purchased the infringing product based on the three notarizations involved in the case, the amount of compensation in civil infringement lawsuits is not necessarily based on the facts and the fines found in the administrative punishment. The first instance court’s comprehensive considerations of Tonghe’s infringement facts were appropriate.

With regard to Tonghe’s claim that Daimler failed to present evidence of notarized purchases in the first instance, resulting in the inability to identify product quality, Daimler should bear the adverse consequences. The second instance court found that although Daimler did not submit notarized evidence in the first instance, based on the photos attached to the notarial certificate and the content recorded on the CD-ROM and the relevant facts recorded in the administrative punishment decision, Tonghe did not submit valid evidence to prove its products’ legal origin. Based on this, the first instance court was not in err in determining that Tonghe infringed Daimler’s trademark. Moreover, product quality of the infringing products would not have affected the determination of trademark infringement.

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