Weekly China Trademark News Updates

November 10, 2022

1. RMB 50 million! Largest trademark infringement damages awarded to a foreign company in China

Recently, the Jiangsu High Court ruled in favor of raumplus Besitz-und Entwicklungs GmbH & Co. KG (“raumplus Besitz”), raumplus GmbH (“raumplus”), Delu (Taicang) Furniture Technology Co., Ltd. (“Delu Taicang”) against Delu Furniture (Shanghai) Co., Ltd. (“Delu Shanghai”), Delu Furniture (Nantong) Co., Ltd. (“Delu Nantong”), and Peijun ZHU in the final judgment on trademark infringement and unfair competition disputes. The judgment found that the defendants constituted trademark infringement and unfair competition and ordered to compensate the plaintiffs for economic losses of RMB50 million (USD6.9 million).

raumplus GmbH & Co. KG, the predecessor of raumplus Besitz, is a German company specializing in the field of sliding doors and customized system cabinets who entered the China market in 2009. raumplus, formerly known as raumplus International GmbH, is mainly engaged in decorative elements of residential interior design, especially living room partitions, room partitions, cabinets, sliding doors and other related products. raumplus Besitz owns the “Delu in Chinese” mark, the “raumplus” mark, and the “Delu” mark in class 20 for “furniture” related goods. Plaintiffs claimed that Defendants’ use of the marks “Delu in Chinese” and “raumplus” in the promotional materials constituted trademark infringement. Defendants Delu Shanghai and Delu Nantong used “Delu in Chinese” as their corporate name and “Lei Di Ni in Chinese (LEDINT)” as a high-end customized brand of Delu for publicity. Delu Nantong registered and used “Delu.com” domain name, which constitutes unfair competition.

Cited Marks

The court found that with regard to trademark infringement, the customized furniture produced and sold by Delu Shanghai and Delu Nantong was the same as the furniture and other products approved by the Cited Marks. At the same time, Delu Shanghai and Delu Nantong use the “Delu in Chinese” trademark in furniture invoices, brochures, design drawings, WeChat public accounts, store decoration, store fronts, exhibition halls, bidding documents, etc, and use the “TaumpIus” logo in the furniture invoice and external publicity. These logos are the same as those of raumplus Besitz. Accordingly, the defendants constituted trademark infringement. Regarding unfair competition: (1) Delu Shanghai and Delu Nantong continued to use “Delu in Chinese” as the corporate name after raumplus and Shanghai Lei Di Ni Company, an outsider, ended the joint venture, misleading the public and constituting Unfair competition; (2) Delu Shanghai and Delu Nantong publicized “Lei Di Ni in Chinese (LEDINT) as a high-end customized brand under Delu,” which is an unfair competition act of false publicity; (3) Delu Nanton’s registration and use of the “Delu.com” domain name is an act of unfair competition. The court also found that the acts of the defendants Delu Shanghai and Delu Nantong were malicious infringement and the circumstances were serious, and punitive damages were applicable.

2. Novartis AG successfully invalidated the “Nuo Hua Lv in Chinese” mark using the “Nuo Hua in Chinese” mark that was recognized as a well-known mark by the courts

Recently, the Beijing High Court made a judgement against CNIPA and the third-party Hangzhou Runrong Business Consulting Co., Ltd. (“Runrong”) in favor of  Novartis AG in a trademark invalidation dispute. The court found that Novartis’ “Novartis” mark (Cited Mark) constituted a well-known mark in “pharmaceutical preparation” goods.

Cited Mark

The CNIPA previously found that the evidence submitted by Novartis was not enough to prove that its Cited Mark  had been known to the relevant public before the application date of the Disputed Mark. The registration of the Disputed Mark would not mislead the public and thus damage the interests of Novartis. The Disputed Mark did not violate Article 13(3) of the 2013 China Trademark Law and the Disputed Mark shall be maintained.

The first instance court found that the audit report, market share ranking, distribution agreement and invoice, advertising contract, national library search report and other evidence submitted by Novartis can prove that Novartis is a well-known company in the field of medicine. Its affiliated companies have a high market share of products, a wide range of sales areas, and relatively high sales. Various newspapers and magazines have a lot of reports on Novartis and its products. Therefore, the evidence submitted by Novartis is sufficient to prove that, prior to the application date of the Disputed Mark, the Cited Mark, through extensive and long-term publicity and use by Novartis, has a very high reputation and influence on goods such as “pharmaceutical preparations,” and it is generally familiar and well known to the relevant public, which constitutes a well-known mark on goods such as “pharmaceutical preparations.” The Disputed Mark “Nuo Hua Lv in Chinese” completely includes the Cited Mark, which constituted an imitation. Goods such as “pharmaceutical preparations” approved for use for the Cited Mark are closely related to daily life and a wide range of consumer groups. Although the goods such as “cosmetics, shampoo” and “pharmaceutical preparations” are approved by the Disputed Mark and the Cited Mark belong to different classes in the CNIPA Classifications, their sales channels and consumer groups overlapped, and they have certain relevance. Medicinal cosmetics, medicinal shampoo and other products are also common in the market. Under the circumstance that Novartis’ Cited Mark  is relatively famous, the application for registration of the Disputed Mark will easily misled the relevant public into believing that the Disputed Mark has a considerable degree of connection with Novartis’ well-known trademark, thereby misleading the public, harming the interests of Novartis, and violating the Article 13(3) of the 2013 China Trademark Law. The second instance court upheld that the first instance decision.

3. The Regulations on the Supervision and Administration of Trademark Agency was recently released

The Regulations on the Supervision and Administration of Trademark Agency (“Regulations”) was recently released, which is an effective means to further improve the intellectual property agency management system and improve the level of regulatory standardization. The “Regulations” will come into force on December 1, 2022.

The Regulations focus on the prominent problems of the current trademark agency industry, such as the low entry threshold, too many entities, non-standard operation and management, and uneven service levels. The Regulations aim to improve the overall service quality and development level of the industry at the source, establish and improve the registration system for trademark agencies. Clearing up agencies that do not carry out business for a long time and occupy industry resources by improving the agency registration procedures. Promote the formation of a healthy development pattern for the industry. At the same time, in order to facilitate the registration process of the agency, it is stipulated that the information that can be obtained through the government information sharing platform shall not be required to be repeatedly provided by the trademark agency.

The Regulations further standardize the behavior of trademark agency, stipulate the basic principles of engaging in trademark agency business, the obligations to be performed and the publicity of the basic matters of the agency, require trademark agencies to establish and improve the business management system and file system, strengthen the professional ethics of practitioners and professional discipline education.

The Regulations improve the legal liability of trademark agencies for illegal acts and strengthen legal deterrence. Combined with practice, the China Trademark Law and its implementing regulations listed the illegal acts of trademark agency in detail to enhance the operability. Clarify the illegal circumstances of engaging in trademark agency business through the Internet. At the same time, it stipulates the supervision responsibility of the intellectual property management department and the disciplinary requirements and accountability for those who are engaged in trademark registration and management.

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