SPC: Say "No" to Malicious Attachment of Well-known Trademarks

Is it "Li Kui" or "Li Ghost" for alcoholic beverage products printed with "Lafei Manor" and "Shanghai Siemens Electric Co., Ltd." for washing machine products that use "Shanghai Siemens Electric Co., Ltd." in the outer packaging and promotional activities?

On April 22, the Supreme People's Court held a press conference to kick off the Intellectual Property Publicity Week with the theme of "Intellectual Property Transformation and Application to Promote High-quality Development".

At the press conference, the SPC released the top 10 intellectual property cases and 50 typical intellectual property cases in Chinese courts in 2023. Among them, a number of cases, such as the "Siemens" trademark infringement and unfair competition dispute case and the "Lafite" trademark infringement and unfair competition dispute case, demonstrate the people's court's judicial attitude of effectively cracking down on the malicious clinging of well-known trademark goodwill and strictly protecting intellectual property rights.

Strictly apply the system of obstruction of the production of evidence

In the case of trademark infringement and unfair competition dispute involving "Siemens" issued by the Supreme People's Court, the people's court fully supported the right holder's claim for compensation of 100 million yuan. It is worth mentioning that the second-instance judgment of the case strictly applies the system of obstruction of the presentation of evidence, and for the infringer who deliberately fails to provide evidence and obstructs the people's court's determination of the facts of the case, the infringer shall be dealt with unfavorably and the judgment result shall be made in accordance with the law.

In this case, Xi Co., Ltd. and Xi (China) Co., Ltd. (hereinafter referred to as Xi Company) are the right holders of the registered trademarks of "Siemens" and "SIEMENS", and the two trademarks are registered on washing machines and other goods, and have been well-known after long-term use and vigorous promotion and publicity by Xi.

Ningbo Qimou Electric Appliance Co., Ltd. and others will be widely used as a commercial logo in the name of "Shanghai Siemens Electric Appliance Co., Ltd." registered overseas as a commercial logo in the washing machine products, product packaging and related publicity activities produced and sold. A company in the west believed that the actions of Ningbo Qi Electric Appliance Co., Ltd. and others infringed on its exclusive right to use a registered trademark and constituted unfair competition, so it sued the court.

The court of first instance held that the alleged infringement of Ningbo Qi Electrical Appliance Co., Ltd. and others did not constitute trademark infringement, but constituted unfair competition, and ordered Ningbo Qi Electrical Appliance Co., Ltd. and others to immediately stop the infringement and compensate for economic losses of 100 million yuan and reasonable expenses of 163,000 yuan. Ningbo Qi Electric Co., Ltd. and others were dissatisfied and appealed.

The Supreme People's Court held in the second instance that Ningbo Qi Electrical Appliance Co., Ltd. and others were aware of the popularity of the "Siemens" and "SIEMENS" trademarks, and deliberately used "Shanghai Siemens Electrical Appliances Co., Ltd." on washing machine products, causing confusion and misunderstanding among consumers, which constituted trademark infringement;

With regard to the amount of compensation, the Supreme People's Court held in the second instance that although the available evidence was difficult to determine the actual losses of Xi's company or the infringement profits of Ningbo Qi Electric Appliance Co., Ltd., it was sufficient to determine that the infringement profits of Ningbo Qi Electric Appliance Co., Ltd. had clearly exceeded the statutory maximum compensation limit of 5 million yuan. In this case, in view of the fact that Ningbo Qi Electrical Appliance Co., Ltd.'s refusal to provide financial information related to the infringement has constituted an evidentiary obstruction, the court of first instance referred to the data in the media report that the total annual sales of Ningbo Qi Electrical Appliance Co., Ltd. was 1.5 billion yuan, and based on the relevant facts of the case, calculated the sales proportion of the alleged infringing products according to one-fifteenth, and then determined that it was not improper for Ningbo Qi Electrical Appliance Co., Ltd. and others to bear the amount of 100 million yuan in compensation. The Supreme People's Court rejected the appeal and upheld the original judgment.

严惩“傍名牌”“搭便车”侵权

In a dispute over trademark infringement and unfair competition involving "Lafite" issued by the Supreme People's Court, the people's court ruled that the trademark registrant with the intent to cling to the trademark should not be protected for its trademark use. The judgment of this case demonstrates the strength and determination of the people's court to severely punish "famous brands" and "free riders", and advocates that market entities participate in market competition in good faith and goodwill.

In this case, the winery was the owner of the trademark "LAFITE" and the trademark "CHATEAU LAFITE ROTHSCHILD" (hereinafter referred to as the trademark in question), and the two trademarks were registered on alcoholic beverage products. The trademark in question has a high reputation after long-term use, and "LAFITE" and "Lafite" have established a solid relationship.

On April 1, 2005, Nanjing Jin Liquor Co., Ltd. applied for the registration of the trademark "Lafite Manor" on wine and other goods. Since then, Nanjing Jin Wine Co., Ltd. has used logos such as "Lafei Manor" and "LAFEI MANOR" in the process of producing, importing and selling wines, and has publicized and promoted them on its website and transaction documents.

In December 2016, the Supreme People's Court issued a retrial judgment in favor of the trademark administrative department to revoke the trademark "Lafite Manor". A winery then sued Nanjing Jin Wine Co., Ltd. and other 7 to the court. The court of first instance held that Nanjing Jin Liquor Co., Ltd. and other seven defendants constituted trademark infringement and unfair competition, and ordered them to stop the infringement and apply punitive damages. Nanjing Jin Liquor Co., Ltd. and others were dissatisfied and appealed.

The Supreme People's Court held in the second instance that Nanjing Jin Wine Co., Ltd. and others had malicious intent in attaching to the trademark involved in the case of Lafei Manor in the process of applying for registration and use of the trademark "Lafei Manor", and their use of the logos "Lafei Manor" constituted trademark infringement, and exaggerating the historical inheritance and popularity of "Lafei Manor" wine in the publicity constituted false publicity. Nanjing Jin Liquor Co., Ltd. and others had obvious malicious intent in infringement, and the infringement was serious, so punitive damages were applied according to the request of a winery, and Nanjing Jin Liquor Co., Ltd. and others were ordered to compensate a total of 79.17 million yuan for economic losses and reasonable expenses.

Demonstrate a strict judicial attitude

The Supreme People's Court concluded a dispute over trademark infringement and unfair competition involving "Panpan", and applied four times the punitive damages to the act of maliciously clinging to goodwill, with an award of more than 100 million yuan.

When handling cases involving the infringement of the "Michelin" trademark, the people's courts have clarified the judicial protection standards for well-known trademarks in foreign languages when there are multiple Chinese translations, and cracked down on infringers' malicious clinging to the reputation of well-known trademarks in foreign languages.

……

The reporter learned from the press conference that in recent years, the people's courts have adhered to strict protection of intellectual property rights, and significantly increased the cost of infringement and violation of the law by applying the punitive damages system in accordance with the law.

"In 2023, courts across the country will apply punitive damages in 319 cases, a year-on-year increase of 117%, and the amount of damages awarded will be 1.16 billion yuan, a year-on-year increase of 3.5 times. Lin Guanghai, President of the Third Civil Tribunal of the Supreme People's Court, said that in the past year, when the people's courts tried intellectual property infringement cases, they adhered to strict protection, severely punished infringement and counterfeiting, and made full use of punitive damages to ensure that rights holders received full and full compensation.

"The issue of intellectual property compensation is not only a hot issue of social concern, but also a key and difficult issue in judicial practice. Lin Guanghai said that the Supreme People's Court has issued guiding cases on the application of punitive damages, clarified the specific conditions for the application of punitive damages, refined the calculation method of punitive damages, and guided the people's courts at all levels to apply punitive damages in accordance with the law and strictly protect intellectual property rights.