Since aChinese fitness equipment company produced and sold the same sports equipment inChina which infringed its registered trademark, a foreign company came to Chinato appeal to the court. In addition to requiring the Chinese company to stopthe infringement, it also claimed the compensation for economic loss includingattorney fees and notary fees, etc. up to the amount of 3 million yuan (RMB,the same below).
The ShanghaiPudong People's Court (hereinafter referred to as the Shanghai Pudong Court)held that the trademark involved was highly distinctive and that it hadestablished a unique relationship with the plaintiff through the continued useand extensive publicity of the plaintiff and its cooperating merchants. Thedefendant’s use of the same mark on the same commodity as the trademark inquestion therefore violated the plaintiff’s exclusive right to use theregistered trademark.
In thiscase, the defendant was warned by the plaintiff for allegedly infringing on theplaintiff’s other trademarks and patent rights. After signing the settlementagreement with the plaintiff, the defendant promised not to engage ininfringing activities, but the defendant was once again found to have committedthe infringement. The defendant’s counterfeit trademarks and products were soldthrough various online and offline channels, and the products even had qualityproblems. The defendant’s conducts were in compliance with the applicableprovisions of the “bad wills” and “serious circumstances” of the punitivedamages under the Trademark Law. Shanghai Pudong Court finally determined threetimes the proportion of punitive damages. The triple of infringement profitshas exceeded 3 million yuan, exceeding the amount of compensation claimed bythe plaintiff.
It isreported that this is the first case of punitive damages for intellectualproperty infringement in Shanghai. The new Trademark Law stipulates thatmalicious infringement of trademark exclusive rights, if the circumstances areserious, the amount of compensation of more than one time and no more thanthree times the amount determined according to the actual loss of the rightholder, the profit obtained by the infringer's infringement, and the reasonablemultiple of the trademark license fee. The judgment of the Shanghai PudongCourt has actively explored the punitive damages system after theimplementation of the new Trademark Law, and has important reference value forthe trial of similar cases.
Note:The original content of this article was from Mr. Weifeng Chen of ShanghaiPudong Court.
