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¡°Jinpai¡± Menswear Uses Trademark Labels Similar to Those of K-Boxing Men¡¯s Wear
[2020-06-19]

Court: This Constitutes an Infringement upon K-Boxing¡¯s Right to Exclusively Use Registered Trademarks

Recently, the Shanghai Intellectual Property Court (hereinafter referred to as the ¡°SIPC¡±) pronounced a judgment on the case of the Appellants Suzhou Jinpai Garments Co., Ltd. (hereinafter referred to as ¡°Jinpai Company¡±) and Liu v. the Appellee K-Boxing Men¡¯s Wear Co., Ltd. (hereinafter referred to as ¡°K-Boxing Company¡±) in respect of infringement upon trademark rights, and upheld the judgment of first instance: Jinpai Company shall immediately stop the infringement upon K-Boxing Company¡¯s right to exclusively use the registered trademark involved in the case, publish a statement and eliminate the impact; Jinpai Company shall compensate K-Boxing Company for economic losses and reasonable expenses of RMB 716,000; Liu shall be jointly and severally liable for compensation with Jinpai Company within the range of RMB 31,500, and compensate K-Boxing Company for economic losses of RMB 20,000 for the trademark infringement carried out by him independently.

 

[Case Review]

K-Boxing Company is the right holder of the registered trademarks of ¡°¾¢°Ô,¡± ¡°K-BOXING¡± and the boxing champion figure series. In September 2017, K-Boxing Company found that the clothing sold in the Jinpai apparel stores in two Wal-Mart stores in Shanghai, and the logos on the store signboards, the outer packaging bags, and the hang tags are similar to the registered trademarks of K-Boxing Company. The production information of Jinpai Company can be found on the clothing tags. Liu is the general sales agent of Jinpai Company in Shanghai.

K-Boxing Company believed that Jinpai Company¡¯s acts are sufficient to cause confusion and misrecognition by the relevant public and constitute trademark infringement. Liu is the general agent of Jinpai Company in Shanghai, and the alleged infringing trademark labels for display and promotion at his two business premises were produced by Jinpai Company. Therefore, Liu should be liable for joint compensation with Jinpai Company within the corresponding scope for his aiding infringement. K-Boxing Company appealed to the court and requested Jinpai Company to immediately stop the infringement, publish a statement, eliminate the impact, and compensate K-Boxing for its economic losses of RMB 1 million; Liu to assume joint and several liability for compensation within the range of RMB 300,000; and Jinpai Company and Liu to jointly bear the reasonable expenses of K-Boxing Company for the case of RMB 16,000.

Jinpai Company argued that it is the holder of the right to exclusively use the registered trademark series of ¡°Jin (¾¢)¡± and ¡°Jinpai (¾¢ÅÆ)¡± words as the core content. Most of this series of trademarks were registered earlier than the trademarks of K-Boxing, so Jinpai Company has the existing prior rights. ¡°Jinpai (¾¢ÅÆ)¡± as the identifier in its enterprise name, the company has the right to use it legally, and its use does not constitute an infringement upon K-Boxing Company¡¯s trademarks. Liu recognized himself as the actual operator of the two Jinpai apparel stores, but argued that he was a legally franchised seller of Jinpai Company; the source of the goods was legal; and his sales did not violate K-Boxing Company¡¯s right to exclusively use its registered trademarks.

[Case Study]

After trial, the court of the first instance held that the alleged infringing trademark label ¡°¾¢ÅÆÄÐ×°¡± and the registered trademark ¡°¾¢°ÔÄÐ×°¡±involved in the case have similar overall text arrangement style. The alleged infringing trademark labels ¡°J-JINPAI¾¢ÅÆÄÐ×°¡± (word and figurative marks) and the registered trademark series involved in the case ¡°K-BOXING¾¢°ÔÄÐ×°¡± (word and figurative marks) are both word and figurative marks, which are similar in overall effect such as arrangement and combination, text style, etc. They are similar trademarks and enough to confuse the public, so Jinpai Company¡¯s act constitutes infringement.

In this case, Jinpai Company used the alleged infringing trademark labels on men¡¯s clothing, clothing tags and the outer packaging, and put the products on the market for circulation. Therefore, the scope of the responsibilities undertaken by Jinpai Company should cover the production and sales of the alleged infringing clothing. Based on the franchise relationship, Liu sold part of the alleged infringing clothing produced by Jinpai Company, and should be held responsible together with Jinpai Company in this regard. Since some alleged infringing trademark labels used on the signboards and the interior decoration of the two stores was produced by Liu unilaterally, the relevant infringement responsibility shall be solely borne by him.

Accordingly, the court of first instance ruled that Jinpai Company shall immediately stop the infringement, publish a statement, and eliminate the impact; Jinpai Company shall compensate K-Boxing Company for economic losses and reasonable expenses of RMB 716,000; Liu shall be jointly and severally liable for compensation with Jinpai Company within the range of RMB 31,500, and compensate K-Boxing Company for economic losses of RMB 20,000 for the trademark infringement carried out by him independently.

Both Jinpai Company and Liu refused to accept the judgement of first instance and appealed to the SIPC.

Jinpai Company believed that the alleged infringing trademark labels are not similar to the K-Boxing Company¡¯s registered trademark series, so its use did not constitute infringement. Liu believed that as a franchised dealer of Jinpai Company, his use of the related trademark labels was part of the sales behavior, and he did not independently commit the infringement.

After trial, the SIPC held that first of all, the infringed goods and the products within the approved scope of use of K-Boxing Company¡¯s registered trademarks are both men¡¯s clothing, and the sales areas of the two overlap. Men¡¯s clothing is a daily consumer product, and the relevant public pays relatively little attention when choosing and purchasing the product. Second, K-Boxing Company has been using the registered trademarks containing the words ¡°¾¢°Ô,¡± ¡°K-BOXING,¡± and the boxing champion figure or the combinations thereof in its operation and publicity activities. The ¡°¾¢°Ô¡± brand has a high reputation in the men¡¯s clothing industry. Therefore, based on the general attention of the relevant public, the alleged infringing trademark labels may cause the relevant public to misrecognize the origin of the goods or think that the origin has a specific connection with the products bearing K-Boxing Company¡¯s registered trademarks. Jinpai Company used trademark labels similar to the registered trademarks of K-Boxing Company on the clothing tags and outsourcing bags produced and sold by it, and Liu used trademark labels similar to the registered trademarks of K-Boxing Company on the signboards and background walls of stores. This is enough to cause confusion and misrecognition by the relevant public and constitutes an infringement upon K-Boxing Company¡¯s right to exclusively use registered trademarks.

As the general sales agent of Jinpai Company in Shanghai, Liu failed to review and perform the duty of care for the infringing goods he sold, so he could not be exempted from the liability for compensation in spite of the legal source of the goods. Liu shall bear joint and several liabilities with Jinpai Company to a certain extent. At the same time, the trademark labels used by Liu on the signboards and the background walls of the stores involved in the case were not the trademark labels agreed in the ¡°License of Attorney,¡± and his use of the above trademark labels exceeded the reasonable range of indicative use for the sale of goods. This infringement was done by Liu himself, and the corresponding compensation responsibility shall be borne by him alone.

In summary, the facts determined in the first-instance judgment are clear and the applicable laws are correct. Therefore, the first-instance judgment is upheld.

[Relevant Laws]

¢ñ. Tort Law of the People¡¯s Republic of China

Article 2 Those who infringe upon civil rights and interests shall be subject to the tort liability according to this Law.

¡°Civil rights and interests¡± used in this Law shall include the right to life, the right to health, the right to name, the right to reputation, the right to honor, right to self-image, right of privacy, marital autonomy, guardianship, ownership, usufruct, security interest, copyright, patent right, exclusive right to use a trademark, right to discovery, equities, right of succession, and other personal and property rights and interests.

 

Article 8 Where two or more persons jointly commit a tort, causing harm to another person, they shall be liable jointly and severally.

Article 15 The methods of assuming tort liabilities shall include:

1. cessation of infringement;

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6. compensation for losses;

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8. elimination of consequences and restoration of reputation.

The above methods of assuming the tort liability may be adopted individually or jointly.

¢ò. Trademark Law of the People¡¯s Republic of China

Article 57 Any of the following conduct shall be an infringement upon the right to exclusively use a registered trademark:

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(2) Using a trademark similar to a registered trademark on identical goods or using a trademark identical with or similar to a registered trademark on similar goods, without being licensed by the trademark registrant, which may easily cause confusion.

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(3) Selling goods which infringe upon the right to exclusively use a registered trademark.

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Article 63 The amount of damages for infringement upon the right to exclusively use a registered trademark shall be determined according to the actual losses suffered by the right holder from the infringement; where it is difficult to determine the amount of actual losses, the amount of damages may be determined according to the benefits acquired by the infringer from the infringement; where it is difficult to determine the right holder¡¯s losses or the benefits acquired by the infringer, the amount of damages may be a reasonable multiple of the royalties. If the infringement is committed in bad faith with serious circumstances, the amount of damages shall be the amount, but not more than three times the amount, determined in the aforesaid method. The amount of damages shall include reasonable expenses of the right holder for stopping the infringement.

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Where it is difficult to determine the actual losses suffered by the right holder from the infringement, the profits acquired by the infringer from the infringement, or the royalties of the registered trademark, a people¡¯s court may award damages of not more than three million yuan according to the circumstances of the infringement.

Article 64

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Where any goods infringing a right to exclusively use a registered trademark are sold without knowledge of such infringement, and the seller is able to prove that the goods are legally acquired and provide the supplier, the seller shall not be liable for damages.

¢ó. Provisions of the Supreme People¡¯s Court on Issues Concerned in the Trial of Cases of Civil Disputes over the Conflict between Registered Trademark or Enterprise Name with Prior Right

Article 1

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The lawsuit is filed on the ground that a registered trademark used by other party on approved commodities is identical or similar to the prior registered trademark of the plaintiff, the people¡¯s court shall, according to the provision of Article 111 (3) of the Civil Procedure Law, notify the plaintiff to apply with the competent organ for settling the issue. However, in case the lawsuit is filed on the ground that a registered trademark used by other party beyond the approved scope of commodities or by changing the dominant features of the trademark, splitting it or combining it with others is identical or similar to the registered trademark of the plaintiff, the people¡¯s court shall accept it.

¢ô. Interpretation of the Supreme People¡¯s Court on Several Issues Concerning the Application of Laws in the Trial of Cases of Civil Disputes Arising from Trademarks

Article 9

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The term ¡°similar trademarks¡± as provided in Article 52, Item 1 of the Trademark Law refers to that the trademark charged of infringement and the registered trademark of the plaintiff are similar in the font style, pronunciation, meaning of the words, or in the composition and color of the pictures, or in the overall structure of all the elements combined, or in the cubic form or combination of colors so that the relevant general public may be confused about the origin of the commodity or believe that there exist certain connections between the origin and the commodity which is represented by the registered trademark of the plaintiff.

Article 16

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When determining the amount of compensation, the people¡¯s court shall take into comprehensive consideration of the elements, including the nature, duration and aftermaths of the infringing act, the reputation of the trademark, the amount of royalties for licensing the trademark, the type, time and scope of the license of the trademark, as well as the reasonable expenses for stopping the infringing acts, etc.

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Article 17 The reasonable expenses incurred from stopping infringing acts as provided in Article 56, Paragraph 1 of the Trademark Law include the reasonable expenses paid by the right holder or the entrusted agent thereof for investigating into the infringing acts and obtaining evidences.

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¢õ. Civil Procedure Law of the People¡¯s Republic of China

 Article 253 If the person subjected to execution fails to fulfil his obligations with respect to pecuniary payment within the period specified by a judgment or written order or any other legal document, he shall pay double interest on the debt for the belated payment. If the person subjected to execution fails to fulfil his other obligations within the period specified in the judgment or written order or any other legal document, he shall pay a charge for the dilatory fulfilment.

(Author: Chen Yingying of Shanghai Intellectual Property Court)

 


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