Trial Docket: (2014) Yi Zhong Min Chu Zi No. 1704
City of Beijing
[Headnotes]
If a company registers its company name in Hong Kong which contains a registered trademark in mainland China of a third party as its trade name, but the use of company name in mainland China would mislead the public, both the company itself and the manufacturer of the products bearing the company name constitute unfair competition.
Considering factors such as the popularity of plaintiff's trademark and product, the duration and scale of the infringement, the maliciousness of imitating, the defendant's rejection to provide financial books and materials related to the infringement and so on, the court decides the amount of compensation at its discretion and wholly supports the plaintiff's claim for compensation of four million Yuan.
[Synopsis]
Plaintiff: Kimberly-Clark Worldwide. Inc.
Defendants: Hunan Sophie Sanitary Products Co., Ltd and Korea Haoqi Children Products Co., Ltd.
Kimberly-Clark Worldwide., Inc. was founded in the United States in 1872, who is the exclusive owner of the trademark no. 619312 "好奇", the trademark no. 619311 "HAOQI", the trademark no. 602376 "HUGGIES" and etc. The aforementioned trademarks are designated in the goods of "disposable baby pants, diaper" and other products. The infringing goods are manufactured and sold by Hunan Sophie Sanitary Products Co., Ltd, the packaging of which is marked with trademark "HAOQIHAODONG" and "好奇好动" and expressions of "韩国好奇儿童用品有限公司授权出品" (authorized by Korea Haoqi Children Products Co., Ltd.).
Kimberly-Clark Worldwide., Inc. claimed that Hunan Sophie Sanitary Products Co., Ltd (Hunan Sophie Company) and Korea Haoqi Children Products Co., Ltd (Korea Haoqi Company) had violated the exclusive right of registered trademarks and constituted unfair competition by using the same or similar trademark, trade name and product packaging as Kimberly-Clark Worldwide., Inc. requesting the court to order: 1. Hunan Sophie Company and Korea Haoqi Company immediately stop infringing trademark rights and unfair competition conduct. 2. Two defendants jointly compensate the plaintiff pecuniary loss of four million Yuan and reasonable cost of 109,925 Yuan. 3. Two defendants should publish a statement in China Intellectual Property Newspaper, Taobao and other websites, to eliminate the impact.
The court held that:
(1) The accused conducts of defendant I- Hunan Sophie Company constitute trademark infringement and unfair competition. The defendant Hunan Sophie Company, without the authorization of plaintiff, manufactured and sold paper diapers bearing trademark "HAOQIHAODONG" and "好奇好动", which were similar to the plaintiff's registered trademarks such as "HAOQI" on like products, used company name "韩国好奇儿童用品有限公司授权出品" which contains the plaintiff's registered trademark "好奇", used packaging similar to plaintiff's specific packaging for its well-known products, used marks similar to plaintiff's registered trademarks such as "HAOQI" when advertising and promoting on Marco Polo official website. The aforementioned conducts of Hunan Sophie Company would cause confusion and misidentification about the source of the products among the relevant public, which constitute trademark infringement and unfair competition.
(2) The accused conducts of defendant II- Korea Haoqi Company constitute trademark infringement and unfair competition. Although Korea Haoqi Company was registered in Hong Kong, it used plaintiff's registered trademark "HAOQI" in its company name and its actual use in mainland China is likely to cause confusion and misidentification among the relevant public, which has constituted unfair competition. In view that defendant II is the franchisor of infringement products, defendant I's conduct of manufacturing and selling products and using product's packaging can be treated as defendant II's. Therefore defendant I I also constitutes trademark infringement and unfair competition.
As for the liabilities of compensation, judge's comment:
When deciding the amount of compensation, the court synthetically considers factors such as fact, nature, impact scale, degree etc. of the infringement conduct of Hunan Sophie Company and Korea Haoqi Company. In view of the fact that the series trademark "HAOQI" and related products of the plaintiff have high popularity all over the world, Hunan Sophie Company and Korea Haoqi Company as business operators in the same industry should know it. Besides, Korea Haoqi Company has received a restraining order issued by the High Court of Hong Kong. Hunan Sophie Company has been punished by administrative departments of Commerce and Industry before. Even after being sued for trademark infringement and unfair competition by the plaintiff, the defendants still continue their infringements. Obviously, the two defendants have malicious intents in imitating plaintiff and make use of the high popularity of plaintiff. What' more, Hunan Sophie Company rejected to provide financial books and relevant materials after court required. So the court decides the amount of pecuniary loss referred to the plaintiff's claims. Concerning reasonable cost for stopping the infringement, court also supports.
The court judgment: (1) Hunan Sophie Company and Korea Haoqi Company shall immediately stop trademark infringement and unfair competition. (2) Hunan Sophie Company and Korea Haoqi Company shall jointly compensate Kimberly International Inc. pecuniary loss of four million Yuan and reasonable cost of 109,925 Yuan. (3) Two defendants shall publish a statement in official websites of Marco Polo, Taobao and Alibaba to eliminate the impact.
[Judge's Comment]
The typical point of this case is the court holds that the use of an extraterritorial company name in mainland China still constitutes unfair competition and wholly supports the high compensation claim of plaintiff.
(1) The use of an extraterritorial company name in mainland China still subjects to Chinese law. The protection of intellectual property right is regional. Even though a company registered its name in Hong Kong, it still may constitute unfair competition according to Chinese Law if the company name is used in mainland China and causes confusion and misidentification among public. The extraterritorial company itself definitely constitutes unfair competi t ion. However, to decide whether a mainland company using an extraterritorial company name in the products it manufactured constitutes unfair competition or not, we can consider the relationship of mainland company and extraterritor ial company, and subjective fault of the mainland company. In this case, in view that Hunan Sophie Company is related to Korea Haoqi Company, and obvious bad faith of imitating is existed, so the use of company name "Korea Haoqi Children Products Co., Ltd" by Hunan Sophie Company shows its malicious intent to cause confusion in public. This conduct also constitutes unfair competition.
(2) The court wholly supports the high compensation claim aiming at protecting well-known trademarks and products, as well as penalizing malicious infringement.Owners of intellectual property rights have been in troubles for years because of the low cost of infringement and the difficulties of protecting right. Recently, harsher punishment for infringement of intellectual property right has become the focus of intellectual property legislation, judicial and administrative work. In this case, the judges take account of not only the high popularity of plaintiff's trademark and products, but also the continuous infringement conducts and malicious intent of imitating, the rejection of offering financial books and relevant materials, etc. while deciding the pecuniary compensation of four million Yuan.
There are many similar mainland companies make use of extraterritorial companies to proceed infringement conduct secretly and imitating wellknown brands to mislead public in bad faith. While the intellectual property right is protected independently and regionally, such conduct shall not successfully exempt from domestic legal sanctions by wearing an appearance of legality. Increasing penalties of infringement conducts and manifesting the determination of intellectual property protection has become an inevitable choice of Chinese court.