"Hitchhiking" will "roll over"!The infringing party compensated Adolf Company a total of 5 million yuan
In trademark infringement and other intellectual property dispute cases, how to accurately apply punitive damages when the judicial authorities determine the amount of compensation has been widely concerned in the industry. Recently, the Guangzhou Intellectual Property Court concluded the second instance of Guangzhou Adolf Personal Care Products*** hereinafter referred to as Adolf Company) v. Guangzhou Zhuoyun Cosmetics*** hereinafter referred to as Zhuoyun Company), Guangzhou Lingyun Cosmetics*** hereinafter referred to as Lingyun Company), Guangzhou Daofu Personal Care Products*** hereinafter referred to as Daofu Company), Yang and other trademark infringement and unfair competition disputes, determined that the relevant defendants constituted infringement, and applied punitive damages to make a judgment, and finally ordered the infringing party to compensate Adolf Company a total of 5 million yuan.
Sue online sales of similar goods
Adolf was established in July 2013, mainly engaged in the research and development and sales of cleaning and care products and cosmetics.
Zhuoyun Company was established in June 2011, the business scope is commodity wholesale, retail, etc., Yang is the shareholder and legal representative. In September 2017, Mr. Yang applied for registration containing "Mrbee" was later rejected.
Founded in October 2013, Lingyun's business scope is cosmetics and sanitary products wholesale, cosmetics manufacturing, etc.
Founded in January 2019, the company's business scope is commodity wholesale**, Internet commodity sales, cosmetics and hygiene products wholesale, etc.
In October 2019, Adolf Company found that Zhuoyun Company was operating in its **"mrThe "anti-dandruff and anti-itch shampoo" and "gentle and silky shampoo" sold in bee's official *** are suspected of infringing its exclusive right to use its registered trademark. The front of the bottle of the above products is displayed with "Mr.".bee", the front and back of the bottle show a hat and a coat with a frame in front of it ("Mr." is in the framebee" (hereinafter referred to as the "alleged infringing mark"). The back of the bottle is printed with the words "Entrusting Party: Guangzhou Daofu Personal Care Products*** Entrusted Party: Guangzhou Lingyun Cosmetics***" and so on.
Adolf Company believes that the logo used in the above-mentioned products is similar to its two registered trademarks as a whole, and there are only slight differences, which are easy to confuse the relevant public about the goods ** or mistakenly think that there is a specific connection, which is suspected of constituting trademark infringement, and that the use of similar enterprise names by Daofu Company constitutes unfair competition, so it sued Zhuoyun Company, Daofu Company, Lingyun Company and Yang to the Baiyun District People's Court of Guangzhou City, Guangdong Province (hereinafter referred to as the "Baiyun Court"), and requested the application of punitive damages and a claim of 5 million yuan.
Zhuoyun Company and Yang argued that the alleged infringing products prominently used Yang's trademark and copyrighted works, and the black silhouette style was widespread, which was not similar to Adolf's trademark.
Lingyun Company and Dolph Company did not appear in court to make a defense.
Both trials were awarded 5 million yuan
After trial, the Baiyun Court held that the use of the allegedly infringing mark on the allegedly infringing products was sufficient to confuse and misidentify the relevant consumer public, and was an infringement of the exclusive right to use the registered trademark of Adolf. Although Zhuoyun Company and Yang argued that the alleged infringing mark they used was a legally obtained relevant right, the art work they claimed to enjoy the copyright could not oppose the trademark rights that Adolf had previously obtained. The joint production and sales of Daofu Company, Zhuoyun Company and Yang, and the production of the allegedly infringing products by Lingyun Company constitute trademark infringement and should bear the corresponding infringement liability.
The Baiyun Court comprehensively considered the popularity of the registered trademark involved in the case, the subjective fault of the infringer, the form of infringement, the time of infringement, the consequences and other factors, and determined that the compensation amount of Daofu Company, Zhuoyun Company and Yang was 5 million yuan (including reasonable expenses), and Lingyun Company was jointly and severally liable for compensation within the range of 2.5 million yuan for their production behavior. The company compensated 50,000 yuan (including reasonable expenses) for its unfair competition behavior of using the name "Daofu".
After the first-instance judgment was rendered, Zhuoyun Company and Lingyun Company appealed to the Guangzhou Intellectual Property Court, and the main grounds of appeal were that there was no infringement and that the liability for compensation was too high.
After trial, the Guangzhou Intellectual Property Court held that Zhuoyun Company, Daofu Company and Yang constituted malicious infringement and the circumstances were serious, and punitive damages could be applied. According to the sales data calculated by Zhuoyun Company and Yang, the profits obtained by Zhuoyun Company, Yang and Daofu Company from the joint sale of the alleged infringing products were 2.76 million yuan, and the court of second instance selected the infringement profits of 2.73 million yuan as the basis for calculating punitive damages. Adolf's claim for punitive damages to be calculated at twice the rate was considered reasonable by the court of second instance and should be upheld. To sum up, according to the above calculation method, the total amount of compensation of 8.19 million yuan can be obtained, so Adolf Company's claim for compensation for losses and reasonable expenses of 5 million yuan should be fully supported.
The court of second instance held that in the calculation of intellectual property damage data, the quantity calculation method has priority over the statutory compensation, and the quantity calculation method cannot be applied to Lingyun Company to calculate the amount of compensation in this case, so the statutory compensation should be applied to determine the amount of compensation of Lingyun Company. Lingyun Company has carried out the act of jointly producing the allegedly infringing products, and the court should consider punitive factors when applying statutory damages.
In the end, the Guangzhou Intellectual Property Court rejected the appeal and upheld the original judgment.
Raise compensation to curb infringements
As an additional compensation for the infringer who infringes in bad faith and the circumstances are serious, punitive damages for intellectual property rights are applied in conjunction with compensatory damages, which can achieve the function of punishing and deterring the infringer. How to accurately apply punitive damages for intellectual property rights has always been a concern of the industry.
Chen Chunguang, a lawyer at Jiangsu Suxu Law Firm, said in an interview with a reporter from China Intellectual Property News that the case is a typical case of applying punitive damages. First of all, the court of second instance clarified the standard for applying punitive damages, that is, it is subjectively a malicious infringement and objectively reaches the level of "serious circumstances". For the determination of the seriousness of intellectual property infringement, the people's court mainly considers factors such as the means and frequency of infringement, the duration, geographical scope, scale, and consequences of the infringement, and the infringer's conduct in litigation. In this case, the court of second instance found that Zhuoyun Company, Daofu Company, and Yang had committed malicious infringement and that the circumstances were serious, and punitive damages could be appliedHowever, Lingyun Company was entrusted with the production of the allegedly infringing products and collected processing fees in accordance with the contract, and did not carry out or jointly carry out the sale of the allegedly infringing products, so punitive damages were not applicable.
In addition, the court of second instance adopted the method of expounding the calculation method of the total amount of compensation by way of case explanation, that is, when calculating the total amount of compensation, the compensation base of the compensatory damages and the multiple compensation of the punitive damages should be calculated separately, and then the two should be added together to obtain the total amount of compensation claimed by the right holder. Chen Chunguang said that specifically in this case, the total compensation calculated by the court of second instance was as high as 8.19 million yuan, while Adolf Company only claimed 5 million yuan, which did not exceed the total amount of compensation to be compensated, so it was fully supported.
Chen Chunguang said that for the leading enterprises in the industry, when they file a lawsuit for the infringement of their own rights and interests, they should claim high punitive damages from the infringer according to the degree of malice and specific circumstances of the infringement, so that they can play a deterrent role in "rubbing famous brands" and "hitchhiking" and other behaviors and safeguard their legitimate rights and interests. For example, in this case, although Adolf claimed punitive damages in the first instance, it actually claimed the maximum amount of statutory damages (the upper limit of statutory damages is 5 million yuan). If the punitive damages rules are truly followed, even if Adolf Company files a claim of 8.19 million yuan, it can still be supported by law.
*: Intellectual Property News.