[Basic Information]

Case No.: (2018) Qiong 01 Civil First Instance No. 520

Plaintiff: Sichuan Renzhong Investment and Management Co.,Ltd

Defendant: Chengdu Shuangbai Catering Management Co.,Ltd Haikou Branch

[Case Brief]

Sichuan Renzhong Investment and Management Co.,Ltd. (hereinafter referred to as “Renzhong”) is a limited liability company, which established on December 2, 2013, with a registered capital of 5 million RMB. In 2017, it obtained the exclusive legal right to use the registered trademark “XIAOLONGKAN” in China. Through continuous promotion activities and publicity, the “XIAOLONGKAN” trademarks enjoy a high market awareness in the whole country. Chengdu Shuangbai Catering Management Co.,Ltd Haikou Branch (hereinafter referred to as “Shuangbai”) was established on October 23, 2017. Renzhong discovered that Shuangbai used the brand mark “XIAOLONGKAN” in its menu, table, bar, wall and so on to promote its goods and sold them. Therefore, Renzhong sued to the court and demanded Shuangbai to cease the infringement act and compensate RMB 1 million yuan for economic loss and RMB 50,000 yuan for reasonable expenditures. Shuangbai pleaded that the first meaning of “XIAOLONGKAN” is as a place name of Chongqiong Province, so “XIAOLONGKAN” cannot be titled as trademark. In addition, Shuangbai had no adverse impact on “XIAOLONGKAN”’s reputation. The court held that since the “XIAOLONGKAN” has become a trademark registered by National Trademark Office, Shuangbai used the word “XIAOLONGKAN” in its decoration, in fact, infringed the exclusive right to use registered trademark enjoyed by Renzhong. Shuangbai clearly knew that its use of the accused marks may seriously mislead consumers and easily cause confusion and mistake of the origin, still refuse to change the mark. Its subjective malice was obvious and the circumstances were serious. Therefore, comprehensively considering the popularity and influence of the trademark, the duration of the infringement, the location and the scale of operation of Shuangbai, and the subject of the infringement, as well as Renzhong implemented evidence preservation and engaged layers in the litigation, the court decided that the amount of compensation and shall be 80, 000 yuan. Finally, the court made a judgment, ordering Shuangbai to cease infringement and compensate to Renzhong RMB 80,000 yuan for economic loss and reasonable expenditure. The defendant was satisfied with the judgment and no appeal.

[Comments]

In recent years, China has intensified its crackdown on infringement on IP, severely punished such infringement as counterfeiting and malicious imitation and strictly applied laws to effectively safeguard the interests of the IP owners and consumers, safeguarded fair market competition. This case is about dispute over infringement of trademark, and the judgment reflects the legislation orientation of increasing the intensity of punishment for illegal infringement of IP rights. In the judgment, the judge detailedly clarified the connotation of “malice” and “serious circumstances” and how to decide the amount of compensation. It will provide reference to the trial of similar cases. Therefore, IP judges handling IP cases should use the rules of evidence to comprehensively and objectively review the evidences on the calculation of compensations, and make full use of logical reasoning and life experience to conduct comprehensive review and judgment on the relevant evidences. Judges should also pay attention to the cooperativeness in calculating compensations by the infringement in means, time and scale. In the application of legal compensations, judges shall specify in as much detail as possible all discretionary factors in actual consideration of ensure the final compensation are reasonable and credible.