SEVERE PENALTY FOR INTENTIONALLY REPEATING INFRINGEMENT

[Judgement Sharing CN01] Final Civil Judgement No.85 Hu 73 of Shanghai Intellectual Property Court (2017)

Brief Description of the Legal Case

In September 2003, a Japanese company Kanatsu Co. Ltd. (hereinafter referred to as “Kanatsu”) registered the trademark “Silent” in China. The trademark is still within the valid period of registration.

 Between 2009 and 2013, Shanghai LianHe Industrial Vehicle Equipment Co., Ltd. (hereinafter referred to as “LianHe Industry”) and Shanghai LianHe Hardware Machinery Co., Ltd. (hereinafter referred to as “LianHe Hardware”) were adjudicated to cease infringement on the right of exclusive use of the trademark “Silent” of Kanatsu, unfair competition, and pay for damages.

In November 2015, LianHe Industry introduced its trolley products using the trademark “Silent” without authorization, and announced that “LianHe Industry is a Sino-Japanese joint venture, ….. and the trademark “Silent” has received registration…..” Once again, Kanatsu sued LianHe Industry for infringing the right of exclusive use of the trademark “Silent” and undertaking unfair competition.

Summary of Judgements

The court of first instance deemed that LianHe Industry infringed the right of exclusive use of the trademark of Kanatsu, and that the statement on its webpage is an untrue and misleading announcement. As a consequence, the court adjudicated LianHe Industry to cease infringement and unfair competition immediately, and to  compensate Kanatsu for economic losses and reasonable expenses of  thirty thousand dollars.

Kanatsu refused to accept the judgment of the court of first instance and filed an appeal. The court of second instance deemed that the usage of the trademark “Silent” on LianHe Industry’s website pertains to the regulation of trademark law. Although LianHe Industry defended that “Silent” is a description of the performance of its trolleys, but in fact the trademark examination committee had adjudicated to maintain the trademark in 2012. LianHe Industry was fully aware of the adjudication; however, LianHe Industry still used the trademark “Silent” of Kanatsu on its website, by which infringement is obviously intentional.

Moreover, in 2009, LianHe Hardware was adjudicated to cease infringement and pay damages for the same infringement as in the latter case. Knowing perfectly well the infringement of its related LianHe Hardware and the judgement of the infringement, LianHe Industry still undertook the same infringement. Therefore, the infringement in the latter case is obviously intentionally repeated. Thus, the court of second instance adjudicated that LianHe Industry must pay one hundred twenty thousand dollars for the damage according to the regulations.

Analysis

The argumentative issues in the second instance of this case include:

1. Whether the infringement of LianHe Industry is a repeated infringement.

2.  Whether the compensation decided by the court of first instance is rational.

About the first issue

The webpages of LianHe Industry clearly presented the management information of LianHe Industry. Therefore, without counterevidence, it is proven that the infringement information in the webpages is published by LianHe Industry. Although the court of first instance deemed that the behavior of LianHe Industry constituted an infringement of the trademark and unfair competition, the behavior of LianHe Industry was not deemed a repeated infringement. Considering the infringer once again conducted the same behavior as in the preceding judgment, the accused behavior should constitute a repeated infringement.

About the second issue

Since the behavior of LianHe Industry was deemed to constitute a repeated infringement, the penalty of the infringer should be increased to effectively protect the rights of the claimant. Insubstantial compensation may lead to repeated infringements.