Fendi Wins Trademark Infringement Case in China
On July 28, 2017, the Shanghai IP Court delivered its final judgment concerning a trademark infringement and unfair competition dispute involving luxury brand “FENDI”.
Case Title: Fendi Adele S.R.L. v. Shanghai Yi Lang International Trade Co., Ltd, Capital Outlets (Kunshan) Business
Development Co., Ltd
Court: Shanghai IP Court
Date of Decision: July 28, 2017
Area of Law: Trademark, Unfair Competition
Significance of Decision: 1) The two defendants were ordered to immediately cease their infringement of the trademark right No. G1130243 “FENDI” as well as the unfair competitive behavior of unauthorized use of Fendi Adele S.R.L. (“Fendi”)’s trade name“ Fendi”; 2) the two defendants were also ordered to compensate Fendi economical loss and reasonable expense amount to RMB 350,000 Yuan.
The said judgment partially withdrew the first instance judgment made by the Shanghai Pudong New District People’s Court, and ordered the two defendants, Shanghai Yi Lang International Trade Co., Ltd (Yi Lang) and Capital Outlets (Kunshan) Business Development Co., Ltd (Capital Outlets) to immediately cease their infringement of the trademark right No. G1130243 “FENDI” as well as the unfair competitive behavior of unauthorized use of Fendi Adele S.R.L. (“Fendi”)’s trade name“Fendi”. Furthermore, the two defendants were also ordered to compensate Fendi economical loss and reasonable expense amount to RMB 350,000 Yuan.
Fendi filed a lawsuit to the Shanghai Pudong New District People’s Court in 2016 against the two defendants, on the ground that it considered that they infringed its trademark rights and trade name by using them on shop sign, outside wall instruction board, discounting information instruction board, shop decoration, sales receipt, shopping bag as well as the brochures and the like thereof. Nevertheless, the said first instance court determined that such use fell into the category of reasonable use of trademark in order to state their products or services provided, since the FENDI products sold in the defendant’s shop were authentic; and therefore, it rejected Fendi’s requests. Due to dissatisfaction of the said first instance judgment, Fendi appealed to the Shanghai IP Court.
Upon trial, the Shanghai IP Court considered that it shall fulfill conditions as follows to determine whether it constitutes reasonable use of a trademark: 1) such use is in good faith and reasonable, and does not use other’s trademark as its own trademark of goods or service; 2) such use is necessary, which is merely stating or describing within the scope of its operated goods; 3) such use will not cause any confusion nor misidentification among the relevant public. However, in the current case, the use of “FENDI” logo on the shop sign along was sufficient to result in a conclusion by the relevant public with normal attention that the involved shop was operated by Fendi or operated upon authorization by Fendi. Not to mention it was supported by the new evidence provided by Fendi during the second instance trial, which was a notarized questionnaire showing that 29 out of 42 interviewees considered that the involved shop was a directly operating shop or an authorized shop of Fendi. Thus, the Shanghai IP Court determined that the use of “FENDI” logo on the involved shop sign was not reasonable use in good faith. In addition, the Shanghai IP Court determined that such use on the shop sign by Yi Lang, also infringed the trademark right of No. G1130243 “FENDI” in class 35, as well as the trade name “FENDI”, and therefore, Yi Lang should be liable for the relevant civil liability. With respect to the Capital Outletswho was the operator and manager of the outlets where the involved shop is located, it shall also bear joint liability with Yi Lang, on the ground that it did not specify the identity of the involved shop operated by Yi Lang to consumers, which led to confusion and misidentification among relevant consumers that the involved shop was operated or authorized to be operated by Fendi. In other words, the Capital Outlets provided assistance and convenience to the Yi Lang’s trademark infringement and unfair competition, and therefore, it shall bear the joint liability with Yi Lang.
In conclusion, the two defendants, both the Yi Lang and the Capital Outlets shall not only immediately cease their infringement of Fendi’s No. G1130243 mark and unfair competing behavior to the trade name thereof, but also compensating RMB 350,000 as economical loss (including reasonable expense) to Fendi.
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Fei Dang and Matthew Murphy are with the MMLC Group.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.