CHANG TSI
Insights
Team Member: Tracy Shen, Hermione Zhang, Mia Zhou
This case is a trademark infringement civil lawsuit involving foreign entity. The plaintiffs, Illinois Tool Works Inc. (ITW) and its Chinese subsidiary, ITW Performance Polymers (Wujiang) Co., Ltd., are diversified multinational industrial equipment manufacturers. DEVCON (Chinese brand 得复康) is a key brand in ITW's Performance Polymers segment. Both ITW and its subsidiary attach great importance on intellectual property protection, actively combating counterfeit products and market infringements.
In 2020, during an onsite visit to an end user in Sichuan province, ITW located a large quantity of counterfeit DEVCON products. These counterfeits were sourced from a Sichuan company.
Tracy Shen, Partner of Chang Tsi & Partners, and her team members Hermione Zhang, Mia Zhou entrusted by ITW, filed a complaint with local AIC against the behavior of Sichuan company of selling counterfeits. Through investigation, the infringing products were identified as coming from Sichuan Qinyuan, controlled by Mr. Zhang.
Considering the amounts of counterfeits involving the subject case is high which met the threshold for criminal prosecution under Chinese Criminal Law, Chang Tsi assisted with the PSB to lead to a criminal investigation. In 2023, the People’s Court of Yilong County, Sichuan Province convicted Mr. Zhang and Sichuan Qinyuan of selling goods bearing counterfeit registered trademark, sentencing Mr. Zhang to one year in prison, with a suspended sentence of one year and six months, and imposing fines and confiscating illegal gains.
To seek for civil compensation, ITW and its subsidiary filed a civil lawsuit against the Sichuan company and Sichuan Qinyuan. Chang Tsi thoroughly reviewed the criminal case files, and found that the counterfeits were sold by Shanghai Songze. We successfully petitioned to add Shanghai Songze as a co-defendant. In April 2024, the Intermediate People’s Court of Leshan City ruled in favor of ITW, activities of Shanghai Songze, Mr. Zhang, Sichuan Qinyuan and Sichuan company have constituted trademark infringement against ITW and its subsidiary. And the court ruled the aforesaid Defendants to cease trademark infringement, compensate ITW and its subsidiary CNY 310,000 in total.
As the slogan saying on the Banner ITW presented to the Intermediate People’s Court of Leshan City “裁决英明维权有力，法治昭昭侵权难逃(Wise Judgment, Strong Protection of Rights; Justice Prevails, Infringement Escapes No One)”, the success of this case owe to ITW actively defense of their intellectual property as well as the court’s fairness and diligence to clear that the infringement.
The Leshan Court is committed to creating a good environment that fosters business by fully protecting intellectual property. In this case, the court's panel thoroughly considered the facts, not only holding the defendants already punished for criminal offenses, Mr. Zhang and his controlled company Sichuan Qinyuan, liable for civil compensation, but also extending civil liability to Shanghai Songze, the source of the counterfeit products identified in the criminal trial. This case comprehensively protected the legitimate rights and interests of ITW and its subsidiary, and achieved effective compensation for their losses.
The Leshan Court highly praised the subject case, stating, "The successful of this case has powerfully punished all parties in the chain of infringement and sets a model for assessing civil, administrative, and criminal liability independently in intellectual property cases. It has strengthened public confidence in IP protection and serves as an important reference for similar cases." The case was highlighted in Leshan legal reports, lauding it as "a reflection of enhancing the rule-of-law business environment and ensuring fair justice, embodying the strength and authority of the law." It was widely publicized through various official media platforms, including the official WeChat account of the Leshan Intermediate Court, the official WeChat account of Leshan Zheng Fa, and Sichuan Legal Daily.
