This case is a typical example of a domestic "counterfeit" brand exploiting the reputation of an internationally renowned brand to gain unfair benefits.

The plaintiff is a well-known producer and seller of jeans, and its "LEE" brand has earned high fame both as a trademark and a trade name. Defendant opened three online stores on Taobao to sell infringing clothing with the brand “LEEABOUTE”.

The plaintiff filed a civil lawsuit with the Yuhang District Court in Hangzhou City through Chang Tsi & Partners. Upon trial, the court found that the defendants' actions constituted an infringement on the plaintiff's exclusive rights to the registered trademarks and also infringed on the plaintiff's trade name rights, which have a certain level of influence, and constituted unfair competition through false advertising. Due to the defendants' obvious malicious intent and severe infringement circumstances, the court awarded punitive damages of twice the amount, totaling CNY 5.1 million. Eventually, a final claim of CNY 3.15 million made by the plaintiff was supported by the court.

Case Overview

In 2022, we discovered that at least three stores on Taobao were selling infringing clothing bearing with over 10,000 pieces per month during the Double Eleven shopping festival. The investigation found that a Hong Kong shell company had pre-registered the trademark "LEEABOUTE" and transferred it to a Chinese individual. However, the mark actually used is very different from the trademark registered by the infringer and very similar to the well-known trademark of the plaintiff.

During the investigation, we found that the infringer's warehouse had a large amount of infringing products in stock and filed an administrative complaint. After receiving the complaint, the defendant briefly removed the infringing goods. However, the same trick was repeated soon after. Subsequently, the plaintiff commissioned Chang Tsi & Partners to file a civil lawsuit for trademark infringement and unfair competition, requesting compensation for operating losses and reasonable expenses totaling ￥3.15 million. At the same time, the plaintiff filed an invalid declaration of the copycat trademark "LEEABOUTE", and the State Intellectual Property Office ruled that the trademark was invalid in November 2023. According to Article 47.1, of the PRC Trademark Law, the trademark should be considered void from the outset.

Regarding the civil litigation, the Yuhang District Court of Hangzhou made a judgment of first instance, concluding as follows:

The "LEEABOUTE" was found to be similar to the plaintiff's LEE trademark, which could easily lead to consumer confusion and constitute trademark infringement.

At the same time, "LEE" was identified as a well-known trade name of the plaintiff company, and CAI's use of "LEEABOUTE" in the store name and commodity name constituted unfair competition. CAI used misleading photos in the publicity page, constituting false propaganda.

One of the key issues of this case, the defendant store has more than a thousand infringing goods, the plaintiff can not all notarized purchase. Through a series of notary and evidentiary strategies, the plaintiff successfully persuaded the court that all goods containing the word "LEE" in the name of the goods are infringing goods.

In deciding whether to apply punitive damages and the multiplier, the court considered the plaintiff's LEE brand's reputation and influence, the defendant's malicious intent, the large scale of the infringement, and the severity of the circumstances, and decided to apply punitive damages with a multiplier of 1, and eventually agreed the plaintiff's economic compensation of ￥3.15 million.

Significance

This case is a typical intellectual property litigation involving trademark infringement and unfair competition, the court fully supported the plaintiff's claims and applied punitive damages to the defendant. The fair judgment in this case demonstrates the court's commitment to equal protection for domestic and foreign enterprises, which helps to maintain the order of trademark registration and fair competition, thus creating a friendly business environment. In addition, the success of this case undoubtedly strengthens the confidence of foreign brand owners in the continuous monitoring and combating of infringements, and encourage foreign firms to actively defend their rights and increase investment in China. At the same time, we hope that the punitive damages in this case will serve as a deterrent to other potential infringers.