CHANG TSI
Insights
O2 PARTNERS, LLC, a renowned American company, is one of the many well-known enterprises that receive comprehensive intellectual property services from attorney Tracy Shen and her team at ChangTsi. In 2024, Tracy and her team represented O2 PARTNERS, LLCin a trademark infringement lawsuit against an operator on the Pinduoduo platform. Recently, the Xuhui District People's Court in Shanghai issued a first-instance judgment (which has become effective as the defendant did not appeal), fully supporting the plaintiff's claims. The court recognized the high reputation of O2 PARTNERS, LLC's "ORTHOLITE" trademark in the footwear and shoe materials industry, confirmed the defendant's use of multiple trademarks as infringement, and awarded one-time punitive damages, compensating the client nearly CNY 2.6 million for economic losses. Additionally, the court ordered a statement to be published in the "China Intellectual Property News" to mitigate the negative impact on the client's trademark and reputation.
O2 PARTNERS, LLC is a globally recognized supplier of insoles, with over 400 well-known athletic footwear brands choosing ORTHOLITE insoles and foam for manufacturing insoles, including more than half of the top brands in the footwear industry. During ongoing IP protection services for this client, Tracy's team noticed a large number of counterfeit ORTHOLITE products being sold on different online platforms such as the Pinduoduo. These counterfeit products, with inferior quality and lower prices, severely impacted the client's brand reputation and market share. After thorough investigation and analysis, Tracy's team identified the defendant and persuaded the client to initiate the lawsuit. The defendant had applied for trademarks highly similar to the client's and used multiple identical and similar trademarks to promote and sell counterfeit insoles. Upon authorization, Tracy's team quickly conducted fact-finding and evidence collection, employing a comprehensive strategy that included trademark invalidation declaration, civil litigation, and out-of-court negotiations, ultimately achieving a complete victory for the client.
Since ORTHOLITE insoles are often embedded inside shoes and primarily sold to B2B clients, it was a challenge to demonstrate the direct impact on end consumers. To thoroughly prove the high reputation and influence of the ORTHOLITE trademark in the footwear materials industry, Tracy's team collaborated with the client to gather extensive sales evidence showing their supply to numerous brand shoe manufacturers. Additionally, they collected widespread promotional and sales evidence from multiple channels. This effort resulted in a comprehensive evidence chain illustrating the trademark's impact from B2B to B2C markets, effectively countering the defendant's arguments regarding market differences and the lack of trademark distinctiveness. Ultimately, they successfully proved that the ORTHOLITE trademark is well-known in the fields of athletic and outdoor footwear, both as a supplier to major brand manufacturers and directly to consumers.
During the litigation, to prevent further damage from the defendant's ongoing infringement, measures such as selecting the defendants and applying for property preservation were taken to stop the infringing activities promptly. Pre-litigation, the team filed for invalidation of the defendant's OROTHERS trademark to counter potential defenses of "use of registered trademarks" and successfully invalidated the defendant's trademark in the relevant subclass during the litigation. Through detailed presentation of evidence and court statements, Tracy's team proved that the defendant's all used trademarks constitute identical/similar to ORTHOLITE, leading to the recognition of multiple instances of trademark infringements.
Tracy's team also conducted extensive information collection and developed a refined calculation model to determine the compensation base, laying a solid foundation for the application of punitive damages. By submitting sales statistics for each infringing link, sales prices of identical products from factory stores on multiple platforms, and carefully selecting the number of reviews as sales volumes and higher sales prices of identical products as cost prices, the team effectively countered the defendant's arguments that inflated sales figures should not be included in the calculation of compensation and that there were other costs involved. This ensured that the application of punitive damages had an accurate and reasonable calculation basis. Furthermore, by detailing the plaintiff's trademark reputation, the scale of the defendant's infringement, the profits gained from the infringement, and the defendant's attempts to register marks similar to the plaintiff's, they ultimately demonstrated that the application of punitive damages was legally and reasonably justified.
This case marks the first trademark infringement civil lawsuit for O2 PARTNERS, LLC in China. As a globally leading insole brand, ORTHOLITE's victory not only enhances its brand recognition in the Chinese market but also lays a solid foundation for further market expansion in China.
Notably, the judgment supported almost all of the client's claims and applied punitive damages to regulate the defendant's infringing behavior. This not only effectively maintained the client's brand image in the Chinese market but also served as a strong deterrent to other existing or potential infringers. This case showcases ChangTsi's professional expertise and strategic acumen in intellectual property protection, highlighting the firm's ability to provide exceptional legal services to its clients.
