Case brief:

In 2008, Fila Sports Co., Ltd. (hereinafter referred to as Fila Company) was authorized to obtain the only legal right to use the "FILA" series of registered trademarks in China. Through continuous commercial promotion and publicity, the "FILA" series of registered trademarks have high reputation at home and abroad. In June 2016, Fila Company found that Zhejiang Zhongyuan Shoes Co., Ltd. (hereinafter referred to as Zhongyuan Shoes Company) on online and offline physical stores, and Wenzhou Unique E-commerce Co., Ltd. (hereinafter referred to as Unique Company) on online network sales platform such as JDcom opened "GFLA Flagship Store" and "GFLA Official Flagship Store", publicized the footwear products displayed and sold, and used trademark signs and similar to the "FILA" series of registered trademarks held by Fila Company. Liu, as the former legal representative of Zhongyuan Shoes Company, the legal representative of Unique Company, and the registrant of "GFLA 杰飞乐" and other trademarks, participated in the above production, sales and publicity activities. Fila Company requested to order the three defendants to stop infringement, compensate economic losses of 9 million yuan and reasonable expenses of 410000 yuan.

The court of first instance held that the use of the " " logo, the marking of "飛樂 (China)" on the sued products, and the use of the logos  and  on the website by Zhongyuan Shoes Company and Unique Company infringed the trademark rights of "FILA" series of trademark enjoyed by Fila Company. As operators of similar products, Zhongyuan Shoes Company and Unique Company should know the popularity of the trademark of Fila Company. They prominently used logos similar to the trademark involved on the products they produce, and sold them on multiple online sales platforms, with huge sales amounts. Meanwhile, as early as July 19, 2010, the Trademark Office rejected the application for registration of the trademark on "clothing, headgear, footwear" on the ground that No. 7682295 trademark " " was similar to No. G691003A trademark " " of Fila Company. At this time, the three defendants had been fully aware of the "FILA" series of trademarks registered by Fila Company previously, and continued to produce and sell the infringed products in the case of being aware that use of the sued logo might lead to confusion and misunderstanding of the source of products, the subjective malice was obvious, and the infringement was serious, and punitive damages shall be applied. Considering that Zhongyuan Shoes Company has three brands, but no evidence has been provided to prove the sales volume and profit of each brand, it is presumed that the operating profit of the sued products accounts for 1/3 of the total. Based on this, it is calculated that Zhongyuan Shoes Company's operating profit from infringement in 2015 and 2016 is 2638322 yuan, and a judgment is made that amount of compensation is determined to be 7.91 million yuan according to 3 times of the operating profit. The appeal was rejected in the second instance and the original judgment was upheld.

Typical significance:

This case is a typical case where it is determined that there is willful infringement in the application of punitive damages due to the infringer knowing the trademark right of the registrant in the trademark authorization procedure but still committing infringement.

(Source of case: Beijing Higher People's Court)