The Shanghai Intellectual Property Court upheld a lower court judgment awarding Huayi Brothers (华谊兄弟公司) punitive damages for trademark infringement since the defendant, Huayi Cinema Era (某时代华谊影城), continued to infringe after being put on notice by a formal notice. and letter of withdrawal. The Shanghai Intellectual Property Court also upheld an injunction and obligation for Huayi Cinema Era to change its name.
According to the Shanghai Intellectual Property Court,
Huayi Brothers Company was established in 2004 and applied for trademark registration “Huayi Brothers” and “Huayi” on service class 41 for film production and showing. Since June 2010, Huayi Brothers has opened cinemas in major cities. In 2014, the mark “Huayi Brothers” was considered as a well-known mark in Class 41 for film and program production services. A Times Huayi cinema was established in December 2017. It is an individual industrial and commercial household.
In June 2019, Huayi Brothers discovered that a Huayi Cinema Era used the “Huayi Cinema” logo in its entity store operation and on WeChat, and used “Huayi International Cinema” on a ticketing platform operated by a certain company for publicity and exploitation, and its cinemas had formed a certain scale and made a high profit. In August of the same year, Huayi Brothers sent a lawyer’s letter to Huayi Cinema Era, asking it to immediately stop infringing its right to exclusive use of the trademark and unfair competition, to change the name of the company, to issue a public apology and compensate 4 million RMB for the economic losses. Huayi Cinema Era sued for the infringement after receiving the lawyer’s letter. Therefore, Huayi Brothers filed a lawsuit on the grounds that the aforementioned acts of Huayi Cinema Era constituted trademark infringement and unfair competition, compelling Huayi Cinema Era to terminate the infringement and unfair competition, change the name of the company and to claim punitive damages. of RMB 4 million and reasonable rights protection expenses of RMB 35,000.
The court of first instance held that: since film production was closely related to the upstream and downstream of the film projection industry, and the trademark “Huayi” in the trademark in question had a reputation relatively high, the use of logos such as “Huayi” by Huayi Cinema Era in its services may lead the relevant public to mistake it with a special relationship with Huayi Brothers Studio when browsing WeChat account, buying tickets online , goes to the cinema to watch movies and consumes food and drink. This easily caused confusion, so the aforementioned act constituted a violation of the exclusive right to use the trademark of Huayi Brothers Corporation. Without any justifiable reason, Huayi Cinema Era used the registered trademark of Huayi Brothers Company as a trade name in its company name, which was obviously a malicious freeriding on the goodwill of Huayi Brother and misled the concerned public, therefore, his act was determined to constitute unfair competition. . The trial court determined the trademark license fee based on Huayi Cinema Era’s subjective intent and infringement, and applied the punitive damages three times based on the said amount. It ruled that Huayi Cinema Era must immediately stop the trademark infringement and unfair competition, change the company name, and compensate for economic losses and reasonable defense expenses totaling more than RMB 930,000.
Huayi Cinema Era refused to accept the judgment and appealed. The Shanghai Intellectual Property Court, as a court of second instance, dismissed the appeal and upheld the original judgment.
The Shanghai Intellectual Property Court explained the decision,
When applying punitive damages for infringement of intellectual property rights in accordance with the provisions of relevant judicial interpretations, factors such as the type of subject matter infringed, the rights status of the subject, the popularity of the affected product and the relationship between the defendant and the plaintiff must be taken into consideration in determining the intentionality of the infringement.
If the defendant continues to commit the infringement after being notified and warned by the plaintiff, it can be determined that the defendant intends to infringe the intellectual property right.
In this case, the Huayi Brothers trademark has achieved great popularity and Huayi Cinema Era should be aware of this and under these circumstances, Huayi Cinema Era has always infringed the relatively well-known trademark of Huayi Brothers when providing services.
In addition, Huayi Cinema Era continued to operate cinemas after the trademark owner provided infringement notice.
In conclusion, Huayi Cinema Era’s infringement was judged to be subjectively malicious.
Pursuing infringement after receiving notice from the trademark owner is an important consideration in determining the defendant’s subjective intent and the defendant should bear legal liability for intentional infringement.
In the end, the court applied punitive damages, with the amount of punitive damages determined at three times the royalty for the trademark license. In judicial practice, some tortfeasors proceed with their offense without heeding the opinion of rightsholders such as the lawyer’s letter. In view of the above circumstances, the judgment of this case is significant. The attorney’s letter and other notices given by the trademark owner are important considerations in judging the application of subjective intent for punitive damages and should not be ignored by the infringer. Therefore, the infringer shall, upon receipt of notice from the trademark owner, take timely action to avoid possible further infringement.
The full announcement is available here (in Chinese only).
© 2022 Schwegman, Lundberg & Woessner, PA All rights reserved.National Law Review, Volume XII, Number 258