Recently, Shanghai Intellectual Property Court has issued the Typical Cases of Shanghai Intellectual Property Court (2016). In this issue of newsletter we shall review the dispute between BMW (BAYERISCHE MOTOREN WERKE AKTIENGESELLSCHAFT) vs. Shanghai Chuangjia Garments Co. Ltd. (hereinafter referred to as Chuangjia Company) etc. for trademark infringement and unfair competition.

Case Brief

BMW is a world famous car manufacturer, with trademarks 、“寶馬”、“BMW” registered on "motor vehicles" and other goods in Class 12, as well as trademarks 、“、“BMW”  on “leather and artificial leather” in Class 18 and clothing, shoes, hats and other goods in Class 25. In July 2008, a natural person Zhou used "宝马"(Chinese version of BMW) and "BMW" as the trade name to establish the Dema Company with the former name of GERMAN BMW GROUP (INTL) HOLDING LIMITED. Subsequently, Dema Company obtained trademarks ”and “in Class 25 through assignment, as well as in Class 25 by registration. Zhou obtained trademark in Class 25 through assignment as well as in Class 25 and in Class 18 by registration. Dema Company and Zhou set up BMN brand franchise system with Chuangjia Company since 2009 by licensing the above mentioned trademarks to Chuangjia Company. Afterwards, during the process of operating the BMN brand franchise system, Dema Company and Chuangjia Company colored the trademarks 、“or used the trademarks 、“and the logo “”, as well as the combination with Chinese version of the company name of GERMAN BMW GROUP (INTL) HOLDING LIMITED, German BMW group, Germany BMW, BMW and other characters and widely used them on brand franchise manual, business premises decoration, advertising promotion, etc. in BMN brand franchise system, as well as clothing, shoes, bags and other goods that they produce and sell, and also developed the franchise system in many provinces and cities nationwide for sales so far.

BMW believed that the acts of Dame Company, Zhou and Chuangjia Company constituted trademark infringement and unfair competition, and requested the court to order Chuangjia Company to stop infringement, eliminate adverse effect as well as jointly compensate for economic losses.

Court Findings

After trial, Shanghai IP Court held that the evidence provided by BMW in this case is sufficient to prove that the registered trademarks ”, "BMW" and "寶馬" have already been well-known trademarks at least since 2007. Knowing that 、“BMW”、“寶馬” are well-known trademarks, Chuangjia Company, Dema Company and Zhou still colluded maliciously and jointly established BMN brand franchise system as well as used the infringing logos by production and sale of the allegedly infringing goods, licensing the BMN brand, advertising promotion and other business activities, which constituted trademark infringement as well as unfair competition.

Therefore, Shanghai IP Court made a judgment that Chuangjia Company, Dema Company and Zhou immediately stop infringement on BMW's exclusive rights on the registered trademarks 、“寶馬”、“BMW”、“and “”,Dema Company shall stop acts of unfair competition of using the Chinese version of GERMAN BMW GROUP (INTL) HOLDING LIMITED, Chuangjia Company, Dema Company and  Zhou shall publish a statement on the newspaper of China Industry & Commerce News, eliminating the impact on BMW caused by infringement act, and that Chuangjia Company, Dema Company and Zhou jointly compensate BMW for the economic losses of 3 million RMB including reasonable expenses. The parties did not appeal after the judgment.

Typical Significance

This is a novel and typical case of trademark infringement and unfair competition dispute with system establishment, full imitation, and comprehensive infringement. This case involves many legal issues, and the infringement acts found have the following obvious characteristics:

1. The accused infringers establish franchise system through trademark assignment, registration, brand name registration, etc. to show the "legitimacy" of its use of the logo, trying to conceal the nature and purpose of the infringement acts.

 2. The accused infringers confuse the public through comprehensive imitation of the right holder’s logos, not only including the infringement act on all the major trademarks of the right holder during the process of business operation, but also including the unfair competition act of trade name infringement and even other infringement acts.

 3. The accused infringers completely imitated the right holder’s logos by division of labor and collaboration, assignment and registration of trademarks and trade names, as well as committed three-dimensional and full range of infringement acts by means of copying infringement through franchise system, etc. with huge impact and serious damage. Therefore, such malicious infringement acts should be severely punished.

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Typical Case Review of Shanghai IP Court—— BMW's Trademark Infringement & Unfair Competition Dispute

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