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Recently, the Supreme People's Court of China made a final
judgment on a trademark dispute between Honda Motor Company and
Chongqing Hengsheng Xintai Trade Company, Chongqing Hensim Group,
ordering the defendants to immediately cease infringement of Honda
trademarks and indemnify Honda 300,000 yuan in damages.
Honda, a Japanese multinational giant specializing in motorcycle
production, obtained registration for trademarks No. 314940 HONDA,
No.1198975 H and its figure and No.503699 HONDA and its figure in
China, from the Trademark Office of the former State Administration
for Industry and Commerce. In June 2016, China Customs in Ruili
seized outbound motorcycles affixed with the trademark HONDAKIT,
which were manufactured by Hensim Group with the authorization of
Meihua Company and applied for export by Hensheng Xintai Company, a
subsidiary of Hensim Group.
In September 2016, Honda asserted that the two companies had
infringed its trademark right and filed the case to the
Intermediate People's Court of Dehong Dai and Jingpo Autonomous
Prefecture in Yunnan Province, seeking an injunction against the
defendants and three million yuan in damages. The defendants argued
that they were authorized by Meihua to manufacture the products in
question and to use the HONDAKIT trademark. No infringement was
established.
The Court held that the two defendants used HONDAKIT and its
figure on motorcycle hoods, engine covers and nameplates while
protracting the size of the HONDA part, which led to infringement
of the plaintiff's trademarks. Accordingly, the Court made its
first-instance decision, ordering an injunction against the two
defendants and 300,000 yuan in damages.
The Hensim Group and the Hengsheng Xintai company then appealed
to the Yunnan High People's Court in 2017 and requested the
Court to revoke the first-instance judgment and deny Honda's
claims. The two defendants argued that the products involved in the
case were all planned for export to Myanmar and did not enter the
Chinese market. No infringement was established.
After the hearing, the appellate court held that the two
defendants did not infringe the exclusive trademark right of Honda
and revoked the first-instance decision.
The disgruntled Honda appealed to the Supreme People's
Court.
The Court held that the products in question belonged to the
original equipment manufacturer (OEM) and were likely to circulate
back to the Chinese market despite being bound for overseas
markets. With the growth of the Chinese economy, an increasing
number of Chinese consumers tend to travel abroad and may have
access to these OEM products and be confused by their origin. In
this connection, the first-instance ruling Court ascertained the
facts clearly. The Court then revoked the second-instance decision
and upheld the first-instance one in its final judgment, ordering
the two defendants to cease infringement and indemnify Honda
300,000 yuan in damages.
AFD China Newsletter is intended to provide our clients and
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newsletter should not be considered as professional advice, and
should not form the basis of any business decisions.
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