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.

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