Burberry is a British luxury fashion house headquartered in London. It designs and distributes ready to wear including trench coats (for which it is most famous), leather goods, footwear, etc. The most iconic Burberry check pattern has been in use as a lining in its trench coats since 1920.
Recently, in the process of examining a trademark infringement and unfair competition dispute, based on the request from the plaintiff Burberry Limited, the Suzhou Intermediate People's Court issued a rare preliminary injunction against defendants, namely 1) Xinboli Trading (Shanghai) Co., Ltd., 2) Shentu Clothing (Shanghai) Co., Ltd., 3) Kunshan Development Zone Peng Yazhong Clothing Storeand 4) PENG Yazhong (natural person), which were prohibited from using the alleged infringement trademarks to conduct business operations.
According to Article 100 of Civil Procedure Law of the People's Republic of China, in the event that the judgment on the case may become impossible to enforce or such judgment may cause damage to a party because of the conduct of the other party to the case or because of any other reason, the People's Court may, upon the request of the said party, order the preservation of the property of the other party, specific performance or injunction.
When deciding whether to grant the preliminary injunction, it is necessary to comprehensively consider many factors mainly including the stability of rights, the possibility of infringement, the necessity of preservation, the situation of urgency (so called periculum in mora) and the balance of both parties' interests.
In this case, the reason why the Suzhou Intermediate People's Court made the injunction was based on the following considerations:
Malicious copying and imitation prove the likelihood of infringement
"BURBERRY" and "" owned by Burberry has been recognized as well-known to the Chinese consumers several times. The use of the disputed trademarks "BANEBERRY" and "" are highly suspected of copying and imitating the well-known trademarks.
Also, the patterns used on the alleged infringing products are suspected of constituting an infringement against the plaintiff's registered trademarks of " " and "".
The screenshot of Xinboli website. Source: https://www.baneberry.net/
In addition, the defendants used similar logos in their operations and claimed that the brand "originated from Jermyn Street, England, and its most symbolic 'British check' is a classic element in the fashion industry" and other publicity terms. The above behaviors were also identified as constituting unfair competition to a large extent.
Injunction is of 'real urgency'
Firstly, the BANEBERRY's physical stores have expanded rapidly over the past year, opening more than 40 stores within one and a half year, which is close to the number of Burberry's exclusive stores in China.
Most BANEBERRY stores are located in large shopping malls or outlets in first-tier and second-tier cities of China, while online channels have also been rapidly extended to multiple e-commerce platforms such as T-Mall, WeChat, Pinduoduo. Obviously, this kind of expansion will continue to squeeze the market share of Burberry.
Secondly, the alleged infringement behavior is a full-scale imitation of Burberry, which can easily raise confusion among the markets. Failure to take immediate measures will detract from the Burberry's goodwill and weaken the distinctiveness of Burberry's well-known trademark.
Thirdly, when requesting the preservation, it was the golden period of clothing sales during the Spring Festival holiday. Since the defendants already has a certain sales scale, failure to take immediate measures will not only cause the squeeze in market share, but also increase the cost of rights protection on Burberry. Therefore, it is urgent to order to stop the alleged infringement.
The advantages of involving act preservation outweigh the disadvantages
Burberry has already enjoyed high reputation. Its rights are stable and part of trademarks are recognized as well-known for several times. The defendant is likely to constitute an infringement. The possible damage to the defendant caused by the preservation is controllable.
On the contrary, if not ruling preservation decision, it may cause irreparable damage to the plaintiff and cause consumer confusion.
Taking act preservation measures will be favor to protect the public interest
The evidence in this case shows that the alleged infringement results in a large number of consumer complaints. Therefore, ordering the defendant to stop the relevant act is favor to maintain the normal market transaction order and the consumers' interests.
The plaintiff provided corresponding guarantees
The court ordered the plaintiff to provide corresponding guarantees. At the same time, during the execution of the injection, if there is evidence that the defendant causes greater losses by stopping relevant act, the court shall order the plaintiff to increase corresponding guarantees.
Based on the above considerations, the court supported the plaintiff's application and issued the preliminary injunction in a timely manner. In details:
- Xinboli Trading (Shanghai) Co., Ltd. shall immediately stop using the "BANEBERRY" and "" trademarks, and cease production and sales of products bearing identical or similar pattern of trademarks "" and "".
- Shentu Clothing (Shanghai) Co., Ltd. and Kunshan Development Zone Peng Yazhong Clothing Store shall immediately stop selling the products bearing the aforementioned trademarks and identical or similar pattern.
- Xinboli Trading (Shanghai) Co., Ltd. shall immediately stop using the " " logo on its product tags, and cease to declare in its business activities that "BANEBERRY" originated from Jemin Street, London, and its most symbolic "British check is a classic element of the fashion industry" and other publicity behaviors.
The preliminary injunction is a temporary measure to remedy infringement of IP rights, which has the function of "timely rain" for rights protection.
In term of the regulation, act preservation is defined in Chinese IP laws. However, preliminary injunctions are much rarer applied since many issues shall be taken into consideration in actual ruling. The permanent injunctions are common in China in IP infringement cases.
|Article 68 of Patent Law||Right holders or interested parties who have evidence to prove that others are committing or about to commit an infringement against patent rights, and if they are not promptly stopped, their legal rights and interests will be irreparably damaged, they can apply to the People's Court for an order to stop the relevant behaviors before the lawsuit.|
|Article 65 of Trademark Law||Where a trademark registrant or any interested party could prove that the infringement in process or to be conducted on the exclusive right to use the registered trademark will cause irretrievable losses to their legal interests if lack of prevention in a timely manner, they may apply to the People's Court for taking such measures as ordering the infringer to cease relevant behaviors and property preservation before filing any lawsuit.|
|Article 50 of Copyright Law||In order to stop the infringement, in the case of evidence may be lost or difficult to obtain in the future, the copyright owner or the copyright-related right owner may apply to the People's Court to preserve the evidence before the lawsuit.|
As the issuance of "Provisions of the Supreme People's Court on Several Issues concerning the Application of Law in Examining Cases Involving Act Preservation in Intellectual Property Disputes" on December 12, 2018 and later taking effective on January 1, 2019, it provides a clearer legal basis for the implementation of preservation in IP disputes.
Under the background of strengthening the protection of Chinese IPs, we can see the Courtis suggested to be more incline toward injunctions from the supports on Burberry case.
Even if the evidence collection is not easy to be done, we believe applying for the preliminary injunction in the case of real urgency and necessity could be a good measure for the IP disputes in the future.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.