Following a win in the 1st instance (see https://www.mondaq.com/china/trademark/1032398/wyeth-awarded-rmb-3055-million-by-hangzhou-court), Wyeth LLC won again in the 2nd instance on 2021's World IP Day, against Guangzhou Wyeth Baby Products Ltd for trademark infringement and unfair competition. Both courts at two levels fully supported Wyeth's claim, i.e., CNY 30.55 million (~USD 4.7 million). However, the 1st and 2nd instance courts have different views on how punitive damages should be calculated.
The Hangzhou Intermediate People's Court as the 1st instance found willful infringement and triple damages should be awarded as punitive damages, and calculated that the total damages were 3 times the profits of the defendant obtained from the infringement. Although the Zhejiang High People's Court as the 2nd instance agreed to triple damages as the punitive damages determined by the 1st instance court, it held that the total damages should be the defendant's infringement profits plus 3 times the defendant's infringement profits as punitive damages. In other words, the final total damages are 4 times the infringer's illegal profits.
This decision of Zhejiang High People's Court was the first case in Zhejiang Province with punitive damages after the “Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Cases of Infringement of Intellectual Property Rights” (Judicial Interpretation) took effect on March 3, 2021. The calculation method used “base amount + base amount * multiples (punitive damages)” which was different from the method used in earlier decisions before the Judicial Interpretation took effect, such as FILA v. Zhejing Zhongyuan and Adidas v. Ruan Guoqiang in which cases the total damages awarded were the base amount *3.
It will be interesting to watch if the new calculation method will be adopted universally by Chinese courts 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.
