The Shanghai IP Court recently concluded a trademark infringement lawsuit between the appellant Shanghai Tonghe Auto Parts Co., Ltd. ("Tonghe"), the appellee Daimler AG ("Daimler"), and the defendant in the first instance Shanghai Tongzhi Auto Parts Co. Ltd. ("Tongzhi"). The court rejected the request to appeal and affirmed the lower court's decision. Tonghe was ordered to immediately stop infringements against Daimler and was ordered RMB800,000 (USD112,380) in compensation to cover Daimler's economic loss.
According to the notarized evidence submitted by Daimler and the administrative penalty decision, on-site transcripts, interrogation transcripts, photos and other evidence made by Shanghai Minhang District Market Supervision Administration, it can be determined that Tonghe sold brake pads, in the relevant stores it operated, along with filters, pulleys and other auto parts. These parts were marked with three-pointed star design, "Mercedes-Benz," "MERCEDES-BENZ." and other logos. The first instance court found that the said goods were identical to those approved for use by Daimler's marks with reg. nos. 526122 and G1089299. The three-pointed star logo and the "MERCEDES-BENZ" mark used above were basically identical visually as the three-pointed star logo and the "MERCEDES-BENZ" mark owned by Daimler, which constituted identical marks. Compared with Daimler's marks, the only difference between the "MERCEDES-BENZ" mark and the "Mercedes-Benz" mark was letter case, and there was basically no visual difference between the two in overall appearances. Therefore, Tonghe's acts violated Daimler's trademark rights. The first instance court took into account the relatively high popularity of Daimler's marks on related goods, the fact that product quality may affect personal safety, and the variety of infringing products, and comprehensively considered Tonghe's degree of subjective bad faith, the nature, time, and decided that the amount of compensation shall be determined based on factors such as the consequences, the quantity, and unit price of the infringing products, and the size of the company.
The main focus of dispute in the second instance of this case was whether the amount of compensation in the first instance was reasonable. Regarding Tonghe's claim that the amount of compensation in this case should be based on the quantity of infringing products investigated and dealt with by the Market Supervision Administration and its fine. The second instance court found that Daimler, as the owner of the registered marks, has the right to both apply for administrative investigation and file a civil lawsuit for trademark infringement. Although Tonghe was punished administratively because Daimler purchased the infringing product based on the three notarizations involved in the case, the amount of compensation in civil infringement lawsuits is not necessarily based on the facts and the fines found in the administrative punishment. The first instance court's comprehensive considerations of Tonghe's infringement facts were appropriate.
With regard to Tonghe's claim that Daimler failed to present evidence of notarized purchases in the first instance, resulting in the inability to identify product quality, Daimler should bear the adverse consequences. The second instance court found that although Daimler did not submit notarized evidence in the first instance, based on the photos attached to the notarial certificate and the content recorded on the CD-ROM and the relevant facts recorded in the administrative punishment decision, Tonghe did not submit valid evidence to prove its products' legal origin. Based on this, the first instance court was not in err in determining that Tonghe infringed Daimler's trademark. Moreover, product quality of the infringing products would not have affected the determination of trademark infringement.
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