Clarke, Murray Collin, BIOZEAL, LLC and Weimi E-Commerce (Shanghai) Co. Ltd. sued Qidong Lu, Nanjing Childhood Time Bio-Technology Co. Ltd. ("Nanjing Childhood Time"), and Zhejiang Jixiang E-Commerce Co. Ltd. for trademark infringement and unfair competition. The court found that Clarke registered the "CHILDLIFE" mark in the United States on January 30, 1996, and then applied for a territorial extension to China on February 6, 2006 (International Registration No. G880154). After this mark expired, Clarke reapplied for the same mark on December 2, 2016 in Class 5, which was approved for registration on January 21, 2018 and remains valid. Clarke had a license agreement with BIOZEAL that allowed BIOZEAL to use the said mark exclusively. According to the facts found in the evidence, the use of "CHILDLIFE" as the trade name of the inne products sold by the overseas flagship store of Nanjing Childhood Time, and the sale of the CHILDLIFE products and the use of the word inne in the promotional images constituted trademark use. The infringing store used the trademark "CHILDLIFE" on its inne products without BIOZEAL's permission, and the infringing goods and the "CHILDLIFE" products were both children's nutritional solution products, which constituted the same goods. Considering the distinctiveness and popularity of the trademark "CHILDLIFE," the use of the trademark "CHILDLIFE" in the key position of the sales picture of the inne products was likely to cause confusion and misrecognition among the relevant public. Therefore, the use of the trademark "CHILDLIFE" by the infringing stores in the sale of inne products constituted trademark infringement. At the same time, although the infringing store's use of the "CHILDLIFE" trademark during the sale of inne products did not constitute as removing other's trademarks in the physical sense, in essence, it has the same function and effect of removing other's trademarks. It also infringed on the "CHILDLIFE" trademark identification function and caused public confusion and misunderstanding. Therefore, the infringing stores constituted trademark infringement and its act constituted reverse counterfeiting. With regard to unfair competition, according to the evidence in the case, Childlife products entered China in 2006, and have gained a certain degree of popularity and many honors and awards in the market of children's nutritional solution, with a long sales time, wide area and large sales, and their packaging and decoration had a certain degree of influence in the market of children's nutritional supplements and so on. Although there is a difference between the inne products and Childlife products, but because Childlife products' packaging and decoration have a high reputation, inne products packaging and decorations could easily cause confusion and misrecognition to the relevant public, the two constituted substantially similar. Therefore, the infringing store sales of inne products with the aforementioned decoration constituted unfair competition. In addition, "Childhood Time in Chinese" is BIOZEAL's influential trade name, and the unauthorized use of the trade name "Childhood Time in Chinese" by Nanjing Childhood Time after the termination of the distribution relationship between the two parties constituted unfair competition. At the same time, Nanjing Childhood Time's false publicity behavior/malicious complaints/use of the "Childlife" keywords also constituted unfair competition. With regard to damages, the court held that the infringing behavior of Nanjing Childhood Time constituted aggravated circumstances, and the punitive damages shall be applied. According to the statistics, the sales of the infringing goods amounted to RMB300 million (USD42.24 million), and the punitive damages in this case amounted to RMB120 million (USD16.9 million) based on a profit margin of 20%. Accordingly, the court supported the plaintiffs' claim of RMB50 million (USD7 million) in damages.
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