1. Significance

• It is pointed out in the Outline for Building an Intellectual Property Powerhouse (2021-2035) that an intellectual property protection system that supports a world-class business environment shall be established. As an important force in the intellectual property protection system, the judicial protection of intellectual property rights plays an indispensable role. This case is a model case in which the people's court protected the enterprise name and trademark rights and interests in accordance with the law, and served and safeguarded epidemic prevention and control and economic and social development. In this case, Winner Joint Stock Company is a well-known manufacturer of medical health materials, and its trademark and enterprise name are well-known in the industry. The tortfeasor intentionally used the trade name to register an enterprise to produce and sell mask products, and conducted serious trademark infringements and unfair competition in an organized manner based on the division of work. In this regard, the trial court entered a judgment to impose severe punishment by applying punitive damages, increasing compensation, identifying joint infringement, and ordering the tortfeasor to stop using the trade name, among others, which effectively protected the intellectual property rights and related rights of the right holder, interpreted the basic concepts of the people's court on comprehensively strengthening the judicial protection of intellectual property rights and maintaining the order of fair competition, and realized the better integration of political, legal, and social effects.

2. Basic facts

• Winner Joint Stock Company was founded in 2000 and its business covers such fields as medical dressings, surgical consumables, medical health materials, and household health care products. Many trademarks such as “”,“” and “” had been registered on many commodities such as masks. Winner Joint Stock Company has a high reputation and influence in the industry and has made significant contributions to epidemic prevention and control in China. Suzhou Winner Company was established in 2020 and used “”, “”, and “brand: Suzhou Winner, brand: Winner, brand: Winner, manufacturer: Suzhou Winner Medical Supplies Co., Ltd.” “Winner Medical, SW Suzhou Winner, WJ Winner Medical, and Suzhou Winner Medical,” “Suzhou Winner Company,” “Suzhou Winner Medical Supplies Co., Ltd.” and other words in the pictures, parameters, details, packing boxes, compliance certificates, price tags, and packaging bags of mask products it manufactured and sold and business environment, public account, and website, among others, to publicize and introduce its products, company, and operations. Hua [REDACTED] held 99% and 91.6667% of the shares of Suzhou Winner Company and [REDACTED] Packaging Company respectively. The business address of Suzhou Winner Company is located at a packaging industrial park. The address of the official website of [REDACTED] Packaging Company was indicated on the packaging bags of masks sold by Suzhou Winner Company, and the official seal of [REDACTED] Packaging Company was affixed to the sales receipts issued. The product and enterprise information of Suzhou Winner Company was introduced in detail on the official website of [REDACTED] Packaging Company, the online stores of the Packaging Company sold the masks of Suzhou Winner Company, and the Packaging Company claimed that it was a self-owned factory and source manufacturer. Hua [REDACTED] included the sales revenue of masks sold by the online stores of [REDACTED] Packaging Company in his personal account. Winner Joint Stock Company held that the aforesaid act infringed upon its trademark right and constituted unfair competition. [REDACTED] Packaging Company and Hua [REDACTED] conducted joint infringement, so it required Suzhou Winner Company to stop the infringement and compensate for its loss. [REDACTED] Packaging Company and Hua [REDACTED] should be liable jointly and severally.

3. Judgment

• The effective judgment held that the registered trademark and enterprise name involved in this case were relatively well-known. Suzhou Winner Company used the logo which was the same as or similar to the registered trademark involved in this case on its mask products, its website, online stores, and public account, registered and used without authorization the “Winner” trade name and enterprise name, and conducted the same business activities, for the evident purpose of attaching to the goodwill of Winner Joint Stock Company, which caused confusion and misrecognition and constituted trademark infringement and unfair competition. Suzhou Winner Company and [REDACTED] Packaging Company were highly related to each other, and Hua [REDACTED] was the absolute controlling shareholder of the two companies, and his personal property was mixed with the property of the companies. Under the planning and control of Hua [REDACTED], the two companies cooperated with each other with the division of work and jointly conducted infringements, so the three should be jointly and severally liable. Suzhou Winner Company, [REDACTED] Packaging Company, and Hua [REDACTED], although knowing that the registered trademark and trade name involved in this case were well-known in the industry, registered a company by using an infringing trade name, committed the aforesaid acts in an organized manner with the division of work, continued to commit the infringement after being reported twice by Winner Joint Stock Company, and made false statements to the market regulatory department, which seriously violated the principle of good faith and business ethics. Meanwhile, the infringing goods involved in this case were low-cost materials for epidemic prevention and control. They were sold to the public without undergoing formal inspection procedures, and their quality could not be ensured. They greatly damaged the goodwill of Winner Joint Stock Company, seriously endangered public health, and adversely affected epidemic prevention and control. In this case, infringements were committed through diversified channels, including the online official website, online stores, offline sales, and online services covered WeChat, Douyin, Taobao, 1688, etc., and the infringements were of a large scale and lasted for a long time. The party refused to submit financial account books and other evidence as required by the court. Therefore, the court held that the circumstances of infringements committed by Suzhou Winner Company, [REDACTED] Packaging Company, and Hua [REDACTED] were serious; their subjective intention was evident; for the infringement profit that could be ascertained, four times the punitive damages should apply in accordance with the law; for the part of which the specific sales amount could not be ascertained, the amount of compensation should be determined by applying the statutory compensation after comprehensive consideration of severity of infringement circumstances. On that basis, a judgment was entered that Suzhou Winner Company, [REDACTED] Packaging Company, and Hua [REDACTED] should immediately cease the infringement upon the exclusive right to the use of the trademark and unfair competition, and Suzhou Winner Company should immediately cease the use of its current enterprise name and the three should jointly compensate Winner Joint Stock Company for its loss and reasonable expenses for right protection in the amount of 1,021,655 yuan.

4. The provisions of the Civil Code

• Article 179 Civil liability shall be assumed primarily in the following manners:

• (1) Cessation of infringement.

• (2) Removal of obstacles.

• (3) Elimination of danger.

• (4) Restitution of property.

• (5) Restoration to the original condition.

• (6) Repair, reworking, or replacement.

• (7) Continued performance.

• (8) Compensation for loss.

• (9) Payment of liquidated damages.

• (10) Elimination of adverse effects and rehabilitation of reputation.

• (11) Making an apology.

• Where any law provides for punitive damages, such a law shall apply.

• The manners of assuming civil liability as set forth in this article may be applied alone or by a combination.

• Article 1168 Where two or more persons jointly commit a tort, causing harm to another person, they shall be liable jointly and severally.

• 
  

The article is reprinted from The Second Group of Model Cases on the People's Courts' Implementation of the Civil Code Published by the Supreme People's Court.