First-instance case number: (2019) Zhejiang 03 Preliminary Civil Judgement No.493

The series of infringements carried out by the infringer, which cover the business name registration and use, production, sales, domain name and online sales, have the characteristics of combination, large-scale and difficulty of investigation. When determining the amount of compensation, the court shall take into full consideration the subjective malice, aggravated circumstances and the difficulty of investigation and evidence collection of the right holder, and shall include the punitive factors into the scope of determining the amount of compensation.

The legal representative’s behavior that is clearly beyond the legal scope of the Company Law and relevant laws and regulations shall not be recognized as a duty behavior, and it may be determined to constitute a joint infringement with the company based on the facts of the case.  

Case introduction

Plaintiff: Schneider Electric (China) Co., Ltd. (referred to as Schneider China)

Defendants: Huizhou Schneider Automation Equipment Co., Ltd. (referred to as Huizhou Schneider Company), Zhejiang Heideman Electric Co., Ltd. (referred to as Zhejiang Haideman Company), Kong Xiangguang, Hangzhou Jiehan Company, Qiu Zhongbao

Schneider China is a well-known enterprise in the electrical industry. Its brand name and the registered trademarks No. 1493717 "Schneider Electric" on circuit breakers and switches and No. G715396 "" have a high reputation.

Huizhou Schneider Company is a limited liability company established on May 8, 2017, with a legal representative Kong Xiangguang. Zhejiang Haidemann Company is a limited liability company (Sole Proprietorship) established on March 27, 2002, with the legal representative Kong Xiangguang. Hangzhou Jiehan Company is a limited liability company established on July 17, 2015, and its legal representative is Qiu Zhongbao.

On June 19, 2017, Huizhou Schneider Company registered "www.schlnelider.com" and used the "" logo in many places on the website. The "Contact Us" page of the website was displayed as "Huizhou Schneider Automation Equipment Co., Ltd. On May 23, 2019, Schneider China purchased switches and sockets with the "" logo from Hangzhou Jiehan Company. On June 4, 2019, the Wenzhou Market Supervision Administration inspected the production sites of Zhejiang Haideman Company and seized a number of switches, sockets and packaging boxes marked with the "" logo. Above switches, socket products and their packaging boxes are marked with the text "" "Schneider Electric" "Huizhou Schneider Automation Equipment Co. Ltd. Manufacturer: Zhejiang Haidemann Electric Co., Ltd. Website: www. schlnelider.com" and other words. 

The Intermediate People's Court of Wenzhou City, Zhejiang Province held that:

Huizhou Schneider Company's production and sales of the alleged infringing products and the use of the "" logo on its website infringed the exclusive rights of Schneider China's No. G715396 "" and No. 1493717 "Schneider Electric" trademarks. The use of the domain name "schlnelider.com" constitutes an infringement of the trademark No. G715396 ""; and the registration and use of its business name constitutes unfair competition.

The sale of the alleged infringing products by Hangzhou Jiehan Company and the use of "" and "Schneider" logos on promotional materials infringed the exclusive rights of Schneider China's No. G715396 "" and No. 1493717 "Schneider Electric" trademarks.

Huizhou Schneider had committed a number of infringement acts, covering the registered use of the company name, production, sales, domain names and online sales, etc., which were characterized by combination, large-scale and difficulty of investigation, with obvious subjective malice and relatively aggravated circumstances, so the punitive factor should be included in the scope of consideration of the compensation amount. Factors such as brand awareness and infringement consequences should be combined to determine the amount of compensation as one million yuan.

Zhejiang Haideman Company and Huizhou Schneider Company have the subjective intention of joint infringement, and they have carried out joint infringement behavior objectively. Therefore the two company should bear joint infringement liability.

As the legal representative of Zhejiang Haideman Company and Huizhou Schneider Company, Kong Xiangguang’s improper registration of Huizhou Schneider Company and the production and sale of infringing products were clearly beyond the legal scope of the Company Law and related laws and regulations. It did not fall within the scope of duty behavior, and shall also bear the joint infringement liability.

Typical meaning

This case is a typical dispute over the infringement of trademark rights and unfair competition in which the infringement is severe and the subjective malice is obvious. Kong Xiangguang carried out a series of actions including registration of Huizhou Schneider Company, Zhejiang Haideman Company, "www.schlnelider.com" domain name, and production and sales of products that infringed the trademark exclusive rights of No. G715396 "" and No. 1493717 "Schneider Electric". This case reflects the severity and urgency of intellectual property protection under the new situation.

In order to compensate the victims for their losses, punish and deter unlawful acts, the court took the above-mentioned series of infringing acts covering the registration and use of company names, production, sales, domain names and online sales as punitive factors to be considered and included them in the scope of determining the amount of compensation. At the same time, for the legal representative who committed acts that were clearly beyond the legal scope of the Company Law and relevant laws and regulations, it was held that he and the company constituted joint infringement.

It should be pointed out that it is argued that punitive damages can only be applied if the loss of the right holder, the infringer's gain or the license fee can be determined, but the provisions of the law and related judicial interpretations have not ruled out consideration factors that targeted the subjective malice and aggravated circumstances in statutory compensation. The judgment of this case has a great deterrent effect on similar "one-step" infringement acts, and is of high guiding significance.