In November 2014, Louis Vuitton Malletier, S.A. (Hereafter referred as “Louis Vuitton”) discovered that large number of handbags and backpacks with trademark and design similar to the registered trademarks and design of Louis Vuitton sold in Xinjinpu Fashion City located in Qipu Road of Shanghai. It was further discovered that the allegedly infringing products were produced by Guangzhou Huadu District Shiling Town Xianmei Leather Goods Factory (hereafter referred as “Xianmei”) and distributed by Shanghai Xinjinpu Company (hereafter referred as “Xinjinpu”). Later in December 2015, Louis Vuitton discovered that allegedly infringing products produced by Xianmei were sold in China Leather City in Haining of Zhejiang Province. Louis Vuitton filed a complaint before local Court against Xianmei and Xinjinpu for trademark infringement and unfair competition, asking for the court to order the defendant to stop the infringement, namely manufacturing and selling of infringing product, publicly express apology in media and recover the monetary damage plus reasonable enforcement cost of CNY 1.6 million (about USD 246,000).
In the litigation, Xianmei did not focus the argument on whether the products were infringing the exclusive right of trademark of Louis Vuitton. Instead, Xianmei repeatedly argued in first instance and second instance that it had never produced the infringing product and Louis Vuitton did not provide sufficient evidence to prove Xianmei was the manufacturer of the allegedly infringing product.
Xianmei argued that, on the label of allegedly infringing product as well as the package bag (PB 1) of the product as preserved as evidence by Louis Vuitton, the manufactuer was marked as “Guangzhou Xianmei Leather Goods Factory”, which is substantially different from the complete name of Xianmei as “Guangzhou Huadu District Shiling Town Xianmei Leather Goods Factory” because many elements of the company name were missing. The first instance court held that in spite of the missing information, considering the fact that Xianmei had acknowledged there is only one “Xianmei” in Huadu District and the phone number printed on the package bag (PB 1) is the true phone number of Xianmei, it should be established that Xianmei is the manufacturer of the allegedly infringing products. Therefore, the court held that Xianmei has infringed the trademark right of Louis Vuitton.
Xianmei appealed the judgment of the first instance court before Shanghai IP Court. In the second instance, Xianmei submitted a sample package bag (PB 2) and claimed this package was the real package produced and used by Xianmei which is different from the package bag (PB 1) submitted as evidence by Louis Vuitton. Xianmei argued that the difference between these two packages proved Xianmei is not the manufacturer of the allegedly infringing products. Furthermore, Xianmei argue that, since the information such as company name of Xianmei and the trademark “Babilu” shown on the label as evidence submitted by Louis Vuitton are accessible to public, there exists possibility that someone else produced the infringing product while forging the label with Xianmei’s name and company detail on it.
Shanghai IP Court as the second instance court held that, in this case, the evidence (label, company name on the package and phone number) provided by the plaintiff has clearly shown the association with the Xianmei. What’s more, the trademark “Babilu” as indicated on the package bag (PB1) is owned by Xianmei. On the other hand, Xianmei failed to provide evidence proving the manufacturing detail and time of the package bag (PB2). In conclusion, the Shanghai IP Court rejected the appeal and upheld the judgment of the first instance court.
In the IP litigation, in order to establish infringement and cause damages, the following aspects need to be proved,
- the plaintiff has the right;
- the defendant has infringed the right;
- the defendant has caused damages / enriched from infringement / reasonable royalty existed before / other considerations by the judge such as type of IP right, duration of infringement, willfulness of infringement etc.
For the evidence that the defendant has infringed the right, the plaintiff has to prove further,
- the act is infringing and,
- the act has been performed by the defendant.
In trademark case, the act of infringement as defined by the Trademark Law of China is as follow:
Article 57. Any act of the following situations constitute infringement of trademark:
a. without the authorization from the trademark owner, use the identical registered trademark on the same type of goods.
Article 48 “Use” as defined by this Law, means applying the trademark on the goods, package of goods, container or trade document, or using the trademark in advertisement, trade show and other commercial activities, so as to identify the source of the goods.
In other words, the plaintiff has to prove that defendant has performed the act of infringement, namely, applying the trademark on the product.
In this case, although there is a defect in the evidence provided by the plaintiff, both the first instance court and the second instance court still held the manufacturer of the infringing product is the defendant. There are certain elements missing in the company name printed on the label or package of the product. However, as long as the essential element on the infringing proeduct is identical to the defendant’s name (in this case, the trade name “Xianmei” is shared by both the name on the label and the defendant’s name) , it can prove strong association between the manufacturer and the defendant. With the additional evidence such as phone number printed on the package and existence of only one company with such trade name in the related area, it can be proved that defendant is the manufacturer.