Case Brief

Siemens AG (hereinafter referred to as "Siemens Company") and Siemens (China) Co., Ltd. (hereinafter referred to as "Siemens China Company") enjoy the exclusive right of the involved registered trademark "Siemens" as approved and registered on washing machine products, and the trademark has a high reputation after long-term use. The brand name "Siemens" of Siemens Company and Siemens China Company also has a certain impact. Ningbo Qishuai Electrical Appliance Co., Ltd. (hereinafter referred to as "Qishuai Company") used the logo of "Shanghai Siemens Electrical Appliance Co., Ltd." in the production and sale of washing machine products, product packaging and relevant publicity activities, while Kunshan Xinweichuang Electrical Appliance Co., Ltd. (hereinafter referred to as "Xinweichuang Company"), a sole proprietorship, sold the aforesaid alleged infringing products. Siemens Company and Siemens China Company filed this action on the ground that the aforesaid acts of Qishuai Company and Xinweichuang Company had infringed upon their exclusive right to the registered trademark and constituted unfair competition, and requested compensation of 100 million RMB for economic losses and 163,000 RMB for reasonable expenses. The Higher People's Court of Jiangsu Province held in the first instance that the acts of Qishuai Company and Xinweichuang Company constituted trademark infringement and unfair competition, and fully supported the compensation claims of Siemens Company and Siemens China Company. Qishuai Company and others were dissatisfied and appealed.

After a second-instance hearing, the Supreme People's Court held that Qishuai Company's use of "Shanghai Siemens Electrical Appliance Co., Ltd." in washing machines, commodity packaging and publicity activities constituted trademark infringement of Siemens Company and unfair competition as prescribed in items (2) and (4) of Article 6 of the Anti-Unfair Competition Law. Considering that Qishuai Company refused to provide the financial materials related to the infringement acts in the litigation, it was not improper for the court of first instance to take media coverage on record as the basis for calculating the total sales amount, and calculate the proportion of sales amount of the allegedly infringing products on the basis of a fifteenth, and then determine the amount of damages. Although the existing evidence could not prove the profits from the infringement and the losses from the infringement, it was sufficient to determine that Qishuai Company's benefits from the production and sale of the alleged infringing products obviously exceeded the statutory maximum amount of compensation as prescribed in paragraph 4 of Article 17 of the Anti-Unfair Competition Law. Considering that the enterprise names of Siemens Company and Siemens China Company have relatively high popularity, Qishuai Company had obvious subjective malice, the scale of infringement, the duration of infringement, and in consideration of the profit margin of washing machine products and other factors, the amount of compensation determined in the first instance was not inappropriate. The second instance of the Supreme People's Court rejected the appeal and upheld the original judgment.

Typical significance

This case is a typical case of cracking down on the act of counterfeiting and causing confusion. In this case, the people's court has determined that the use of a mark which is identical with or similar to the brand name and registered trademark of an enterprise name with a certain level of influence as a brand name and the business operations conducted by the enterprise constitute an act of unfair competition as prescribed in Article 6 of the Anti-Unfair Competition Law. At the same time, under the circumstance where the existing evidence cannot prove the profits from the infringement and the specific amount of actual losses, the people's court has specified the considerations for determining the amount of compensation. The judgment of this case is of exemplary significance to the determination of confusion, calculation of compensation amount, and other issues concerning the application of law.

(Source of case: Supreme People's Court (2023 People's Court Typical Anti-Monopoly and Anti-Unfair Competition Cases))