Italian brand Moncler secured victory against Chinese infringer with a substantial Damages Award
In a so-called “landmark” decision by the Beijing IP Court, luxury down jacket maker Moncler secured a victory against Beijing clothing company Nuoyakate Gourmet Co.
Nuoyakate was marketing jackets bearing marks similar to those of Moncler’s registered marks, and it registered numerous trademarks similar to those of Moncler’s marks and they also registered and used the domain name “mockner.com”. Moncler took out a trademark infringement and unfair competition action with the Beijing IP Court, which accepted the case in December 2014 and rendered the judgment in April 2015.
Moncler was awarded a sum of 3 million yuan (US$470,100) as damages and reasonable expenses.
For years, the amount of damages awarded by Chinese courts in intellectual property infringement cases had, for various reasons, been on the comparatively low side. The Moncler case has frequently been commented on as being a breakthrough where even though there is no evidence of Moncler’s loss of profit or Nuoyakate’s gain, the Beijing IP Court was willing to take into account all evidence of the case and allowed the full sum claimed by Moncler.
The maximum statutory damages of 3 million yuan was newly introduced by the current Trademark Law in May 2014. While this approach of the Beijing IP Court in determining the amount of damages may be regarded as a sign of progress and reform in the right direction, it is noteworthy that the high amount in the Moncler case is determined by a number of factors including, for example, the reputation of Moncler’s marks, the seriousness of the infringement, the blatant bad faith of the infringer and the high selling prices of the infringing products. Furthermore, this case was one of the cases being highlighted to demonstrate how China has been strengthening the protection of intellectual property rights by way of awarding higher amounts of damages.
However, this approach might backfire on foreign brand owners. In the New Balance case in April 2015, we note that the US New Balance did not have a PRC (People’s Republic of China) trademark registration for the Chinese name it had been using in China while a Chinese company had secured trademark registrations and has allegedly used the same Chinese name on shoes. The Chinese company sued. The US New Balance’s defences of fair use and earlier use failed. It was ordered by the Guangzhou Intermediate People’s Court to pay a record high of RMB98 million as damages for trademark infringement.
It is reported that the US New Balance has filed an appeal, and we will continue to watch out for further progress on this case.
Rhonda Tin, Counsel