China’s Shanghai Intellectual Property Court on April 25 upheld a lower court ruling in favor of iconic Italian fashion designer Giorgio Armani in a trademark infringement lawsuit lodged by him against Yang and Zhang, seeking 3 million yuan ($450,000) in damages and 200,000 yuan ($30,000) in reasonable costs.

Giorgio Armani is credited with pioneering red-carpet fashion. By 2001 Armani was acclaimed as the most successful designer of Italian origin. According to Bloomberg Billionaires Index, Armani had an estimated net worth of $9.53 billion, as of 2021. He founded Giorgio Armani S.p.A. in Milan city, Italy in 1975. In 2014, the fashion house’s revenue in China exceeded 1 billion yuan ($16 million) and Armani was officially recognized as a well-known trademark in China in 2016. By 2017, the label had been available in 920 free-standing or in-store Armani boutiques and makeup counters located in 82 Chinese cities.

In 2012, Zhang signed an agreement with Yang to be responsible for the design, manufacture, and distribution of Emporio Armani-branded haute couture garments, assuming Yang was a certified Armani designer based on a letter of authorization for representative signed by Giorgio Armani, which was forged and presented by Yang. Focusing on trends and modern traits, Emporio Armani is the second brand of the Armani family and features ready-to-wear and runway collections, instead of haute couture garments claimed by Yang. Zhang failed to perform due diligence on Yang as the business partner and began to provide the custom-fitted high-end fashion design services in his three bricks-and-mortar stores as well as on his online outlets, and split the net income with Yang on a 50/50 basis.

Giorgio Armani in 2019 sued Yang and Zhang in the Yangpu District People’s Court of Shanghai municipality for trademark infringement and other unfair competition practices such as false advertising, seeking 3 million yuan ($450,000) in damages and 200,000 yuan ($30,000) in reasonable costs. The trial court ruled for the plaintiff and ordered the two defendants to pay the amount of damages demanded by the plaintiff, finding that Yang received 2.5 million yuan ($380,000) from Zhang as profit in the 50/50 partnership between 2012 and 2017. Zhang appealed the case to the Shanghai Intellectual Property Court claiming that he had met the requirements of the standard of care and fallen victim to Yang’s forgery. The appellate court upheld the lower court ruling, holding that Zhang was proactively involved in promoting Yang’s image as an Armani-certified designer by varied means including the sponsoring of the publication of Yang’s fraudulent autobiography.

Meanwhile, the Changping District People’s Procuratorate of Beijing municipality initiated criminal public interest litigation against Yang for contract fraud in 2018. The Changping District People’s Court of Beijing municipality sentenced Yang to 12 years in prison and a fine of 120,000 yuan ($18,000) and ordered Yang to refund the award of 2.5 million yuan ($380,000) to Zhang, who was acquitted in the case, in 2019. Yang appealed the case and the appellate court upheld the lower court ruling in 2020.

The lower court civil case docket no. is （2019）沪0110民初17713号, whose English transliteration is 17713, first instance (初), civil case (民), (2019) Yangpu District People’s Court of Shanghai Municipality (（2019）沪0110)

The criminal case docket no. is （2020）京01刑终76号, whose English transliteration is 76, second instance (终), criminal case (刑), (2020) Beijing No. 1 Intermediate People’s Court (（2020）京01)