China's top court released top 10 IP cases of 2023—Case involving “Siemens” trademark infringement and unfair competition disputes

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The Supreme Peoples Court (SPC), Chinas top court, recently released the top 10 intellectual property cases and 50 exemplary intellectual property cases of 2023. Encompassing patents, trademarks, copyrights, new plant varieties, anti-unfair competition, and anti-monopoly, these cases span a wide spectrum of intellectual property categories. They delve into crucial realms and sectors of the modern era, including core technological innovation, renowned domestic and international brands, the digital economy, and the seed industry.

These cases can provide readers with a comprehensive overview of the Chinese intellectual property landscape. In the upcoming weeks, China IP will publish the English version of the top 10 intellectual property cases of 2023.

Case I: Case involving "Siemens" trademark infringement and unfair competition disputes

Case Brief

Xi XX Joint Stock Company and Xi XX (China) Co., Ltd. (hereinafter referred to as "Xi Company") held the registered trademarks "西门子" and "SIEMENS," registered for washing machines and other products. Both trademarks gained significant popularity through Xi Company's long-term use and extensive promotion efforts.

Ningbo Qi XX Electrical Appliances Co., Ltd. and other entities registered the name "Shanghai Siemens Electrical Appliances Co., Ltd." overseas as a commercial logo. These entities widely utilized this logo on their washing machine products, packaging, and promotional activities.

Xi Company alleged that the actions of Ningbo Qi XX Electrical Appliances Co., Ltd., infringed upon its exclusive registered trademark rights and constituted unfair competition. Xi Company filed a lawsuit at court.

In the first-instance ruling, the court determined that while the actions of Ningbo Qi XX Electric Appliances Co., Ltd. and others did not constitute trademark infringement, they did constitute unfair competition. Consequently, Ningbo Qi XX Electric Appliances Co., Ltd. and others were ordered to cease infringement immediately and compensate Xi Company for economic losses totaling 100 million RMB, along with reasonable expenses of 163,000 RMB.

Dissatisfied with the verdict, Ningbo Qi XX Electrical Appliances Co., Ltd., appealed.

Upon review in the second-instance hearing, the Supreme Peoples Court found that Ningbo Qi XX Electrical Appliances Co., Ltd. and others knowingly exploited the popularity of the "西门子" and "SIEMENS" trademarks by intentionally using the name "Shanghai Siemens Electric Appliances Co., Ltd." on their washing machine products, leading to consumer confusion and constituting trademark infringement. Additionally, the use of this mark in product packaging and promotional activities was deemed unfair competition, warranting compensation.

Regarding to the amount of the compensation, although it was challenging to quantify Xi Company's actual losses or the profits gained by Ningbo Qi XX Electrical Appliances Co., Ltd. from the infringement, evidence indicated that the infringing profits significantly exceeded the statutory maximum compensation of 5 million RMB.

As Ningbo Qi XX Electric Appliances Co., Ltd. refused to provide financial materials related to the infringement, which constituted spoliation of evidence, the first-instance court determined that it was appropriate for Ningbo Qi XX Electric Appliances Co., Ltd. and others to be liable for compensation of 100 million RMB. This determination was made by calculating the proportion of sales of the allegedly infringing products, amounting to 15% of the total sales amount of 1.5 billion RMB, based on media reports and relevant case facts.

The Supreme People's Court dismissed the appeal and upheld the original judgment.

Typical Significance

The second-instance judgment in this case strictly applies the system of the spoliation of evidence. It underscores that infringers who intentionally withhold evidence and impede the court's fact-finding process will face adverse legal consequences. This ruling underscores the judiciary's commitment to rigorously safeguarding intellectual property rights, thwarting malicious attempts to exploit the reputation of renowned trademarks, and fostering a conducive business environment by upholding market integrity.