Compensating 0.8 Million for Unauthorized Use of Mercedes-Benz’s Marks on Auto Parts

 

May 28, 2022 10:11 Source: International Finance News Written by Wu Sijie

A company was ordered by the court to compensate the right owner 0.8 million for unauthorized use of Mercedes-Benz’s marks on the auto parts manufactured by itself.

Recently, the Shanghai Intellectual Property Court (hereinafter referred to as the “Court”) rendered the final judgment on the appeal over trademark infringement among the appellant Shanghai Tonghe Auto Parts Co., Ltd. (hereinafter referred to as the “Tonghe”), the appellee Daimler AG (hereinafter referred to as “Daimler”) and the first-instance defendant Shanghai Tongzhi Auto Parts Co., Ltd. (hereinafter referred to as “Tongzhi”), rejecting the appeal and affirming the original judgment.

According to data, Daimler, a company registered in the Federal Republic of Germany, produces and sells products in land vehicles, engines and other power equipment industries. It has registered the trademark No. 76582 “MERCEDES-BENZ” on various kinds of motor vehicles, vehicle engines and tractors in Class 12 under the international classification; trademark No. 526122 “MERCEDES-BENZ” and trademark No. 526123, the three-pointed star logo, on products such as handles, door handles, hard rubber shock absorbers, shock absorbers, wiper blades and mats for automobiles and automobile engines in Class 12 under the international classification; trademark No. G1089299, the three-pointed star logo, on vehicles, body components and transmission devices, and parts and components of vehicles and engines; and trademark No. 669658 “奔驰” on cars and their parts. All these trademarks are within their validity period.

Daimler alleged to the Court that Tonghe and Tongzhi should bear joint liability as they produced and sold auto parts that infringed its trademark rights without authorization and caused serious adverse impacts on its brand reputation due to their long-term joint infringement, widespread sales, and the vile nature of the infringement.

Therefore, it requested the Court to order Tonghe and Tongzhi to immediately stop using marks the same as its registered trademarks in the production and sale of auto parts and components, jointly compensate a total of 1.2 million yuan for its economic losses and reasonable expenses and publish a statement to eliminate the impacts.

Through trial, the first-instance court held as follows. Tonghe sold in its stores brake pads, filters, pulleys, and other auto parts with marks such as the three-pointed star, Mercedes-Benz and MERCEDES-BENZ. The three-pointed star and MERCEDES-BENZ on these products basically look no different from and constitute the same as Daimler’s marks. While the Mercedes-Benz trademark used on these products just differs in letter case compared with Daimler’s “MERCEDES-BENZ” trademark. On the whole, there is basically no difference in visual perception between the two. The two are the same.

Furthermore, Tonghe purchased the three-pointed star and other marks from outsiders and pasted them on the outer packages of auto parts sold by it to identify the goods source. Such using marks identical with Daimler’s registered trademarks constitutes trademark infringement. Printing both the characters “奔驰” and Tonghe’s mark and QR code on the label of relevant products is likely to cause confusion and misunderstanding of the goods source among the relevant public. This is also using marks identical with Daimler’s registered trademarks and constitutes trademark infringement.

Besides, the existing evidence does not suffice to prove that Tongzhi and Tonghe commit joint infringement.

Therefore, the first-instance court ruled Tonghe immediately cease the trademark infringement, publish a statement to eliminate the impacts, and compensate Daimler a total of 800,000 yuan for its economic losses and reasonable expenses.

Dissatisfied with the result, Tonghe appealed to the Shanghai Intellectual Property Court on the ground that its profits had been defined in the investigation archives of the industrial and commercial administration and the amount of compensation determined in the judgment of first instance was too high.

Through hearing, the Shanghai Intellectual Property Court held that it’s lawful for the first-instance court to determine the compensation amount by giving full consideration to such factors as Tonghe’s malice and the nature, duration and consequences of the infringement, which can be evidenced by ascertained facts, when Daimler failed to prove the actual losses it suffered and the benefits Tonghe obtained as a result of the infringement. As for Tonghe’s contention that the amount of compensation should be based on the number of infringing products seized by the industrial and commercial administration and the amount of administrative penalty, the Court held, according to China’s trademark law, the trademark registrant has the right to apply for administrative investigation as well as to file a civil lawsuit for trademark infringement against the infringement of the exclusive right to use a registered trademark. Tonghe was subject to administrative punishment because the trademark registrant filed an administrative complaint based on the three notarized purchases of infringing products. However, the amount of compensation awarded in civil actions is not necessarily based on the facts on which the administrative penalty is based and the amount of the administrative penalty.

Holding that the amount of civil compensation awarded by the first-instance court based on Tonghe’s infringement facts is not excessively high, the Shanghai Intellectual Property Court maintained the original judgment.

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