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Chispo Law Firm Successfully Safeguarding Rights in a Case of "Parallel Import"

author:CHISPO

time:2020-04-24

Entrusted by the plaintiff Fila Sports Co., Ltd. ("Fila Corporation"), Beijing Duohe Law Firm ("Duohe") acted as an agent to file four trademark infringements against the defendants Lu, Yan, Cui and Gui (individuals).The People's Court of Yuhang District, Hangzhou City has made a first-instance judgment, and has ordered each defendant to compensate the plaintiff for economic losses of a total of more than RMB 2 million, and some of the judgments have become effective and compensation has been partially completed.

-- Introduction of the Case

"FILA" is a world-renowned sports brand that originated in Italy, and enjoys a history of more than one hundred years. Its global trademark was originally held by Luxembourg Sarl ("Fila Luxembourg"), after which the domestic transfer of trademark rights became effective. FULL PROSPECT (IP) PTE. LTD. ("FULL PROSPECT") is the present trademark owner of the FILA brand in mainland China. FULL PROSPECT allows Fila Corporation to exclusively use the "FILA" series of trademarks in China, and also authorizes Fila Corporation to protect the trademark right in its own name, and to act to protect its rights. Fila Luxembourg, which is entirely owned by the company FILA Korea Limited ("FILA Korea"), enjoys the trademark rights for"FILA" outside China.

Fila Corporation claims that the defendant Lu and others opened a purchasing agent shop on Taobao.com to sell "FILA" brand products, thereby infringing on the exclusive rights of its trademark "F & Picture" under No. 163332 and trademark "FILA" under No. 163333. Fila Corporation thus requested them to stop the infringement and to pay compensatory damages.

                                                                                                                                   Comparison of trademark drawings

                                                                                                                     Plaintiff's trademark                   Defendant's Trademark                                      

                                                                                                                                                 




-- Determination of infringement facts

Most often, the following conditions must be met to constitute parallel imports: (1) the vendor's action is not authorized by the domestic trademark holder; (2 ) other countries and regions acquire authentic goods from the trademark owner or via authorization by the the trademark owner; (3) the infringing goods are shipped for domestic sale.

Clarifying the relationship between the companies FILA Korea and FULL PROSPECTis the key point of this case. Duohe represented to the court the difference between the domestic and international trademark holdersthrough equity relationships, thehistory of assignment of the involving trademark, financial statistics and product promotion, etc. The court finally accepted Duohe's point of view, i.e., that the case was not one of parallel import, and that hence, the defendant's actions constituted trademark infringement.

-- Judgment Result

The court held that although the trademarks involved and FILA Korea's trademark "FILA" originally derived from the same owner, the trademark rights of "FILA" in China and in other countries already belong to different subjects, according to the different arrangements of the interests. Although the two parties have economic cooperation based on consideration of their interests, it is undeniable that the trademark rights of the two parties belong to different subjects. The defendant Lu fully knew that the product involved in the case did not originate from FILA Korea, and fully knew that the FILA Korea and Fila Corporation were not the same subject, and still sold products bearing the trademark involved within the country, which clearly constituted infringement.

-- Difficulties in this case

The recognition of the amount of compensation in trademark infringement disputes has always been a difficult point. Although the defendant indicated that it was a purchasing agent, and it was not clear that its actions constituted infringement, the products sold by the defendant were the same style as the plaintiff’s products, and the selling price was less than half of the plaintiff’s products. In addition, a large number of products involved in the case were sold in China, and as such, they shall bear tort liability. In the end, the court ruled that the defendants in this series of cases should pay a total of more than RMB 2 million.