Recently, the Shanghai No. 3 Intermediate People’s Court (Shanghai Intellectual Property Court, Shanghai Railway Transport Intermediate Court) released the Ten-Year Typical Judicial Cases on Intellectual Property. The cases handled by Lusheng Law Firm, namely “Trademark Infringement and Unfair Competition Dispute between Tesla (Shanghai) Co., Ltd. and Zhongyin Food Co., Ltd., Guangdong Zhongyin Food Co., Ltd., and Tangjiu Network Technology (Shanghai) Co., Ltd.” and “Invention Patent Infringement Dispute between Babyzen and Hebei Luyuan Children’s Vehicle Co., Ltd.”, were honorably selected as multiple cases among the "Shanghai Top IP Judicial Model Cases of the Past Decade" .
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Trademark Infringement and Unfair Competition Dispute between Tesla (Shanghai) Co., Ltd. and Zhongyin Food Co., Ltd., Guangdong Zhongyin Food Co., Ltd., and Tangjiu Network Technology (Shanghai) Co., Ltd.
— Copying and imitating another’s registered well-known trademark constitutes infringement
Brief Facts
Tesla discovered that Zhongyin Company and Guangdong Zhongyin Company displayed, sold, and promoted soda wine and beer infringing Tesla’s exclusive right to use its registered trademarks at the 2020 Jinan Autumn National Sugar and Alcoholic Commodities Fair and the 2021 Chengdu Spring National Sugar and Alcoholic Commodities Fair. Upon further investigation, Tesla also found that Zhongyin Company and Guangdong Zhongyin Company sold infringing products online via Taobao and Pinduoduo, and offline via nightclubs, bars, experience stores, and convenience stores. They also promoted the infringing products on WeChat official accounts, investment promotion websites (such as Huobao Food & Beverage Investment Promotion Network, Huobao Good Wine Investment Promotion Network, Tangjiu Network, etc.), Douyin accounts, Weishi accounts, Tencent, Youku and other platforms, and used promotional phrases such as “planned by International Top Brand Co., Ltd., international positioning standards.” The conduct of Zhongyin Company and Guangdong Zhongyin Company actually caused confusion among consumers and had a serious adverse impact on Tesla. Tesla therefore brought a lawsuit against Zhongyin Company and Guangdong Zhongyin Company before the court.
After proceedings on jurisdictional objection, first instance and second instance, the Shanghai High People’s Court rendered a final judgment dismissing the appeal and upholding the original judgment, namely: (1) Zhongyin Company and Guangdong Zhongyin Company shall immediately cease the trademark infringement; (2) Zhongyin Company and Guangdong Zhongyin Company shall immediately cease the unfair competition acts of false advertising; (3) Zhongyin Company and Guangdong Zhongyin Company shall, within thirty days from the effective date of the judgment, publish a statement in Legal Daily to eliminate the impact on Tesla caused by the infringing acts; (4) Zhongyin Company and Guangdong Zhongyin Company shall, within ten days from the effective date of the judgment, compensate Tesla for economic losses and reasonable expenses in a total amount of RMB 5 million.
Typical Significance
This case was also selected as one of the “Outstanding Transactions of 2023 in Business Law (Intellectual Property Category)”.
Read More
Read the judgment of this case
Lusheng Case | Shanghai High People’s Court Recognizes Six “TESLA” Trademarks as Well-Known Marks!
Obtain the detailed courseware of this case through the article
Lusheng Insights | Detailed Analysis of Tesla v. “Tesla Beer” Case
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Invention Patent Infringement Dispute between Babyzen and Hebei Luyuan Children’s Vehicle Co., Ltd.
— The right holder may lawfully choose the method of calculating damages that is favorable to the protection of its rights
Brief Facts
Babyzen Ltd. (Babyzen) is a globally renowned stroller company. Its “Babyzen yoyo” stroller is an innovative product. Based on its globally pioneering one-click folding patent, the stroller can be folded and unfolded with ease and is no longer bulky. The “Babyzen yoyo” stroller has therefore become a household name among young parents.
However, during the hot sales period of the “yoyo” stroller, Hebei Luyuan Children’s Vehicle Co., Ltd. (hereinafter “Luyuan Company”) closely followed suit by imitating the yoyo stroller and mass-producing and selling counterfeit yoyo products to seek unlawful profits. As Luyuan Company did not invest any R&D costs and used very ordinary materials, its products were sold at low prices and quickly eroded the plaintiff’s market with this low-price strategy, causing the plaintiff enormous losses. The plaintiff therefore filed a lawsuit with the Shanghai Intellectual Property Court, requesting that the defendant cease the infringement and compensate for the losses.
Upon trial, the court found that the technical features of the strollers manufactured and sold by the defendant Luyuan Company fell entirely within the scope of protection of the patent claims asserted by the plaintiff, thus constituting infringement of the plaintiff’s invention patent. When determining the amount of damages, the court in this case accepted the method of calculating damages for patent infringement based on the plaintiff’s losses, and, in combination with the evidence on file, appropriately applied the rules of evidence to reasonably infer the profit margin of the patented product and the contribution rate of the patent, and ultimately fully supported the plaintiff’s claim for damages in the amount of RMB 3 million.
Typical Significance
This case is a particularly noteworthy one in which the Shanghai courts addressed the difficulty of determining damages in intellectual property cases. In this case, on the basis of carefully comparing the technical features to determine the fact of infringement, the Shanghai Intellectual Property Court focused on resolving the problem of difficulty in calculating damages in intellectual property infringement cases.
In this case, since the infringing products required no R&D investment, their prices were low. At the same time, the infringing products used exactly the same patented technology and could achieve the same technical effects as the patented products, enabling consumers to obtain essentially the same functional experience. Therefore, the infringing products became “ideal substitutes” for the patented products and caused a tremendous impact on the market for the patented products. At present, the main methods of calculating damages for patent infringement in judicial practice are: the plaintiff’s losses, the defendant’s profits, and statutory damages. Among these methods, the plaintiff’s losses are closest to the essence of damages for infringement. In this case, Babyzen’s counsel provided a large amount of evidence to demonstrate the extent of the “gap” in the right holder’s losses caused by the infringement, thereby enabling the court, in accordance with the “full compensation principle” of tort liability and the relevant provisions of judicial interpretations, to adopt the method of calculating damages based on the plaintiff’s losses as requested in this case.
This case was also selected as one of the “100 Model Cases of Shanghai Courts in 2021” and the “Typical Cases of Shanghai Courts in 2021 on Strengthening Intellectual Property Protection”.
Persons in Charge of the Cases
Jiang Nandi
Managing Partner, Co-head of Dispute Resolution Practice
Lusheng Law Firm
Jiang Nandi has 20 years of practical experience in intellectual property law and is able to provide clients with comprehensive and in-depth services in IP strategy and global portfolio management. She is adept at handling IP strategy, enforcement and litigation matters, covering trademarks, copyrights, patents, trade secrets, data, trade names, domain names and unfair competition. She is highly trusted by many well-known multinational corporations and industry-leading enterprises in China and abroad, with clients spanning the fast-moving consumer goods, luxury goods, technology and internet, automotive, entertainment, education and publishing industries.
Ms. Jiang has represented numerous cases of landmark significance in China’s judicial practice in the IP field, many of which have been recognized by courts and industry institutions, including those selected by the Supreme People’s Court as “Annual Typical Intellectual Property Cases”, among others.
Ms. Jiang has been recommended by many international legal rating agencies and authoritative media, including The Legal 500, Managing IP, Benchmark Litigation, World Trademark Review, etc., and has received honors such as “IPHouse: Top 50 Outstanding IP Lawyers in China” and “IPR Daily: 50 Intellectual Property Elite Lawyers Under 50”.
Email: ljiang@lushenglawyers.com
Li Xin
Senior Associate
Lusheng Law Firm
Li Xin previously worked at well-known domestic law firms and has extensive experience in IP litigation and non-contentious IP matters. Ms. Li has handled various types of IP cases, including trademark infringement, unfair competition, copyright, design patents, domain names, etc., and has served numerous well-known domestic and foreign enterprises in sectors such as fashion and luxury goods, publishing, fast-moving consumer goods, and manufacturing. A trademark and unfair competition case she handled was selected by the Supreme People’s Court as one of the “50 Typical Intellectual Property Cases of Chinese Courts in 2022”.
Email: xli2@lushenglawyers.com
Zhou Wei
Associate
Lusheng Law Firm
Ms. Zhou Wei joined Beijing Lusheng Law Firm in 2020. Prior to that, she worked at well-known domestic law firms and has extensive experience in IP litigation and non-contentious IP matters. Ms. Zhou has handled various types of IP cases, including trademark oppositions, invalidation and administrative litigation, trademark infringement, unfair competition, copyright, domain names, etc., and has served numerous well-known domestic and foreign enterprises in sectors such as education and manufacturing. Ms. Zhou has extensive experience in client communication and management, and is committed to gaining an in-depth understanding of clients and working closely with them to formulate effective IP strategies.
Email: ezhou2@lushenglawyers.com
