Court: Hangzhou Intermediate People’s Court
Date of Issuance: April 26, 2024
Case No.: (2024) Zhe Min Zhong 234
Issue Involved: Whether a trademark agency should be held liable when it plays a significant role in planning or guiding trademark infringement, violating principles of good faith and professional ethics?
Mengchun’s Comments:
The right holder may collect evidence to prove that the trademark agency substantially led or participated in the infringement, and thus should be jointly and severally liable for trademark infringement.
Summary of the Court’s Judgment:
1. Xiruan Zhigu Company, as a professional trademark agency with a high level of expertise, is obliged to exercise a greater duty of care in assessing potential trademark infringement. Given the high reputation of Lukewang Company’s registered mark No. 1186674, Xiruan Zhigu should have conducted trademark preliminary searches when accepting the client’s commission. Consequently, Xiruan Zhigu should have noticed that the accused infringing logos, such as “Daluwang”, were highly similar to Lukewang Company’s prior registered trademark, likely constituting infringement.
2. The case occurred following the Jiu Se Lu Wang case (a trademark infringement case involving the same parties). As the trademark agency providing similar services in that case, Xiruan Zhigu was fully aware of the well-known status of the trademark and the high likelihood of infringement by the accused logos. Nevertheless, the agency continued to provide services and even assisted in transferring the No. 11731605 trademark, which was suspected of being registered in bad faith.
3. Xiruan Zhigu facilitated the registration of Hong Kong Sky Company on behalf of the infringing parties and subsequently applied for trademarks “Daluwang” under its name. It acted as an intermediary, helping to find and purchase infringing signs similar to “Lukewang,” thereby earning a profit margin. Evidence from conversations between Xiruan Zhigu staff and the infringing individuals reveal that staff of Xiruan Zhigu provided a selection of infringing marks for consideration and actively advised on registration and purchase strategies. The agency played a substantial guiding role in guiding the infringing parties on matters such as company registration in Hong Kong, the selection of infringing marks, and the decision to buy or apply for registration.
Therefore, while Xiruan Zhigu was not the direct registrant of the No. 11731605 trademark, its actions clearly violated good faith and professional ethics, and it materially contributed to or facilitated the infringement. Hence, it should bear full liability for the alleged infringement. Accordingly, the appellate court affirmed the ruling that Xiruan Zhigu is jointly liable to compensate for economic losses and reasonable expenses, totally CNY 2 million.
