Mengchun’s Comments:
Chinese Judicial interpretations and prior case law have long established that repeat infringement should give rise to punitive damages. However, proving repeat infringement remains a challenge in judicial practice. A recent decision by the Guangzhou Yuexiu District Court offers a valuable reference on how to build an effective evidentiary chain.
Key issue involved:
How can a rights holder establish evidence of repeat infringement to support a claim for punitive damages?
Comments:
The rights holder preserved evidence related to the infringer’s online activity—including the contents from their Weidian store (a popular Chinese e-commerce site for individual sellers) and WeChat account—through notarization and timestamps. The rights holder also obtained a court-issued attorney investigation order to collect information on the business entity behind the infringing store, its sales activity, the real-name payment recipient, and transaction records. These materials formed a chain of evidence.
Based on the above, the court found that the infringer, after settling a previous infringement lawsuit and assuming liability, redirected customer traffic from the original infringing channel to new sales platforms and continued the same infringing conduct in a more concealed manner. Such behavior constituted repeat infringement and justified the imposition of punitive damages.
Case Background:
Cartier, the well-known luxury jewelry and watch brand, holds trademark rights that have been repeatedly recognized as well-known by China’s trademark authority and the courts.
In 2020, Cartier sued an individual named Zhang for selling counterfeit Cartier products on the Weidian platform. The parties reached a settlement, and Cartier withdrew the lawsuit. However, Zhang did not remove the infringing images and instead continued the infringement as follows:
- Displayed a WeChat QR code on the original Weidian store, directing users to add the account;
- Posted large volumes of infringing Cartier watch images on the associated WeChat Moments feed;
- Recommended another Weidian store through the same WeChat account, which actively promoted various Cartier watch models with marked prices, using Cartier’s registered trademarks on the watch faces.
Cartier filed a new lawsuit, requesting that Zhang be ordered to cease infringement and pay RMB 3 million in punitive damages and reasonable costs.
Summary of Court Findings:
In July 2020, Cartier filed suit against Zhang for selling infringing goods via Weidian. A settlement agreement was signed on January 22, 2021, in which Zhang acknowledged Cartier’s rights, agreed to cease all infringing conduct through any channel or distributor, destroy infringing inventory, and pay RMB 120,000 in compensation. Thus, Zhang was clearly aware of both Cartier’s rights and the infringing nature of his conduct.
After the court approved the withdrawal of the initial suit on February 3, 2021, Zhang did not delete the infringing content. Instead, he redirected traffic from Weidian to WeChat, where he continued to display, promote, and sell counterfeit Cartier watches, explicitly indicating in transactions that they were not legal. This showed he knowingly sold counterfeit goods for unlawful gain.
Zhang also funneled customers to other infringing Weidian stores and circulated product images covering multiple Cartier watch collections. His conduct was deemed serious and malicious.
Zhang used related individuals to register and operate WeChat accounts for infringing sales and accepted payments via WeChat Pay and Alipay to evade enforcement.
Court Decision:
Zhang was ordered to:
- Immediately stop selling the infringing watches;
- Delete all infringing promotional images and trademarks from his online stores;
- Pay RMB 723,723 to Cartier (comprising RMB 668,723 in punitive damages—double the compensatory base—and RMB 55,000 in reasonable costs);
- Bear Cartier’s full evidence preservation cost of RMB 5,000.
Takeaway:
Chinese courts are willing to impose punitive damages for trademark infringement—but only when clear, credible evidence of repeat infringement is presented. A notarized record of online conduct, combined with court investigation orders, can be an effective way to build a compelling case.
Court:
Guangzhou Yuexiu District People’s Court
Final Decision Date:
November 29, 2024
Case No.:
(2023)粤0104民初21122号
(2023) Yue 0104 Min Chu No. 21122
hvzwvoudrertmxopfmxfsgxswkfwky