By Evelyn Li
Levi Strauss recently won a trademark lawsuit in China against four Chinese companies on its trademark infringement claim regarding its double-arc stitching design. Levi asked the court to order the four companies to immediately stop using its double-arc stitching design, destroy all infringing products and delete all Internet ads. Moreover, it also asked for compensation of 1 million yuan from the infringers, “Jasonwood” brand owners and their manufacturer. The Chinese companies argued that they designed their trademark based on the letter “J,” and it is different from Levi Strauss’ design. But the court was not convinced.
The main issues in the case were: (1) whether the two trademarks were in fact similar; (ii) whether the double-arc mark on Levi Strauss’s jeans has gained distinctiveness as required by the Trademark Law of China so that any similar marks used on the same class of goods would cause confusion among the relevant public; and (iii) whether the plaintiff Levi Strauss is entitled to recover a damage of 1 million yuan based on the infringement of its trademark.
By comparing the two trademarks in dispute, the designs are could likely to be found identical. Thus, the defendants argued that the “double-arc” design used on jeans’ back pockets is too common of a practice to be granted an exclusive right under the protection of the Trademark Law of China. Such an argument has weakness because, first of all, the Levi Strauss’s trademark is a registered mark in mainland China and therefore enjoys all the exclusive trademark rights under the law; secondly, Levi Strauss has already been using the mark in the course of commerce in the mainland market for more than 10 years and has done a significant amount of promotion in educating the public with the trademark on its product. Under Article 11 of the Trademark Law of China, those marks that lack distinctive characteristics may not be registered as a trademark unless they later obtained distinctive characteristics and can be easily identified through use. So based on the facts admitted by the court, the relevant public has become so familiar with Levi Strauss’ trademark that they would be confused by an almost identical mark on jeans produced by another company.
As to the damages of a million yuan, which Levi Strauss asked for, the court has reduced the amount to 350,000 yuan. The court took the following argument into consideration in reaching the final decision on such number: that Levi Strauss is a famous mark; that the defendants’ infringing goods have been sold in a relatively large number covering a broad geographic area and therefore has harmed the Plaintiff’s trademark to a relatively high extent; that the defendants ignored all of the attorneys’ letters sent from the plaintiff asking for a halt in sales of the infringing goods and therefore shows the malice on the defendants part; that the defendant has used its mark in the course of commerce in its own stores with promotions on its own brand and therefore the defendant will likely suffer great loss from losing their right to use the infringing trademark.
The defendants are planning to appeal the court’s decision.
The following are a few take-a points to be gleaned from the matter:
First, as more and more internationally well-known brands are entering Chinese mainland market, cases like this are becoming common to the Chinese courts. Companies should not be surprised to find similar designs to their trademarks or a transliteration on their marks in Chinese characters in the market. (“Hermes” lost its case to a Chinese company who owns the Chinese transliteration to the Hermes trademark.)
Those companies who own the famous trademarks should act timely on obtaining a trademark registration with the State Trademark Office. In filling the application, counsel should always consider adding the Chinese transliteration to their original trademark of other languages. Always remember that China is a “first to register” country.
Second, registration strategy is very important to big brand holders. Usually, it is beneficial to register one main mark with a series of subsidiary marks along the line so that the protection could be extended to cover more goods of the same company, and to cover a wider range of variations on the marks. Besides, many restrictions on the main mark registration will not apply to the subsidiary marks. So companies should be more flexible and creative on their choices of words or symbols on those subsidiary marks.