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    Adidas Won First Trademark Infringement Dispute Relating to Punitive Damages of Zhejiang Province


    Source: Wenzhou News

    In recent days, Adidas has won a compensation of over RMB 100 million in a trademark infringement dispute. The Intermediate People's Court of Wenzhou City, Zhejiang Province issued the judgment of second instance. This is the first case relating to punitive damages of Zhejiang province.The Adidas Corporation owns the trademark rights of the "adidas" series and enjoys high popularity. The Zhengbang Company, which was registered and established by Ruan, Guoqiang, etc., bad been seized three times from 2015 to 2017 by the administrative departments for shoe upper products violating the "adidas" series trademark rights of Adidas Corporation, and was subjected to administrative penalties, with an accumulated number of more than 17,000 pairs of infringing products.The Adidas Corporation filed a civil suit for the third time, requesting for punitive damages and Ruan Guoqiang, etc. to compensate economic losses of RMB 2641695.89, and reasonable expenses of RMB 40714.8.

    The court of first instance held that Zhengbang Company had infringed trademark right and was subject to compensate the Adidas Corporation for economic losses of RMB 200,000 (including reasonable expenses). The Adidas Corporation was not satisfied with the judgment and filed an appeal.

    The Wenzhou Intermediate People's Court held that the court of first instance did not comprehensively and objectively review the evidences provided by the Adidas Corporation and the compensation, i.e., RMB 200,000 was not enough due to the serious circumstances. The court of second instance set the unit price at RMB 189/ pair to RMB 1799/pair on Tmall and JDcom for certified shoes as the basis for calculation, and took the evidence of the gross profit margin of 50.4% shown in the accounting report of the year 2017 provided by the Adidas Corporation. Finally, the Adidas Corporation's economic losses were determined to be RMB 345779.28.

    Zhengbang Company bad been seized three times from 2015 to 2017 by the administrative departments for shoe upper products violating the "adidas" series trademark rights of Adidas corporation. In the process of inquiry, Zhengbang Company’s subjective malice was very obvious, because Ruan Guoqiang had admitted the infringement fact and said the involved shoe upper products were sold well and gained high profits. The court held that the alleged infringement lasted a long time and the consequences were severe, which belonged to a serious situation. Finally, the amount of punitive compensation of RMB 1,037,337.84 is determined by three times the economic loss of Adidas of RMB 345,779.28. Adidas Corporation had paid RMB 40678.8 (including attorney fee) for safeguarding the trademark rights, which was reasonable to be supported. In general, The Wenzhou Intermediate People's Court issued the decision that Ruan Guoqiang, etc. were subject to compensate the Adidas Corporation economic losses and reasonable expense of over RMB 1.07 million.