The Guangdong Higher Court made a final judgment, ordering two Chinese companies, Shanghai Qixiang Trading Co., Ltd. (defendant A) and Shenzhen Huasheng Business Development Co., Ltd. (defendant B) to pay plaintiff Tommy Hilfinger Licensing B.V. damages of RMB 5 million (approximately US$ 723,985) on November 4, 2022. ((2021) Yue Min Zhong No. 2215.)
Tommy Hilfinger argued that the two defendants jointly infringed its trademark rights over Reg. No. 328572 for TOMMY HILFIGER, Reg. No. 4054206 for TOMMY, and Reg. No. 328575 for 
, and for several more trademarks, and claimed damages of RMB 8 million (US $1,158,376).
Defendant A counterargued that it made legitimate use of its own trademarks under Reg. No. 5549644 for 
and Reg. No. 14231946 for 
. However, the court held that the signs 
, 
, 
, 
, and 
, among others, actually used by defendant A, are obviously different from its registered trademarks in color, graphic composition, case, and font, which changed the distinctive character of its registered trademarks in the process of actual trademark use and constituted trademark infringement.
The court considered the following factors in determining the amount of damages:
1. The plaintiff’s registered trademarks enjoy a high reputation;
2. Defendant A was guilty of obvious bad faith. Defendant A operated its business in the same industry as the plaintiff, so defendant A should have known that using the above logos could infringe the plaintiff’s trademark right;
3. The quantity of infringing conduct was significant and took place over a long time. Defendant A sold the infringing goods through offline stores in nearly 30 cities and online at Taobao and JD, for at least two years; and
4. Defendant A made a relatively high profit.
Defendant B, Shenzhen Huasheng, counterargued that the clothes sold in defendant A’s store within its shopping mall were provided by defendant A. Consequently, defendant B contended that it should not be held liable for compensation. However, the court determined that although defendant B had reviewed defendant A’s trademark registration certificates and license agreements, as a professional shopping mall, it held a higher level of responsibility compared to ordinary lessors. Shopping malls are expected to exercise greater diligence in ensuring that the products sold within their premises do not infringe upon the intellectual property rights of others.
Defendant B, as the operator and manager of a large outlet store, only needed to pay minimal attention to discover that defendant A was actually using a famous trademark that bore similarities to the plaintiff’s trademarks. However, defendant B failed to fulfill its obligation to scrutinize defendant A’s business activities within its premises. Consequently, defendant A was allowed to operate in defendant B’s premises for nearly a year despite clear indications of trademark infringement.
Due to defendant B’s evident faults or neglect in the matter, it is deemed jointly and severally liable for a portion of the damages, up to RMB 100,000 (US $14,480).
