Case Brief

Schneider Electric Europe (hereinafter referred to as Schneider Europe) licensed the registered trademarks "" and "施耐德 (Schneider)" approved for use on Class 9 circuit breakers, electric switches and other products to Schneider Electric (China) Co., Ltd. (hereinafter referred to as Schneider China) in which it invested. Schneider China has invested in multiple electrical production enterprises across the country, and most use "施耐德 (Schneider)" as their corporate name. The "", "施耐德 (Schneider)" and other series of trademarks have a high market reputation in the electrical industry and the market. Schneider China believes that the prominent use of the "施耐德（Schneider）" and "SCHNEiDER" marks of Suzhou Schneider Elevator Co., Ltd. (hereinafter referred to as Suzhou Schneider) constitutes trademark infringement, and its registration of a corporate name containing the "施耐德 (Schneider)" name and use of a domain name similar to the core element "Schneider electric" of the "" trademark constitutes unfair competition, so it filed a lawsuit in court, requesting that Suzhou Schneider stop the infringement, change the corporate name, compensate for losses, and eliminate the impact. Suzhou Schneider argued that the use of the mark involved was authorized by an overseas company, and there was no intent to freeride on the goodwill of the trademark. After trial, the court of the first instance held that the alleged behavior constituted trademark infringement and unfair competition and ordered Suzhou Schneider to immediately stop the alleged behavior, handle the procedures for changing the corporate name, compensate for losses of 40 million RMB and reasonable expenses of 150,000 RMB, and publish a statement to eliminate the impact. The High People's Court of Jiangsu Province held in the second instance that Suzhou Schneider was aware of the popularity of the trademark and the mark involved in the case, and signed a brand use agreement with an overseas company to obtain authorization for a mark similar to the trademark involved in order to freeride on the goodwill of the trademark involved. The first instance judgment was correct in its determination of trademark infringement and unfair competition. Taking into account the popularity and market value of the trademark involved, the subjective malice of Suzhou Schneider, the time and scale of the infringement, and other factors, the amount of 40 million RMB in compensation determined by the first instance judgment was not improper. The High People's Court of Jiangsu Province rejected the appeal in the second instance judgment and upheld the original judgment.

Typical Significance

This case is a typical example of severely punishing "free-riding," counterfeiting, and confusion behaviors. When there is sufficient evidence proving that the profits from infringement exceed the statutory maximum limit of compensation, the People's Court reasonably distributes the burden of proof and correctly applies the discretionary compensation method to determine the amount of compensation as appropriate, which effectively cracks down on market confusion behaviors that piggyback on the goodwill of others, significantly increases the cost of infringement, and fully reflects the clear judicial orientation of effectively strengthening the protection of intellectual property rights.

(Source of case: Supreme People's Court of the People's Republic of China)