High fashion and unfair competition

31-07-2010

Stephen Yang

The Ningbo Intermediate People’s Court in Zhejiang Province recently announced its first instance decision on the dispute between Guccio Gucci SPA and Ningbo Outlets Shopping Co. Ltd, after Gucci sued the latter.

The Ningbo Intermediate People’s Court in Zhejiang Province recently announced its first instance decision on the dispute between Guccio Gucci SPA and Ningbo Outlets Shopping Co. Ltd, after Gucci sued the latter for trademark infringement and unfair competition. The court found that the defendant used the trademark ‘Gucci’ without authorisation, which constituted unfair competition. It ordered the defendant to stop using the trademark Gucci immediately and pay RMB50,000 ($7,350) in compensation.

In May 1983, Guccio Gucci SPA registered its Gucci trademark for merchandise including clothing, footwear, headwear, socks, ties, travelling bags and purses. On October 28, 2009, the company filed suit at the intermediate court against Ningbo Outlets for trademark infringement and unfair competition.

Guccio Gucci stated that as a shopping centre for clothing, apparel, shoes, hats, bags and other fashion merchandise, Ningbo Outlets, without authorisation, prominently used the same word Gucci as the sign of its No.108 shop selling the same goods. It also allegedly used the name Gucci for advertising, infringing the plaintiff ’s trademark in an act of unfair competition. Guccio Gucci asked the court to order Ningbo Outlets to immediately stop its infringement and pay RMB500,000 ($73,500) in damages.

“The evidence that Guccio Gucci provided in this case did not prove that the defendant used the sign Gucci as a trademark for goods. Therefore, the accusation of trademark infringement could not be established because it lacked a factual basis.”

The intermediate court found in favour of the plaintiff. In view of the fact that the defendant had not yet officially begun trading, and the reasonable costs that the plaintiff spent on dealing with the infringement, the court decided that the defendant should pay the plaintiff RMB50,000 in compensation. However, the trademark Gucci used by Ningbo Outlets is not a service mark in a legal sense. The evidence that Guccio Gucci provided in this case did not prove that the defendant used the sign Gucci as a trademark for goods. Therefore, the accusation of trademark infringement could not be established because it lacked a factual basis.

Microsoft windfall in Tomato Garden case

On May 13, 2010, the plaintiff Microsoft and the defendants reached a settlement at the Suzhou Intermediate People’s Court in Jiangsu Province in the Tomato Garden case. Microsoft received compensation of RMB3 million ($439,000).

On August 20, 2009, the Huqiu District Court in Suzhou gave its verdict on the criminal part of the Tomato Garden case, in which the defendants were fined and received criminal sanctions for their large-scale online software piracy.

Then on September 2, 2009, Microsoft filed a civil action for damages with Suzhou Intermediate People’s Court on the grounds that four defendants, including Chengdu Share Software Network Technology, infringed software copyright. Microsoft initially claimed for a general compensation of RMB8 million ($1.17 million), but settled for RMB3 million following the court’s mediation.

Stephen Yang is a partner at Peksung Intellectual Property Ltd. He can be contacted at: yyong@peksung.com

This article was first published on 01 August 2010 in World IP Review

Gucci, trademark infringement

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