Electrolux victorious against knock-off brand - but damages are low

China

Home appliance brand Electrolux has scored a victory in the Chinese courts against the knock-off brand Elekes.

Elekes is a local brand based in Qingdao, a major city in eastern China (the same place where Tsingtao beer is made). Elekes was engaged in the home appliance business and used a trade name which contained the same Chinese characters as Electrolux’s Chinese brand name, 'Yi Lai Ke Si'. Its products were marked with the Elekes brand and the packaging bore the misleading trade name. 

Electrolux began receiving consumer complaints concerning quality defects, but it turned out that the products at issue were Elekes’.

Electrolux brought lawsuits against Elekes and its distributors in Shanghai and Ningbo. In February 2012 the Ningbo court ruled in favour of Electrolux and awarded damages of Rmb280,000. The court also ordered Elekes to change its corporate name.

This case is similar to a dispute involving Starbuck and a local coffee shop, which occurred a few years ago. The local coffee shop used Starbuck’s Chinese name in its trade name and on its shops. Starbucks won the case and subsequently filed suit against other infringers in different cities, including one in Qingdao, where Elekes is based.

A Chinese newspaper commentator welcomed the outcome of the Electrolux case, but pointed out that the amount of damages awarded was very low. Arguably, the infringer had obtained profits that vastly surpassed the amount of damages awarded by the court. The Chinese courts' failure to grant sufficient compensation will thus continue to have an impact on brand owners’ enforcement decisions.

He Jing, ZY Partners, Beijing

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