Owner of well-known mark ordered to pay $2.8 million in damages

The Hangzhou Intermediate People's Court has ordered Generation 2000 - a well-known Hong Kong-based fashion chain with over 400 franchised counters/outlets - and a number of its franchisees in China to pay Rmb20 million (approximately $2.8 million) in damages to an individual, Zhao Hua, for infringing his 2000 trademark.

Generation 2000 is the owner of the well-known trademark G2000, which was registered in December 1992 for goods in Class 25 of the Nice Classification (clothing, footwear and headgear). Zhao owns the 2000 trademark, which was registered in 1997 for "socks, gloves, scarves, veils, mantillas, ties, belts and waistbands". Under the Chinese classification system, the goods of the parties are dissimilar because they fall within different subgroups in Class 25.

Generation 2000 filed an action for the invalidation of the 2000 trademark before the Trademark Review and Adjudication Board. The board refused to invalidate the mark. On appeal, the board's decision was upheld by the lower and upper courts of Beijing. The grounds or arguments for the decisions remain unknown.

Between 2000 and 2006, upon the petition of Zhao, the administrative authorities of Guangzhou and Beijing, among others, had conducted raids against G2000-branded goods for infringement of the 2000 mark.

In the case at hand, the Hangzhou Intermediate People's Court held that the sale of goods such as socks, gloves and ties bearing the trademark G2000 constituted infringement because G2000 was similar to 2000. Having regard to the duration, geographical scope and nature of the infringement, as well as to the price of the infringing goods, the court awarded Rmb20 million to Zhao in damages.

Under the law, damages are assessed based on either the actual loss of the plaintiff or the actual profit of the defendant. Where it is difficult to assess the loss or profit, the court has discretion to award statutory damages of up to Rmb500,000 (approximately $70,000). It is unknown what evidence was available to make the court believe that Generation 2000's profit was particularly substantial.

Generation 2000 indicated that it would appeal.

Howard Tsang, Wilkinson & Grist, Beijing