Trademark owner finally obtains execution of settlement agreement signed in 2011

China

Bernard Controls SA has obtained the full execution of a settlement agreement entered into with an infringer in 2011.

Bernard Controls is a world-leading manufacturer of electric valve actuators. Beijing Bernard Controls Equipment Co Ltd (Beijing Bernard) is a subsidiary established by Bernard Controls to manufacture and distribute its products in China.

Bernard Controls owns the registered trademark BERNARD (and device), depicted below, covering goods in Classes 7, 9 and 11 of the Nice Classification (“machine tools; engines and motors (other than for land vehicles); transmission couplings (non electric) and transmission components (excluding those for land vehicles)"; "scientific (other than medical), nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life-saving and teaching apparatus and instruments” and "apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes, installations for water or gas distribution, cleaning and purification”), as well as services in Class 37 ("construction and repair services”).

The exclusive right to use this registered trademark expires on September 27 2016.

On June 7 2004 Bernard Controls applied for the registration of the trademark 伯纳德 ('Bernard' in Chinese) in Classes 7 and 9, and obtained registration on May 21 2007 and September 21 2007, respectively.

On May 24 2007 Bernard Controls granted Beijing Bernard an exclusive licence to use the aforementioned registered trademarks.

In April 2008 a company in Tianjin called Bernard (Tianjin) Instrument Technology Co Ltd (Tianjin Bernard) came to Bernard Controls’ attention. In addition to registering Bernard Controls’ registered trademark 伯纳德 as its trade name, Tianjin Bernard, which is engaged in the same business activities as Beijing Bernard, was blatantly and prominently using Bernard Controls’ registered trademarks in its premises, promotion materials and advertisements, as well as on its website. Tianjin Bernard also applied for the registration of other marks, depicted below, that were identical, or highly similar, to the registered trademarks of Bernard Controls.

In 2009 Bernard Controls and Beijing Bernard brought suit against Tianjin Bernard before the Tianjin Number 1 Intermediate Court. The court issued its judgment on October 27 2010; it upheld the plaintiffs' unfair competition claim, but rejected their claim of trademark infringement.

The plaintiffs later appealed to the Tianjin Higher Court. The plaintiffs and the defendant, under the court’s mediation, reached a settlement agreement. On June 28 2011 the Court of Appeal issued the civil settlement judgment, which was served to both parties and became effective upon receipt.

As per the terms of the agreement, Tianjin Bernard was obliged to:

  1. stop using any trade name and domain name containing 'Bernard' or '伯纳德' from the date on which the agreement entered into force;
  2. stop using any trademark identical, or similar, to the registered trademarks of Bernard Controls from the date on which the agreement entered into force;
  3. revoke its trade name and domain name, and withdraw its applications for registration of the disputed trademarks before December 31 2011; and
  4. indemnify the plaintiff by paying a certain amount of damages.

Tianjin Bernard paid the damages to Bernard Controls, but did not comply with the other terms of the settlement agreement.

In November 2012 Bernard Controls applied for a compulsory execution order to the Tianjin Number 1 Intermediate Court.

Following the court’s intervention, Tianjin Bernard withdrew its trademark applications and revoked the domain name. The revocation of its trade name is also in progress.

In practice, the enforcement of a judgment ordering the modification of a trade name and the withdrawal of a trademark application can be very difficult - the judgment is not necessarily viewed by the authorities (eg, the State Administration for Industry and Commerce) as a compulsory measure that they must enforce. There is no easy procedure to ensure that a court order is executed.

Zhang Yan and Wang Jue, Wan Hui Da Law Firm & Intellectual Property Agency, Beijing

Wan Hui Da represented the plaintiffs in this case 

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