Well-known Trademark Wins 505.5 million RMB in Damages on Appeal—More Than Six Times the First-Instance Award
A final judgment that raised the damages from 800,000 RMB to 5.05 million RMB has ended a two-year-plus trademark battle waged by JMA Aluminum—one of China’s largest aluminum-extrusion companies—and set a new judicial benchmark for punishing malicious trademark infringement.
Plaintiff JMA Aluminum Co., Ltd. is a market leader and benchmark brand in China’s aluminum-profile sector. Its “JMA (坚美)” trademark enjoys enormous prestige, having been officially recognised as a “Well-Known Trademark in China” and honoured as a “National Technology-Innovation Model Enterprise”, “Industrial Quality Benchmark”, “Green Factory” and “Single-Champion Product in Manufacturing”. The mark therefore carries enormous commercial value.
First-instance victory
In April 2020 JMA discovered a competing product branded “Jian-Mei Lü (坚美吕)” and immediately filed an invalidation request, arguing that the mark was confusingly similar to its own. On 20 November 2020 the National Intellectual Property Administration finally declared “Jian-Mei Lü” invalid after more than three years on the market.
Nevertheless, aluminium products bearing the cancelled mark continued to circulate widely in Fuqing, Hangzhou, Linwu, Ningbo, Shanghai, Wugang, Changsha and other cities. JMA therefore sued the manufacturer in the Intermediate People’s Court of Zhejiang Province, demanding an immediate cessation of infringement and 5 million RMB in damages.
The court held that the defendant’s “Jian-Mei Lü” mark was similar to JMA’s mark in appearance, advertising slogans, intended use and packaging, and therefore infringed JMA’s exclusive trademark rights. Because exact loss or profit figures could not be ascertained, the court awarded 800,000 RMB in damages and reasonable costs.
JMA, however, argued that the nationwide scale of infringement and the defendant’s clear bad faith merited a far higher amount, and appealed to the Zhejiang High People’s Court.
Second-instance retrial: the key factors behind the increased award
The High Court found:
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“JMA” is exceptionally well-known in the industry; the defendant, as a direct competitor, nonetheless registered and used a highly similar mark, manifestly attempting to ride on JMA’s reputation.
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Court-subpoenaed VAT returns and other financial records revealed that the defendant operated several brands simultaneously. Even if its total sales were apportioned evenly, the profit attributable to the infringing brand alone far exceeded 5 million RMB.
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Evidence submitted by JMA—including notarised purchases, nationwide evidence-preservation campaigns and substantial legal, notarial and investigative expenses—demonstrated significant reasonable costs incurred to stop the infringement.
Taking these factors together, the court concluded that the first-instance award of 800,000 RMB was grossly inadequate both to punish the infringement and to compensate JMA. It therefore raised the total compensation to 5.05 million RMB.
Determining appropriate damages in trademark cases has long been a judicial challenge. By law, compensation is calculated in the following order: the right holder’s actual losses; if these cannot be proven, the infringer’s illicit gains; if these are also unclear, a reasonable multiple of the trademark licence fee; and, as a last resort, statutory damages based on the circumstances of the infringement.
This second-instance judgment surpassing 5 million RMB was possible only because the court conducted an in-depth examination of the actual scale and profitability of the infringement and fully recognised the substantial reasonable costs incurred by the right holder in enforcing its rights.
