Hit with RMB 5 Million in Damages! Toy Factory Slammed with Maximum Punitive Penalty for Piggy-backing on “Thomas” Brand
The Fujian Provincial High Court has upheld a first-instance judgment, confirming a triple-damage punitive award and ordering four defendants—including YU Toys Factory and affiliated YU companies—to pay GBP-owner Gullane (Thomas) Limited (“Gullane”) RMB 5 million in compensation, the full amount claimed.
The court found that the marks used by the defendants on their toy train sets were virtually identical to eight registered trademarks owned by Gullane, infringing the latter’s exclusive rights.
Background
Gullane, the British studio behind the “Thomas & Friends” franchise launched in 1984, operates one of the world’s best-known children’s IPs, broadcast in 185 countries and a perennial top seller on Chinese e-commerce and in shopping malls. Its “Thomas” and “Thomas & Friends” word/device marks are validly registered and continuously used in China, enjoying high reputation and distinctiveness.
The defendants, domestic manufacturers of low-price track toys sold online and in wholesale markets, prominently printed “Thomas”, “CC Thomas” and similar wording on packaging and promoted the goods as “Thomas-compatible” or “same style as Thomas”. Gullane argued the practice caused widespread confusion and sued in the Xiamen Intermediate People’s Court, demanding an injunction, destruction of stock and punitive damages of RMB 5 million.
First-instance ruling
After comparing the marks, Xiamen Intermediate Court held that some were identical and others highly similar, easily misleading consumers. Evidence showed the defendants continued selling even after the lawsuit was filed, demonstrating clear bad faith and litigation misconduct. Applying treble punitive damages under the Trademark Law, the court awarded the full RMB 5 million claimed.
Appeal
All four defendants appealed to Fujian High Court, disputing ownership, similarity analysis and the quantum, and argued punitive damages were inappropriate.
Second-instance findings
Fujian High Court confirmed:
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Infringing marks are identical or highly similar to the cited marks from the perspective of the average consumer.
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The defendants, as industry players, knew or should have known of Gullane’s marks yet deliberately copied them—satisfying the “wilful” requirement.
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They had previously been administratively penalised for infringement, persisted in the conduct on a large scale for years, and refused to provide financial records without justification—meeting the “egregious circumstances” threshold.
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After trebling, the calculated damages exceeded the RMB 5 million requested; the court therefore maintained that amount.
Final decision
The appeal was dismissed and the original judgment affirmed: stop the infringement, destroy remaining inventory and pay RMB 5 million—one of the highest punitive trademark awards in Fujian to date.
