I. Case Review: The Infringement Trail from First Offense to Repeat Offense
In 2021, a maternity and baby products company (the plaintiff) sued a maternity and baby products store in Yinchuan City, Ningxia Hui Autonomous Region (the defendant) at the Lingwu People's Court for trademark infringement. After trial, the court issued a judgment on June 20, 2022, ordering the defendant to immediately cease the acts of infringing the plaintiff's exclusive right to use the registered trademark and compensate the plaintiff for corresponding economic losses.
However, after the judgment took effect, the defendant failed to truly learn its lesson. In 2024, with full knowledge that it should avoid using the brand name, the defendant once again arbitrarily used the plaintiff's registered trademark logo in various promotional materials, including store signboards, WeChat business cards, enterprise names, Baidu Maps and shopping bags. The plaintiff held that the defendant's acts seriously infringed its exclusive trademark right and constituted unfair competition, with obvious subjective malice and serious circumstances, and thus should bear liability for punitive damages. It therefore sued the defendant again at the Lingwu People's Court.
II. Court Trial: Repeat Infringement Constitutes "Intent + Serious Circumstances"
After trial, the Lingwu People's Court held that the plaintiff's legally obtained exclusive right to use the registered trademark was valid and shall be protected by law. The brand name marked on the defendant's store and part of its decoration was visually identical to the involved registered trademark, constituting an identical trademark, and the commodity category fell within the approved scope of use of the trademark. In accordance with Article 57 of the Trademark Law of the People's Republic of China, the defendant's acts had constituted trademark infringement and it should bear civil liability for ceasing the infringement and compensating for losses.
The core dispute in this case was whether punitive damages should be applied. According to Article 63 of the Trademark Law, for malicious infringement of the exclusive right to use a registered trademark with serious circumstances, the compensation amount may be determined as not less than one time but not more than five times the amount calculated based on the right holder's losses, the infringer's profits or the trademark licensing fee.
The court found that the defendant committed the same infringement act again less than two years after being ordered to cease infringement and bear compensation liability on June 20, 2022, which constituted a typical case of repeat infringement. Such acts indicated two points: first, the defendant had obvious subjective malice and continued the infringement with full knowledge of its illegality; second, the defendant disregarded the binding force of the effective judgment, amounting to serious circumstances. Therefore, this case fully met the conditions for the application of punitive damages.
III. Judgment Result: Double Punitive Damages Highlight Judicial Deterrence
Ultimately, the Lingwu People's Court successfully mediated the case and ordered the defendant to pay double punitive damages on the basis of compensatory damages.
This judgment reflected the court's tough stance on malicious and repeat infringement acts. The core function of the punitive damages system is not only to compensate the right holder for losses, but also to effectively deter potential infringers by increasing the cost of illegal acts and safeguard the market order of fair competition.
IV. In-Depth Analysis of Key Legal Points
(1) What is "Repeat Infringement"?
Repeat infringement refers to the act where an infringer commits the same or similar infringement acts again after being confirmed as an infringer by an effective court judgment and ordered to bear civil liability. In this case, the defendant infringed again in 2024 after the judgment took effect on June 20, 2022, with a short time interval and identical infringement methods, constituting a typical repeat infringement.
(2) Conditions for the Application of Punitive Damages
Pursuant to the Trademark Law and relevant judicial interpretations, two elements must be satisfied for the application of punitive damages:
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Subjective intent: The infringer commits the infringement with full knowledge or constructive knowledge that its acts infringe on others' trademark rights;
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Serious circumstances: Including repeat infringement, engaging in infringement as a business, forging evidence, refusing to perform preservation orders and other circumstances.
In this case, the defendant infringed again despite the existing effective judgment, showing obvious subjective malice, and its act fell into the statutory category of "committing the same or similar infringement acts again after being subject to administrative punishment for infringement or ordered to bear liability by a court judgment", which constitutes serious circumstances.
(3) Calculation Method of Punitive Damages
Punitive damages amount = Base amount (right holder's losses / infringer's profits / licensing fee) × Multiplier (1 to 5 times). In this case, the court exercised its discretion to apply double punitive damages based on the specific circumstances of the case, which not only reflected the punishment for malicious infringement but also maintained the rationality of judicial discretion.
V. Typical Significance and Implications
This case is a typical example of the Lingwu People's Court fully implementing the punitive damages system, with the following important significance:
First,
crack down harshly on malicious infringement. The application of punitive damages substantially increases the illegal cost of infringement, makes "malicious infringement" pay a heavy price, and effectively curbs the dilemma of "winning the lawsuit but losing the market" in rights protection.
Second, safeguard judicial authority. The defendant's act of infringing again in disregard of the effective judgment of June 20, 2022, was a challenge to judicial authority. The application of punitive damages demonstrated the court's firm determination to safeguard the authority of effective judgments.
Third, optimize the business environment. As an important force in intellectual property adjudication in Ningxia, the Lingwu People's Court guides market entities to respect and protect innovation by strictly implementing the punitive damages system, providing strong judicial protection for creating a law-based business environment.
VI. Compliance Suggestions for Business Operators
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Rectify in a timely manner: Upon receiving an infringement notice or judgment, immediately cease the use of the allegedly infringing logo and conduct a comprehensive inspection of its use on store signboards, promotional materials, online platforms and other channels.
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Respect prior rights: In business activities, avoid using well-known brand names in the same industry to prevent unfair competition acts such as "free-riding" and "passing off as a famous brand".
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Operate in good faith and in accordance with the law: Do not harbor the fluke mentality of "continuing business under a different name". Evasive measures such as repeated registration in the name of family members and continuing business at the original address may be pierced and recognized by the court, and the actual controller shall be held jointly and severally liable.
Conclusion
Intellectual property protection is an important institutional guarantee for encouraging innovation and safeguarding fair competition. Through the trial of this case, the Lingwu People's Court sent a clear signal to society: zero tolerance for malicious and repeat infringement, and making infringers "suffer so much that they dare not infringe again". In this case, since neither the plaintiff's actual losses nor the defendant's infringing profits could be determined, and there was no market research report on the popularity of the trademark and the extent of damage, the court finally took the 5,000-yuan compensatory damages as the base amount and determined the double punitive damages of 10,000 yuan. In addition, it discretionarily supported part of the plaintiff's reasonable expenses for rights protection. Ultimately, the two parties reached an agreement on the compensation amount through mediation.
