Against the backdrop of strengthening intellectual property protection, imposing heavy costs on malicious infringers has been a key focus in judicial practice. On April 22, 2026, the People's Court of Haidian District, Beijing issued a typical trademark infringement case involving "Tongrentang", providing a vivid reference for this issue. A massage shop was ordered to pay 1.5 million yuan in punitive damages for prominently using the "Tongrentang" mark for business promotion and continuing infringement after receiving a lawyer's letter from the right holder, fully upholding the right holder's claim.
A Time-Honored Brand Targeted by Free-Riding: Deliberate Infringement
With a history of more than 300 years, "Tongrentang" is a renowned traditional Chinese medicine brand certified as one of the first batch of "China Time-Honored Brands" by the Ministry of Commerce in 2006, enjoying extremely high popularity and reputation among consumers. A group company, as the legitimate owner of the "Tongrentang" trademark series, holds the exclusive right to use the registered trademarks in categories such as medical clinics.
However, the group company found that a massage shop unscrupulously used the words "Produced by Beijing Tongrentang", "Tongrentang" and relevant graphic marks prominently in its offline store and online platforms to attract customers and promote services. This not only misled consumers into believing the shop was affiliated with the century-old brand, but also improperly profited from the long-accumulated brand reputation of others.
Notably, the right holder sent a formal lawyer's letter to the massage shop on March 30, 2023, clearly pointing out the infringement and demanding cessation. Nevertheless, the shop ignored the warning and continued the infringing acts through the original channels. This deliberate infringement became the key evidence for the court to find "subjective malice".
Precise Calculation of Compensation Base: Uncovering Infringement Profits
One core dispute in the trial was verifying the infringement profits to determine the base for punitive damages. The group company argued the shop had a long infringement period and huge profits, and calculating the base accurately from limited evidence tested the court's judgment.
The court found that the transaction volume of the shop on a single online platform alone reached 681,224.45 yuan in two years. This only accounted for online transactions, while the massage industry relies heavily on offline business.
To make the base closer to the actual infringement profits, the court innovatively adopted multi-dimensional industry data for comprehensive calculation. It referred to the 7.3% online penetration rate of the massage and foot therapy industry in 2023 to extrapolate the shop's total transaction scale, plus two key parameters: the usual 40% profit margin of massage shops and 17.2% influence of brand factors on consumer choices in the industry. After rigorous calculation, the court concluded the shop's infringement profits were no less than 642,030.72 yuan. This figure, supported by a clear formula, served as the base for punitive damages.
2x Punitive Damages: Criteria for Malice and Serious Circumstances
The application and multiplier of punitive damages must comply with statutory requirements, requiring both "intent" and "serious circumstances".
First, the court confirmed the massage shop acted with clear intent. As a peer operator, it should have avoided the highly renowned trademark. Instead, it used the mark without permission and continued infringement after receiving the lawyer's letter in March 2023, showing extreme subjective malice.
Second, the court held the infringement was serious. The act lasted a long time, generated huge profits (base over 640,000 yuan), and expanded via online platforms, causing continuous damage to the right holder's goodwill.
Given the malicious and serious infringement, the court upheld the 2x multiplier claimed by the right holder. The total compensation exceeded the claimed economic loss, so the court fully supported the 1.5 million yuan claim. The court also ruled that a tech company, as an online service provider, fulfilled its duty of care and did not constitute contributory infringement.
Significance of the Case
This case clearly demonstrates the complete logic chain for applying punitive damages in judicial practice: from finding intent and serious circumstances to precise profit calculation and reasonable multiplier determination. The effective first-instance judgment provides a strong judicial reference for protecting China time-honored brands, curbing free-riding and purifying market competition.
