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3M v. 3N: 3M Awarded CNY 3.5 Million as Damage in a Trademark Infringement Case
Time: 2016-09-20
3M v. 3N: 3M Awarded CNY 3.5 Million as Damage in a Trademark Infringement Case

Feynman Z. LIANG | Sep 20, 2016



In Jun 2016, the Supreme People’s Court of P. R. China issued a decision, rejecting the petition of retrial filed by petitioner HW Reflector Co. Ltd (“HW”). The Supreme People’s Court’s decision marked the final victory of 3M in its battle against the trademark infringer.

In 2014, 3M discovered that HW’s product bears the trademark “3N”, which it believed that the mark is similar to its registered mark “3M” (no. 884963 and no. 5966501). 3M filed a lawsuit against HW before Hangzhou Intermediate People’s Court, demanding that HW cease the infringement and pay damages of CNY 13 million (USD 1.9 million) and reasonable enforcement cost of CNY 200,000 (USD 30,000). In 2015, the court found that HW’s mark “3N” was confusingly similar to 3M’s mark “3M” and thus HW’s act of selling the product with the mark was infringing the trademark right of 3M. The court ordered that HW stop the infringement and pay the damages of CNY 3.5 million (USD 524,000). HW was not satisfied with the judgment and filed an appeal before Zhejiang Province Higher People’s Court but the court upheld the judgment of the first instance court. HW filed a petition of retrial before Supreme People’s Court of P. R. China, pleading the court to cancel the judgment of the second instance court, retry the case and reduce the damages to CNY 500,000 (USD 75,000) or lower. The Supreme People’s Court of P. R. China issued a decision, rejecting the petition of retrial and other petitions of HW.

The key of the case lies in whether HW’s mark “3N” is similar to 3M’s registered marks “3M”.

According to Judicial Interpretation by the Supreme People's Court of the Issues Relating to Application of Law to the Hearing of Trademark Cases

Article 9 Identical trademark as referred in article 52.1 of Trademark Law of P.R. China, means that when comparing infringing trademark and the registered trademark of the plaintiff, there is no substantial difference between these two marks.

Similar trademark as referred in article 52.1 of Trademark Law of P.R. China , means that when comparing infringing trademark and the registered trademark of the plaintiff, font, pronunciation, connotation of the word mark, composition and color of device mark, overall structure of combination of such are similar, or combination of shape and color of 3D trademark, causing the related public confuse or mistakenly believe there is specific connection between the source of the trademark and the plaintiff's product bearing the registered mark.

Article 10 when the court determines whether the trademark is similar or identical in accordance with Article 52.1 of Trademark Law of P.R. China, following principles shall be followed:

(1) Comparison shall be based on average level of the attention of related public;
(2) Comparison shall be performed on the overall trademark as well as the predominant element of the mark. What’s more, comparison shall be performed in a separate manner;
(3) When considering whether the marks are similar, the distinctiveness and the fame of the trademark of the plaintiff shall be considered.

In this case, first of all, the product of the defendant is identical to the goods designated by the registered trademarks of 3M. HW agreed to the fact that it produced and sold reflecting product for vehicle body. The goods as designated by 3M’s trademarks “3M” with registration no. 884963 and “3M” with registration no. 5966501 are “thin board and belt made of light reflecting material” and “light reflecting plastic film not for packaging”. From the perspectives of the function, use, manufacturing unit, sales channel and target consumer, the product of the defendant is identical to the goods designated by the registered trademarks of 3M.

Secondly, the mark per se used by the defendant is similar to the registered marks of 3M. Comparing the defendant’s mark “3N” and plaintiff’s mark “3M” from the perspectives of composing elements and overall structure, these two marks shares similar overall structure. In terms of average level of the attention of related public, for car reflector product, the overall appearance of the HW’s product and 3M’s product are very similar, being a red and white reflector tape sticking on the body of the vehicle. When purchasing such products, the related public usually pay low level of attention, especially when both of the products carries the China safety certificate mark “CCC” and the “3N” / “3M” on almost the same position of the tape. Thus, it will easily cause confusion among related public as between HW’s reflector product with the mark “3N” and 3M’s product with the registered mark of “3M”. It may cause related public to believe there exits specific connection between HW’s product and 3M’s product. In this case, when considering the similarity between these two trademarks, the distinctiveness, the fame of the trademark of the plaintiff and other elements are taken into consideration. As for distinctiveness, plaintiff’s mark is highly distinctive due to the fact that the mark “3M” is a coined word and it does not carry any meaning itself. In the market of reflector product, “3M” has high level of distinctiveness in distinguishing itself from other competitors. What’s more, as an international corporation, 3M is well known in China in the reflector industry and its products are widely used on the vehicle body, license plate and road sign. With long term marketing campaign, 3M’s mark has accumulated high level of fame in China. In the case, on the other hand, the defendant has provided abundant evidence proving that its mark “3N” has been used in China since 2007 and also accumulated substantial fame in China. HW was established in 2003 and its reflector product was awarded China Compulsory Certificate (abbreviated for “CCC”) in 2006. HW’s newspaper advertisement with the mark “3N” was submitted to the court as evidence proving that the mark “3N” started to accumulated fame since 2007. Evidence also indicates that HW’s sales network extended to 27 provinces in China in 2012. In conclusion, it can be proved that HW’s mark has been used for years and gained substantial fame in China. However, at the beginning when HW’s mark “3N” has never been registered and has no reputation accumulated, HW chose to use a mark similar to another highly distinctive and well known registered mark and such act shall be determined as carrying improper and illegitimate purpose, regardless the fact that the mark later was used for certain period of time and gain substantial fame in China. Therefore, the mark “3N” shall be considered as confusingly similar to the registered mark “3M”.
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