Exxon Mobil Was Awarded CNY 4.5 million as Damages in Trademark Infringement Case due to the Recognition of Well-known Trademark

Feynman Z. LIANG | Dec 22, 2016


In November, Beijing IP Court issued a judgment in favor of Exxon Mobil Corp. (“Exxon Mobil”), determining that Beijing Beinongguoxin Kejifazhan Co., Ltd. (“Beinongguoxin”) etc. as defendants had infringed the exclusive trademark right of Exxon Mobil and ordered the defendant to pay damages of CNY 4.5 million (USD 652,000) and reasonable litigation cost of CNY 35,000 (USD 5,700).

Exxon Mobil is the owner of trademark in class 1 (No. 357297 “美孚”, No. 147013 “美孚+Meifoo”, 147013 ”mobil” , No. 174462 ”mobil”), class 4 (No. 174431 “mobil” and No. 174458 “美孚”) and class 5 (No. 174470 “mobil”). Exxon Mobil's trademarks in class 1 and class 5 designates fertilizer chemical and pesticide while its trademarks in class 4 designates lubricating oil product.

It was alleged that Beinongguoxin as defendant has been using the mark “美孚+meifu” on its pesticide product since 2004. Alleged infringement includes selling / promoting of infringing product and marketing of the infringing product online through a few different websites.

Beinongguoxin’s allegedly infringing product / promoting material includes the marks “美孚” (e.g. “美孚10号”) and “Mobil” which were determined by Beijing IP Court as identical / similar to the registered trademark of Exxon Mobil in class 1 (No. 357297 “美孚”, No. 147013 “美孚+Meifoo”, 147013 ”mobil” , No. 174462 ”mobil”) and class 5 (No. 174470 “mobil”). Thus Beinongguoxin was determined as infringing the exclusive trademark right of Exxon Mobil.

However, the story didn't just end here.

According to Trademark Law of P. R. China,
Article 64. Where the right owner of the exclusive right to use a registered trademark claims for damages and the infringer challenged raises a counterplea that the right owner has never used the trademark in question, a People’s Court may order the right owner to submit proof of using the trademark over the past three years. Where the rights owner cannot provide the aforesaid proof or proof of losses due to the infringement, the infringer suspected shall bear no liability for any claimed losses.

Trademark owner has the right to exclude any unauthorized third party from using the mark. However, according to the provision above, if the trademark owner wishes to claim damages from the infringer for the trademark infringement, he will have to provide evidence of trademark use over the past three years. In this case, Exxon Mobil only had evidence of use in class 4 (lubricating oil) but failed to provide the evidence of use in class 1 and class 5 (fertilizer and pesticide product). Therefore, theoretically speaking, there is no base of damages for the case.

In this case, Exxon Mobil further provided evidence proving that its trademarks in class 4 (No. 174431 “mobil” and No. 174458 “美孚”) had become well-known trademarks and therefore the alleged infringement had led to dilution of the well-known trademarks. Exxon Mobil proved that its trademarks in class 4 (No. 174431 “mobil” and No. 174458 “美孚”) has become extremely well known through years of nationwide marketing campaign and its top quality products. Exxon Mobil submitted an advertisement research report issued by CTR Market Research Co. Ltd., indicating that lubricating oil product of Exxon Mobil with brand name “Mobil” and “美孚” had been marketing in 200 cities in China from Jan 1, 2000 to Dec 31, 2011 for 219,334 times with total duration of 4,459,644 seconds. The plaintiff also provided a search result performed in China National Library. With key words such as "美孚","埃克森美孚","Mobil" and "ExxonMobil”, there were 11,604 articles found from the year 1998 to 2009. The above evidence shown that the marks in class 4 (No. 174431 “mobil” and No. 174458 “美孚”) had been widely used / advertised and had become highly reputable. What’s more, Exxon Mobil also provide evidence showing that Exxon Mobil has been listed as one of the leading petroleum and petrochemical companies in the world by the Chinese Fortune 500 official website.

According to Trademark Law of P.R. China
Article 13
… Where a mark is a reproduction, imitation, or translation of a third-party’s famous trademark which has been registered in China and where the goods are not identical or dissimilar, which may mislead the public and cause injury to the interests of the registrant of the famous trademark, no registration shall be granted and the use of the mark shall be prohibited.

The plaintiff’s product is lubricating oil while the defendant’s allegedly infringing product is pesticide. Both are of chemical product and share certain common characteristics. The use of infringing trademark had caused cross-class confusing, leading the consumers into believing that the products of defendants were provided by the plaintiff or related party. In addition, such trademark use diluted the unique connection between the trademark and the plaintiff, causing damages to the value of plaintiff’s trademark.

The defendant indicates in its promotional material that it is one of the top 100 Chinese pesticide manufacturer from 2009 to 2010. Based on the statistics released in the China Pesticide Information Net, the no. 100th biggest pesticide manufacturer in China has an annual turnover above CNY 170 million (USD 24.6 million), which is much higher than the claimed damage of CNY 4.5 million (USD 652,000) by the plaintiff in the original complaint. In view of this, the Court completely granted the claimed damages in this case and ordered the defendants to pay damages of CNY 4.5 million (USD 652,000).

In this case, although Exxon Mobil failed to provide use trademark use in pesticide product in order to claim damages, it succeeded in proving that its marks in lubricating oil product had become well-know trademark and the defendant's act has caused trademark dilution, eventually leading to the damages of the value of plaintiff's trademark.