In recent years, with the increasing popularity of entrepreneurship, various brand franchise stores have sprung up like mushrooms after rain. However, individual merchants who authorize the brand to franchise stores do not actually have the right to use the brand trademark.
Recently, the Guangzhou Intellectual Property Court heard a case of infringement of trademark rights and unfair competition disputes involving merchants using the "Swisse" trademark to engage in investment and franchise activities across the country. The merchant was awarded a punitive compensation of 10 million yuan by the court.
Jianhe Company and Shiweishi Company are licensees of the "Swisse" trademark, responsible for the commercial promotion and sales of the "Swisse" brand in mainland China. Shiweishi Company once collaborated with Shanghai Xuyin Company, agreeing that Shanghai Xuyin Company would use the "Swisse" brand product to prepare and promote healthy tea drinks, but the cooperation was later terminated. After terminating their partnership with Shiweishi Company, Shanghai Xuyin Company and Jianao Company continue to use "Swisse" to operate, attract franchisees, promote, and "authorize" franchisees to use the "Swisse" trademark on tea beverage stores. Jianhe Company and Shiweishi Company believe that Shanghai Xuyin Company and Jianao Company have infringed on their exclusive right to use the "Swisse" trademark and engaged in unfair competition. Therefore, they sued the Guangzhou Intellectual Property Court, requesting the court to judge Shanghai Xuyin Company and Jianao Company to stop the infringement and compensate for economic losses and reasonable rights protection costs of 10 million yuan. They also advocate for a punitive compensation of 5 times based on the infringement profits of the two defendants.
In response, the defendant Jian'ao Company argued that its legitimate use of the sued infringing logo did not constitute trademark infringement or unfair competition, and the compensation was unfounded. The infringing store in question could not see its relationship. The defendant Shanghai Xuyin Company did not respond to this.
The Guangzhou Intellectual Property Court held that the plaintiff's trademark in question was highly well-known. After the plaintiff terminated the contract and sent a lawyer's letter to the defendant, the defendant still engaged in large-scale infringement, and the two defendants divided their work and cooperated to jointly carry out trademark infringement and unfair competition, with obvious reasons for infringement; The defendant utilized the popularity of the plaintiff's trademark to engage in large-scale investment and franchise activities across the country, resulting in huge profits and causing serious damage to the plaintiff's reputation. The infringement was serious.
In this case, the plaintiff claimed that punitive damages should be applied, and used the defendant's infringement profits as the calculation basis for the application of punitive damages. Three calculation methods and basis were listed: "176 franchised 'Swisse' beverage stores were authorized 'by the two defendants, 33 disputes involving the franchise license contract of' Swisse 'tea beverage stores, on-site notarization and evidence collection, and 23' Swisse 'franchised beverage stores were seized by the market supervision bureau. The court analyzed the three calculation methods claimed by the plaintiff one by one, and finally used the calculation basis of "on-site notarization and evidence collection and 23 'Swisse' franchise beverage stores seized by the market supervision bureau". The defendant's infringement profit was calculated to be 2.875 million yuan, and based on this, a punitive compensation of 2.5 times was applied. In addition to the plaintiff's reasonable rights protection costs, the plaintiff's request for compensation did not exceed the corresponding amount. The final judgment fully supports the plaintiff's request
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