Beijing IP Court grants maximum amount of statutory damages for the first time

The Beijing IP Court has awarded the maximum amount of statutory damages in a trademark infringement action to high-end outerwear manufacturer Moncler. The Franco-Italian fashion company is the first claimant to obtain the increased maximum amount of Rmb3 million since the new Trademark Law came into force in May 2014.

Moncler had filed suit against Royalcat, a Chinese company, after the latter started producing coats bearing either Moncler’s own MONCLER mark or the similar mark MOCKNER.

The Beijing IP Court awarded the maximum amount of statutory damages based on the following findings:

• the MONCLER mark enjoyed a high reputation in China;
• Royalcat had failed to provide financial statements and documents related to the infringement;
• the price difference between the parties’ products was very small;
• Royalcat had wilfully infringed the MONCLER mark by offering for sale products bearing the MONCLER mark on its website at www.mockner.com and concealing the name of the manufacturer on its products; and
• Royalcat was a large-scale infringer.

Counsel comment:

“The Moncler case is significant in two aspects. It is the first case in which a Chinese court has awarded the maximum statutory damages (Rmb3 million) under the new Trademark Law. This demonstrates that the courts will not hesitate to award substantial damages to a foreign plaintiff in the right circumstances. The case is also helpful in highlighting the factors contributing to the level of damages awarded. For instance, the fact that the defendant refused to provide sales data and deliberately concealed its name on the infringing products led to a finding of wilful infringement that justified a high level of damages.”

Eugene Low, partner at Hogan Lovells