Case Background
Our firm represented a European luxury brand (Plaintiff) in a dispute against a Chinese individual business operator (Defendant) manufacturing and selling counterfeit goods. In 2013, the Guangzhou Baiyun District Administration for Industry and Commerce (AIC) branch seized 69 pairs of counterfeit “DR” trademark women’s shoes and over 1,000 semi-finished products from the Defendant. Following administrative penalties, the Plaintiff initiated civil litigation for damages.
Case Challenges
1. Difficulty in Obtaining Meaningful Damages for Small-Scale Infringement
* Total value of infringing goods only CNY 8,000 (calculated at cost price).
* Administrative fine of CNY 15,000 had already been enforced.
2. Uncooperative Defendant
* Defendant refused to participate throughout the AIC investigation and litigation.
* Submitted no business account records.
3. Quantifying Brand Harm
* Damage to luxury brand reputation difficult to quantify monetarily.
Our Service Highlights
1. Creating an Administrative-Judicial Evidence Loop
* Used the AIC Penalty Decision (Sui Gong Shang Yun Fen Chu Zi [2013] XXX) to lock in infringement facts.
* Combined on-site inspection records/seizure lists to form a complete evidence chain.
2. Luxury Goods Premium Damages Model
* **Damages Factors:** Calculation Logic
* **Infringement Scale:** 69 finished pairs + 1,000+ semi-finished items.
* **Subjective Bad Faith:** Continued production and refusal to participate.
* **Enforcement Costs:** Rigorous inclusion of notarization + attorney fees.
* **Brand Value:** Referenced premium pricing system across 20 boutiques in 12 cities.
3. Optimizing Default Judgment Strategy
* Cited Article 63 of the Trademark Law: Manufacturers bear heavier liability than sellers.
* Overcame limitation based on registered capital (CNY 50,000 awarded against an individual operator with nominal capital).
Case Results
1. Punitive Damages Awarded
* Judgment for CNY 50,000 (625% of the infringing goods’ value).
2. Precise Shifting of Procedural Costs
* 68% of litigation costs (CNY 1,050 out of CNY 1,550) borne by the Defendant.
3. Industry Benchmark Principles
* Established the judicial standard of “awarding damages based on luxury goods premium for small-scale infringement”.
* Established the rule of direct admissibility of Administrative Penalty Decisions in civil damages claims.
