Case Background
Our firm represented the trademark owner (Plaintiff) from China’s Taiwan region in a trademark infringement dispute against a Shanghai agent (Defendant One) and a Jinan franchisee (Defendant Two). The Plaintiff held the “D Tea” series trademarks (Registration No. 55297XX) and granted the Shanghai agent exclusive operating rights in Shanghai. During the contract period, the Shanghai agent unauthorizedly permitted the Jinan franchisee to use the trademark outside the designated region. The Plaintiff lawfully terminated the agency contract, but both defendants continued using the trademark for business gain.
Case Challenges
1. Dispute Over Contract Termination Validity
* The Shanghai agent claimed the termination notice was invalid, arguing they “still had the right to use the trademark during a transition period.”
* They challenged the evidentiary validity of documents from the Taiwan region in mainland judicial proceedings.
2. Splitting Liability Among Infringers
* The Jinan franchisee argued “good faith without knowledge” and sought exemption from liability.
* The Shanghai agent attempted to shift responsibility solely onto the franchise system.
3. Complexity of Damages Calculation
* Profits from cross-regional infringement were difficult to calculate precisely.
* The franchisee’s small-scale operations seemed disproportionate to the trademark’s value.
Our Service Highlights
1. Rigorous Argumentation for Contract Termination Validity
* Cited Article 96 of the Contract Law: Termination takes effect 3 months after notice is received if no lawsuit is filed.
* Secured a notarized mail receipt proving the May 16, 2011 termination date.
2. Piercing Through Liability Defenses
* Exposed the Shanghai agent’s instigation by proving ongoing supply (notarized purchase evidence from March 2012).
* Refuted the Jinan franchisee’s “good faith” defense: business documents showed full and prominent trademark usage.
3. Precision in Damages Modeling
* Employed the “Lost Royalty Method” instead of infringing profit calculation.
* Included enforcement costs (notarization/attorney fees) within the scope of statutory damages.
4. Overcoming Procedural Barriers
* Successfully argued against suspending the infringement case pending trademark review proceedings in court (review procedures do not block infringement determination).
* Established that documents from the Taiwan region hold evidentiary validity upon notarization.
Case Results
1. Comprehensive Injunction Against Infringement
* Final judgment ordered both defendants to immediately cease trademark use.
* Shanghai agent ordered to destroy infringing packaging and raw materials.
2. Scientific Apportionment of Liability
* Shanghai agent held liable for full compensation (CNY 60,000).
* Jinan franchisee exempted from monetary damages but liable for ceasing infringement.
3. Recovery of Enforcement Costs
* Notarization and attorney fees included in the damages award.
* Procedural costs rigidly shifted (Second-instance acceptance fee of CNY 9,050 borne by the losing party).
4. Establishment of Landmark Legal Principles
* Confirmed the “3-month objection period” rule for terminating cross-border trademark license agreements.
* Clarified the standard for delineating liability boundaries between manufacturers (OEMs) and end-sellers.
