Jul 2, 2020 | Hong Kong : The Luxury Brand “Chanel” has encountered setback in a recent infringement action in China

The luxury Brand Chanel Co., Ltd (“Chanel”) has failed a recent trademark infringement action in respect of its “Double C” logo in China.

The story began in a raid action carried out in China in 2016, whereas several items of suspected infringing products were seized from a local jewellery store by the Guangzhou Administration for Industry and Commerce (Guangzhou AIC), which have allegedly incorporated the shape of the “Double C” logo. Thereafter, Guangzhou AIC issued a punishment order against the person being held responsible for the local jewellery store to pay a fine of CNY 80,000.

By relying on the successful Guangzhou AIC action, Chanel commenced a trademark infringement action against the infringer under the AIC punishment order and the Guangzhou Haizhu District People’s Court (“the District Court”) has accepted Chanel’s claims and ordered the infringer to pay a financial compensation of CNY 60,000 to Chanel.

By not agreeing the decision of the District Court, the infringer appealed to the Guangzhou Intellectual Property Court (“the IP Court”) by arguing, inter alia, that the goods being sold in the jewellery store were marked with Chinese brand name, “周百福” (transliterated as “Zhou Bai Fu”) and they have never used any brand names being identical or similar to Chanel’s brand names. The IP Court accepted the infringer’s arguments and ruled that Chanel has failed to provide sufficient evidence to prove that the shape of the suspected infringing products would amount to trademark infringement in the instant case.

While dismissing Chanel’s claims of trademark infringement, the IP Court did point out that copyright infringement and violation of unfair competition law could well be valid arguments to be relied upon by the IP rights owner in prosecuting their infringement actions.

The setback of Chanel in the instance case has demonstrated the very nature that trademark rights are inter-related to other IP rights such as copyright and unfair competition, and shall not be overlooked in enforcement actions.