As one of the most important activities of National IP Publicity Week from April 20 to 26 the Supreme People's Court announced the "Top 10 Intellectual Property Cases in Chinese Courts in 2019" on April 21. Among them, the “Balanced Body Inc. against Yongkang Elina Sports Equipment Co., Ltd. dispute of trademark infringement” represented by Lung Tin, was honorably selected as a typical case for its practice under the intellectual property infringement compensation standards.
This case has not only the representative significance in the practice of the law, but also promptly responds to issues that are widely concerned by society. The response reflects the consistency of legal and social effects. The judgment in this case reflects the persistent exploration of the People’ s Court in the review of applicable conditions and determination of the compensation basis in order to strengthen the efforts to the application of punitive damages.
Facts of the case:
As the world's first Pilates company and the largest Pilates equipment and education provider in the world, Balanced Body is the owner of the registered MOTR trademark in China. As early as 2012, a Spanish company (named “PITK”) sold fitness equipment manufactured by Yongkang Elina (a Chinese company owned by the PITK legal representative) in Europe that infringed Balanced Body’s IP rights. Upon receipt of a cease and desist letter issued by Balanced Body®, PITK and Yongkang Elina jointly executed an agreement committing not to infringe any IP rights of Balanced Body.
In 2018, Balanced Body found Yongkang Elina participated in IWF Shanghai 2018 Int’l Health, Wellness and Fitness Expo and offered for selling fitness equipment labeled “MOTR”. Pri-litigation investigation discovered Yongkang Elina was engaged in manufacturing, selling, and offering to sell fitness equipment bearing “MOTR.” In July 2018, Balanced Body® filed a civil action in the People's Court of Pudong New Area, Shanghai for trademark infringement against Yongkang Elina demanding injunctive relief and monetary remedy of CNY 3 million (including reasonable expenses) in view of Yongkang Elina’s acts with willfulness or malice.
In Balanced Body Inc. v. Yongkang Elina Sports Equipment Co., Ltd., (2018) Hu 0115 Civil 1st Instance No.53351, we successfully convinced the judge that Defendant had committed infringement in bad faith and the infringing circumstance was serious, while also provided evidence showing a minimum profit that Defendant had earned as a calculated amount. After two sessions and full deliberation, the judge ruled an infringement and entered a treble damages award as punitive.
In this case, we strategically collected and presented evidences to prove factors for the determination of punitive damages.
Proved factors for the determination of punitive damages:
A. Infringement in bad faith
B. Serious circumstances
C. Calculated damages and compensation
D. Times of punitive damages
Finally, we concluded that sufficient evidences showed that Defendant acted with willfulness or malice, or performed with an indifference toward the IP rights of Plaintiff, and accordingly it would be appropriate to award treble damages in view of the significant economic losses to Plaintiff and the legislative intent to advance the public policy goal of punishing the defendant for acts with willfulness or malice and deterring others from engaging in the similar acts. At the end, the judge agreed with us in this aspect.
