China’s Shanghai Intellectual Property Court has lately upheld a lower court ruling in favor of German carmaker Daimler AG (戴姆勒股份公司), renamed as the Mercedes-Benz Group in 2022, in a trademark lawsuit lodged by it against Shanghai Tonghe Auto Parts Co., Ltd. (上海同和汽配有限公司) and Shanghai Tonzie Auto Parts Co., Ltd. (上海同致汽车配件有限公司), ordering the defendants to pay 800,000 yuan ($120,000) in damages and costs.

Founded in 1926, Stuttgart, Baden-Württemberg-based Daimler AG is one of the world’s largest car manufacturers, owning some famous brands including Daimler, Mercedes-Benz, Smart, Aston Martin, and more. The company in China registered the “MERCEDES-BENZ” trademarks No. 76582 and No. 526122 for goods and services in Classes 12 including mainly vehicles and apparatus for the transport of people or goods by land, air or water in 1978 and 1989 respectively, the three-pointed figurative trademark No. 526123 in Class 12 in 1989, the three-pointed figurative trademark No. G1089299 for goods and services in less than 50 classifications other than Class 12 in 2011, and the “奔驰 (Benz’s Chinese transliteration)” trademark No. 669658 for goods and services in Class 12 in 1992. All the said trademarks are valid through continued renewals of their registrations.

Daimler sued Shanghai Tonghe and Shanghai Tonzie in the Yangpu District People’s Court of Shanghai municipality in 2019 for manufacturing and distributing auto parts utilizing the “MERCEDES-BENZ” trademarks without its authorization, seeking 1.2 million ($180,000) yuan in damages and costs. The court found the “Mercedes-Benz” trademarks, the three-pointed figurative trademarks, and the “奔驰” trademark borne by the auto parts sold by Shanghai Tonghe were identical or highly similar to the trademarks owned by Daimler. The court in 2020 ruled for Daimler, ordering Shanghai Tonghe to pay 800,000 yuan ($120,000) in damages and costs and acquitting Shanghai Tongzie for lack of evidence. The court even lifted Daimler’s burden of proof by not requiring it to demonstrate any evidence of its losses incurred by and Shanghai Tonghe’s gains from infringement when assessing its injury and the level of Shanghai Tonghe’s willfulness for the purpose of determining the amount of the damages.

Shanghai Tonghe in 2021 appealed the case to the Shanghai Intellectual Property Court claiming the damages awarded to Daimler were unreasonably high and should be adjusted on the basis of the actual value of the infringing products seized by the market regulator in Shanghai as well as with reference to the administrative fine imposed on it by the regulator. The appellate court dismissed its arguments affirming that trademark owners were entitled to seek both administrative remedies and judicial relief for infringement under trademark law. The appellate court also noted that in this specific case, the amount of the administrative fine was contingent on the infringing products intentionally purchased by the trademark owner to be notarized as evidence, and was not supposed to further factor in the determination of that of the damages awarded in judicial proceedings, since the two avenues are inherently independent of each other. The appellate court upheld the lower court ruling in 2022.

The case docket no. is （2021）沪73民终127号, whose English transliteration is 127, second instance (终), civil case (民), (2021) Shanghai Intellectual Property Court (（2021）沪73).

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