China’s Beijing Intellectual Property Court on April 6 upheld a lower court ruling in favor of Wilo China Ltd. (威乐（中国）中国水泵系统有限公司), German pump maker Wilo SE’s Chinese unit, in a trademark lawsuit lodged by it against Weile Pump (Jiangsu) Co., Ltd. (威乐泵业（江苏）有限公司) and Beijing Yangguang Keyu Solar Energy Technology Co., Ltd. (北京阳光科宇新能源科技有限公司), ordering the defendants to pay 5 million yuan ($740,000) in damages.

Dortmund city-headquartered Wilo SE, founded in 1872, is a German manufacturer of pumps and pump systems for the building technology, water, and industrial sectors. The company produces about 10 million pumps annually in its 15 production facilities across Europe, Asia, and America. It registered net sales of 1,651.9 million euros in 2021. Wilo SE expanded its business into China in 1995 and established its Chinese unit Wilo China Ltd. in 2000, with its total revenue reaching 1 billion yuan ($150 million) in China in 2016. It at present has a total of 14 subsidiary units and two production facilities in China. Wilo SE registered the “Wilo” trademarks for goods and services in Classes 6, 7, 9, 11, and 19 in 1994 and the “威乐 (Wilo’s Chinese transliteration)” trademark for goods and services in Class 7 including mainly machines and machine tools, motors and engines in 2000.

Nantong city, Jiangsu province-based pump maker Weile (in Chinese: 威乐) was incorporated in 2014. In text, this company name was exactly the same as the “威乐” trademark owned by Wilo. Beijing-based Keyu, incorporated in 2008, was a specialized distributor of solar water heaters and air source heat pumps.

Wilo sued Weile and Keyu in the Xicheng District People’s Court of Beijing municipality in 2019 for manufacturing and distributing pumps utilizing the “威乐” trademark without its authorization, seeking 520 million ($770,000) yuan in damages and costs. In the complaint, Weile’s official website was shown to be Wilopump.cn, which explicitly ripped off the “Wilo” trademark to cause consumer confusion to its advantage. The complaint said that Weile claimed its monthly output to be 50,000 and annual sales and export sales to be both over 100 million yuan ($15 million) in its credentials available in its online shops on various e-commerce platforms. Wilo also provided an audit report demonstrating that Weile’s average annual profit rate was 10.65% in its five years in business, presuming the average annual profit rate of China’s pump industry to be 10%. Wilo said it based its damages claims on these statistics.

The court ruled for Wilo, ordering Weile to pay 600,000 yuan ($89,000) in damages and costs. The court acquitted Keyu, agreeing with its legitimate channel defense that it was a mere physical distributor of the infringing pump products, ignorant of manufacturer Weile’s infringement. Both Wilo and Weile appealed the case. The Beijing Intellectual Property Court upheld the lower court judgment on trademark infringement and vacated its judgment on the damages and distributor Keyu. The appellate court enjoined Weile to pay 5.3 million ($780,000) yuan in damages and Keyu to pay 180,000 yuan ($27,000) in damages and costs.

Article 52 of the Civil Procedure Law of the People’s Republic of China provides that collective litigation can be divided into two categories—essential collective litigation (必要共同诉讼) and ordinary collective litigation (普通共同诉讼). Two or more claims can be adjudicated collectively in essential collective litigation if their subject matters are the same, while they can in ordinary collective litigation if their subject matters are not the same, but merely in the same category. The appellate court argued that the trial court erred in excluding Weile’s advertising and selling of the infringing pumps on its online shops from the scope of its adjudication. The appellate court affirmed all Wilo’s claims should be adjudicated collectively on the basis of the same subject matter—the “Wilo” trademark.

The case docket no. is （2021）京73民终1191号, whose English transliteration is 1191, second instance (终), civil case (民), (2021) Beijing Intellectual Property Court (（2021）京73).

中文新闻线索：

https://mp.weixin.qq.com/s/sKF03R-ZfvlAjBcflD6ejA

https://wilo.com/en/About-Wilo/Facts-Figures/Key-figures/

https://www.lawyers.org.cn/info/4dbce3a80b71402e9123a66b4d19d213