Hangzhou Yuhang District People’s Court has made a ruling of a trademark infringement case and held that the Defendant Chow, has infringed Zhejiang Reach Technology Co.’s trademark “MeO” by using it in its online store on taobao.com. The court also awarded 35,000 yuan damages to the plaintiff.

The case is exemplary for it has made affirmation on whether the use of trademark in procurement services is infringement involved and provides guidance to the application of law in similar cases. And it also reminds the procurement service providers of their liability for legality examination.

Plaintiff Zhejiang Reach Technology Co,, previously known as Zhejiang Reach Marketing Co,, has registered the disputed trademark “MeO” (No.11124897) in 2015 under the class 3 “beauty mask, cosmetics, spot removal cream, cosmetic cotton”, and the registration was approved on April 7, 2015. Reach has long used the registered trademark in its production of cosmetic products, beauty and skin care products, which has gained a certain degree of market awareness.

However, the defendant Chow, has run a online store on taobao.com providing procurement services by helping the customers purchase products that were pre-displayed on its online store.

In the complaint, Reach accused Chow of selling cosmetics with the trademark “MeO” without Reach’s authorization in its Taobao store, causing confusion among the plaintiff's customers. And Reach also mentioned that before filing the lawsuit, it has sent Taobao.com, the operator, a cease-and-desist letter, requiring the link of the infringing products to be deleted, but was omitted, consequently Reach listed Taobao.com as another defendant.

Reach requested Chow to be ordered to cease its sale of infringing goods and Taobao.com to be ordered to disconnect and remove the related links. Moreover, Reach asked for compensations for economic losses of 300,000 yuan and reasonable expenses of 30,000 yuan for rights maintaining beard jointly by Chow and Taobao.

Chow, the defendant, argued that its goods were legally sourced from the ultimate trademark owner Beauty River International Co., Ltd. In Taiwan region, and the procurement services that he provides also have not violated the Trademark Law.

After verifying, the court held that the disputed goods in this case were trademark infringing goods.

Firstly, there is no sufficient evidence provided to back up that Beauty River, from whom Chow bought the goods, is the “MeO” trademark owner in Taiwan region, for according to the evidence submitted by Chow, it can only confirm that Reach and Beauty River have the same legal representative, and the manufacturer of the disputed goods Sage, is the Reach’s raw material supplier, but not the conclusion that Beauty River is the trademark holder.

Secondly, even if disputed goods are regarded as legal in its original region doesn’t mean it is legal within China’s border, and Chow as a procurement service provider, who is familiar with the brand “MeO” is liable for legality examination, but he didn't fulfill such obligation.

The court also ruled that the accusation against another defendant Taobao to be withdrawn.

 According to Infringement Liability Section in Civil Code, internet platform operator should bear joint liabilities when having been informed with the detailed notice of infringement and still have not taken any necessary measures, but in this case, the notice was neither valid nor detailed for Reach hadn’t provided its profile and the proof of the clientage with the sender Zhejiang Inpro Law firm in the Cease-and-desist letter. And Taobao had already disclosed the seller’s valid identity information to Reach, the allegedly infringing links also didn’t exist when the case was on trial. Hence the court found Reach’s accusation against Taobao was not sufficient in evidence, and denied its propose.

Abstract:

Hangzhou Yuhang District People’s Court has made a ruling of a trademark infringement case and held that the Defendant Chow, has infringed Zhejiang Reach Technology Co.’s trademark “MeO” by using it in its online store on taobao.com. The court also awarded 35,000 yuan damages to the plaintiff. The case is exemplary for it has made affirmation on whether the use of trademark in procurement services is infringement involved and provides guidance to the application of law in similar cases. And it also reminds the procurement service providers of their liability for legality examination.