Reputation as a factor to evaluate the similarity of trademarks and the likelihood of confusion in Michelin case (SPC case)
(Author: Ms. DU Binbin; Source: WAN HUI DA)
COMPAGNIE GENERALE DES ETABLISSEMENTS MICHELIN (Michelin) is a world-famous tire manufacturer and a Fortune 500 company. Its main trademarks “MICHELIN”, “”, ””(MICHELIN in Chinese) have been recognized as well-known trademarks on many occasions by China’s judicial and administrative organs.
In 2010, Michelin found that an entity called Sen Tai Da Group Co., Ltd. (Sentaida) was using the trademarks “”, “”, “” and “” (Sen Qi Lin in Chinese), and the domain name “cenchelyn.com”, and had registered a company with the trade name of “”, i.e. Qingdao Sen Qi Lin Tire Co., Ltd. (Senqilin).
Michelin also found that the local dealer of Sentaida in Chongqing, LI Daowei, was using the “” trademark together with “Landsail tire” when he sold Landsail tires online manufactured by Sentaida.
It is worth mentioning that Sentaida used to be Michelin’s distributor from 2006 to 2009.
Moreover, Michelin found online that some customers were confused between Senqilin and Michelin.
After preserving all the above evidences, Michelin filed lawsuits in March 2011 against Sentaida, Senqilin and Li Daowei with the Chongqing Fifth People’s Court, claiming trademark infringement and unfair competition.
In the judgments of the first and second instances, the Chongqing Fifth People’s Court and the Chongqing High People’s Court both recognized that LI Daowei’s act of using the “” trademark constituted trademark infringement and ordered the payment of RMB 50,000 as damages.
The Courts also found that “” was similar to “” and ordered the defendants Sentaida and Senqilin to pay RMB 10,000 as damages.
However, the trademark “” was not found similar to and not infringing the “MICHELIN” trademark.
Not entirely satisfied by such decision, Michelin applied for retrial to the Supreme Court and submitted evidence of the continuation of the infringement and the infringers’ past relation with Michelin.
In March 2016, the Supreme Court repealed the judgments of the first and the second instances, and raised the amount of damages to be paid by the defendant companies to RMB 450,000. Additionally the Court affirmed the mark, “” to be similar to “MICHELIN”.
WAN HUI DA represented Michelin in the lawsuits.
The Supreme People’s Court made a rather bold decision, in raising the compensation from RMB 60,000 to RMB 500,000, which is the highest discretional compensation regulated in 2001 Trademark Law. It took into account the duration and outcome of the infringing acts, the reputation of the infringed trademarks, etc.
The Supreme People’s Court also provided wider protection on Michelin’s trademarks by recognizing “” similar to “MICHELIN”.