Case Brief

The plaintiff, Liqui-Moly Gesellschaft Mit Bescherankter Hfatung, is an internationally renowned brand of automotive lubricating oils and additives. The engine oils under the "LIQUI MOLY" and "力魔" brands owned by the plaintiff, starting around 1957-1960, have consistently ranked among the top in the European and global markets for vehicle additives, lubricating oils, and car maintenance. The engine oils, lubricating oils, and other products under the "LIQUI MOLY" and "力魔" brands owned by the plaintiff entered the Chinese market in 2005 and have enjoyed high popularity after years of continuous use and promotion. Meanwhile, the plaintiff, LIQUI MOLY, also has registered a number of trademarks "LIQUI MOLY", "力魔", and " " in Class 1 and Class 4 and other categories of groups for the manufacture and operation of products within its core business scope.

The defendants HE X-qian, LIN X-xiang, and HE X-peng, were immediate family members, i.e., mother and son, as well as mother and daughter, and with a common consensus and deliberate assignment of work, they carried out the acts of infringement and unfair competition such as trademark squatting, distorted use of registered trademarks, and false publicity. The details are as follows:

I. Trademark squatting

On October 9, 2010 and August 7, 2014, LIN X-xiang applied for trademark No. 15112414   and trademark No. 8723418  , respectively; on October 21, 2011 and November 28, 2015, the above two trademarks were approved for registration, respectively; on August 30, 2018, LIN X-xiang licensed the use of the above trademarks to the defendant Zhejiang XX Limo Company (the legal representative and actual controller of the company is LIN X-xiang's son, HE X-peng); and on November 13, 2021 and December 31, 2021, LIN X-xiang further transferred the above two trademarks to her daughter, HE X-qian. Finally, the two squatted trademarks, after the trial by the Beijing High People's Court in January 2024, were invalidated on the absolute grounds of "acquiring registration by any other improper means" under Article 44.1 of the Trademark Law.

II. The defendant group, with the common consensus and the deliberate assignment of work, continually produced and sold the alleged filter products and conducted acts of unfair competition such as false publicity.

HE X-qian, the daughter of LIN X-xiang, incorporated the Limo XX Commercial Firm (a self-employed business) in Yan'an Road, Tianshan District, Urumqi on November 27, 2014, and received investigation by the Market Supervision and Administration Bureau for selling filters that infringed on brands such as TOYOTA in 2017. Later in 2019, HE X-qian, in the name of the foregoing self-employed business, participated in the Tatarstan International Automotive Spare Parts Exhibition in Russia, and displayed and promoted the alleged infringing filter products in the present case at the exhibition. With regard to this matter, the plaintiff, Liqui-Moly Gesellschaft Mit Bescherankter Hfatung, sent a lawyer's letter to HE X-qian, solemnly demanding an immediate cessation of the related acts of infringement. Without any reply, HE X-qian, in the course of the trial of the present case, continued to sell the alleged infringing filter products at her business premise, Limo XX Commercial Firm in Yan'an Road, Tianshan District, and prominently displayed the alleged infringing logos on the storefront. In addition, as early as September 22, 2016, HE X-qian also had applied for a copyright registration certificate for the alleged infringing logo   as a work of art.

HE X-peng, the son of LIN X-xiang, incorporated Zhejiang XX Limo Automobile Parts Co., Ltd. (a sole proprietorship of natural person) on August 24, 2018, of which HE X-peng acted as the legal representative, executive director, manager, and actual controller. The foregoing company was engaged in the production, sales, and export of the alleged infringing filter products, which products were sold in both online (such as 1688 stores) and offline forms and exported to Kazakhstan and other countries and regions. Meanwhile, the company committed acts of false publicity, such as "German brand" and "German quality", to attach itself to the goodwill of LIQUI MOLY, and was the entity directly using the alleged infringing logos in the present case. In January 2022, following a complaint from the plaintiff, Zhejiang XX Limo Automobile Parts Co., Ltd. was administratively penalized by the Jinhua Market Supervision and Administration Bureau for infringing upon the exclusive rights of Liqui-Moly Gesellschaft Mit Bescherankter Hfatung in the authorized trademarks and goods involved in the case. The plaintiff concurrently filed a civil lawsuit with the Jinhua Intermediate People's Court to seek remedy against the defendant group's acts of online and offline infringement and unfair competition.

III. Civil judicial remedy

The first instance court, after the trial, held that the defendant Zhejiang XX Limo Automobile Parts Co., Ltd. constituted an infringement on the plaintiff's exclusive rights in the authorized trademarks involved in the case and constituted the acts of unfair competition, such as false publicity, against the plaintiff's trade name. However, the first instance court further held that the evidence as submitted was insufficient to prove that LIN X-xiang, HE X-qian, and Zhejiang XX Limo Automobile Parts Co., Ltd. committed the alleged acts of infringement and unfair competition by achieving the common consensus and assuming different work assigned to them. Ultimately, the first instance judgment was issued that Zhejiang XX Limo Automobile Parts Co., Ltd. shall bear an infringement compensation liability of 300,000 yuan for the alleged acts of infringement and unfair competition (the ruling on cessation of infringement is omitted).

The plaintiff was not satisfied with the judgment and thus appealed to the Zhejiang Provincial High People's Court. After the trial, the Zhejiang Provincial High People's Court issued a new judgment that LIN X-xiang, HE X-qian, and Zhejiang XX Limo Automobile Parts Co., Ltd. constituted joint infringement and should bear the joint and several liability, and further made a new judgment to increase the compensation amount determined in the original judgment. The Zhejiang Provincial High People's Court fully supported the claim by Liqui-Moly Gesellschaft Mit Bescherankter Hfatung for economic losses and reasonable expenditures of 1,200,000 yuan, and He X-xiang and Lin X-qian should bear the joint and several liability for 1,000,000 yuan thereof for their joint acts of trademark infringement.

Typical Significance

The satisfactory conclusion of the present case not only signifies that the plaintiff has successfully invalidated the trademarks maliciously squatted by the defendants, but also indicates that the plaintiff has achieved a full victory in its efforts to defend its legitimate rights and interests by exhausting all effective remedies at both the administrative and judicial levels.