Sections
INTA Bulletin
Español Português 日本語 中文网站

INTA Bulletin

August 15, 2017 Vol. 72 No. 14 Back to Bulletin Main Page

CHINA: Shanghai IP Court: International Purchase on E-Commerce Platform Constitutes Trademark Infringement


On April 21, 2017, the Shanghai Intellectual Property Court issued the final judgment in a trademark dispute between Quanzhou Peak Sports Products Co., Ltd. (Peak Sports) and Isaac Morris Ltd. and its China-based original equipment manufacturer (OEM) supplier Wuxi Zhenyu International Trade Co., Ltd. (Zhenyu) regarding the PEAKSEASON trademark (Court Docket File Number [2016] H73MZ37).

The Shanghai IP Court determined that Isaac Morris Ltd. and Zhenyu Co. had jointly infringed the trademark rights of Peak Sports by using PEAK SEASON on their clothes. Peak Sports is the owner of the PEAKSEASON trademark (TM No. 676992), registered in China. The court ordered Isaac Morris Ltd. and Zhenyu Co. to cease using the mark immediately, and awarded Peak Sports monetary compensation of RMB 20,000 (US$ 2,900). This final judgment overruled the first instance judgment made by Shanghai Pudong New District Court (Court Docket File Number [2014] PMSZCZ1131).   

On August 20, 2014, Shanghai Customs stopped a batch of 8,424 pieces of men’s knitted T-shirts bearing the PEAK trademark, produced by Zhenyu, for exportation to Isaac Morris Ltd. in the United States. On November 3, 2014, Peak Sports brought the case to Shanghai Pudong New District People’s Court against the two defendants. The first trial court found the usage of the PEAK trademark on the products by Zhenyu to be based on the authorization of Isaac Morris Ltd. The court said that Zhenyu had met their obligation to examine the legal rights clearance, and, more importantly, that all the products were for export and not for sale in the Chinese market, which the court deemed outside the definition of trademark usage stipulated by the Trademark Law of China. Thus, the court rejected Peak Sports’ claim and ordered them to pay RMB 130,000 (US$ 19,400) compensation to Isaac Morris Ltd. for their loss caused by the faulty detention of the T-shirts by Shanghai customs.

During the second trial, Peak Sports supplemented further evidence, including their sponsorships, promotional activities, and news reports by the media. They also provided crucial notarization purchase evidence to prove that the clothes featuring the PEAK trademark in the U.S. market could be purchased by customers in China via the e-commerce platform, Amazon.com. The court considered the fact that Isaac Morris is the business partner of Amazon.com in the United States, and that it was possible for Isaac Morris to sell products made by the OEM from China on Amazon.com. However Isaac Morris argued that the mark they used (PEAK SEASON BYISAACMORRISLTD) was different from Peak Sports’ trademark, as it included the company’s name. 

The court disagreed, and deemed that the actual usage of the mark was mainly focused on the term “Peak,” and that consumers could be confused between the two trademarks. Furthermore, considering the trends in international trade and technology, customers could buy products from different countries via advanced e-commerce platforms. Thus, the court said, the case could not be judged merely according to whether the use of the trademark by the OEM was in accordance with China’s Trademark Law. 

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position. 
 
© 2017 International Trademark Association