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Christian Louboutin Triumphs in Final Trial of IP Case in China. One-year-and-a-half of Dispute with Yi* Shoe Factory Concludes.
General thrust of case handling
Investigation and evidence collection is an important priority in handling intellectual property infringement cases. Skill in collecting bad-faith infringer’s infringement evidence and capability of leveraging local administrative enforcement forces to fight against infringers so as to form evidence during enforcement actions, can both come to rescue where our attorney lacks sufficient power in procuring evidence on his / her own.
Regarding repeated and persistent infringer, how to collect evidence on duration and scale of the infringing act has become an important factor in whether injured party can be awarded higher amount of compensation in any contemplated legal proceedings.
Regarding coexistence of trademark infringement, patent infringement and unfair competition as simultaneously found in the infringer, attorneys should prioritize the objectives in client’s position on how to enforce the rights within limits of budget and timeframe acceptable to client in a highly efficient manner.
Regarding trademark squatting of a similar mark or taking free ride of Brand Holder’s registered mark by any third party, when moving forward with title disputes or claims such as filing trademark opposition or revocation, attorney needs to focus on investigation into actual business operation, together with the motives of such trademark squatting. Legal practitioner regularly has the opportunity to locate evidence related to bad-faith use by third party, which can function as strong support in trademark opposition and revocation.
I. Case background
The brand Christian Louboutin (acronym “CL”), designed by Christian Louboutin, is a fashion brand with international patronage. With unique design red-outsole, the products have gained tremendous popularity among royal families and superstars everywhere. China market is one among other things to which it paid high regard. Nowadays CL Company has set up specialty boutiques in Beijing, Shanghai, Shenyang and Chengdu.
In October 2015, CL Company noticed in Shanghai marketplace a certain brand had replicated some bestseller of CL Company. The “brand” appeared exceptionally similar to CL logo at first sight. Yet on close scrutiny, there would be distinct differences.
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| Figure 1: CL logo | Figure 2: Copycat logo |
With following query, we found it alleged to be marked with a registered trademark and registered logo as below:
Based on attorney’s analytical judgment, CL held that quite a lot of risks and difficulties would be encountered for application for trademark invalidation. Brand Holder took the attorney’s advices to mount an investigation into the case.
II. Investigation and raid action
Through investigation, it was known that owner of the shoe brand was an individual ZHOU, who incorporated a factory as a legal representative, Huangbu Yi* Shoe Factory (i.e. Yi* Factory) in Huidong County, Huizhou City, Guangdong. He founded two online stores at www.1688.com (the Alibaba in China) for wholesale, in addition to Taobao stores for retail purposes. From the stores, people can see the manufacturer has been retailing and wholesaling look-alike CL shoes in bulk. Logos have been intentionally blurred in a significant portion of the products, which poses constraints for Brand Owner to complain with Alibaba about removal of infringing web pages.
Figure 3：Webpage of some products of infringer’s webstore
Upon completion of notarization, instead of rushing to initiate legal proceedings, CL Company partnered with Intellectual Property Consultant Agency under its entrusted law firm, in respect of investigation on the offline factory, evidence notarization, administrative raid action for evidence collection and preservation.
In November 2015, March 2016, the IP Consultant Company assigned investigators to investigate and collect evidence at its online store and manufacturing site of Yi* Shoe Factory respectively, in a move to grasp dynamic situation relating to the infringer (i.e. manufacturing scale, production capacity, layout of each workshop and warehouse, model and quantity of the manufactured product) in real time.
Upon determining the infringement, attorney-at-law filed complaint with local AIC and the latter proceeded with an administrative raid action against Yi* Shoe Factory in March, 2016, where 632 pairs of shoe products carrying 
and were under seizure.
and were under seizure.
Figure 4: AIC raid
Following the raid, CL Company surprisingly discovered that Yi* Shoe Factory used a mark identical to “” on outsole, meanwhile labeled a transformative “” on shoebox and soles of the shoes, as shown above.
” on outsole, meanwhile labeled a transformative “” on shoebox and soles of the shoes, as shown above.|
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| Figure 5: genuine CL shoes |
Figure 6: the shoes produced by Yi* Factory
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Based on the comparison, when the product designs were substantially the same, it is quite difficult for consumer to distinguish product origin by judging only from different logos on soles of the shoe products. When the marks were cursive English letters, average consumer, particularly Chinese consumers, will find it hard to tell the subtle differences. Such can serve as best evidence to establish “” constitutes trademark infringement against “”.
” constitutes trademark infringement against “”.
On April 15, 2016, Huidong County Market Supervisory Administration held that trademark infringement was established and consequently rendered a Penalty Decision on the infringer on account of its illegality.
After the punishment, attorneys followed up with the case and accessed evidence on website that a large quantity of target products were still available for sale.
III. Course of legal action
With sufficient evidence at hand, in June 2016, CL Company filed a civil action by reason of unfair competition and infringement of trademark exclusive rights, before Huicheng District People’s Court of Huizhou, Guangdong Province.
During Court hearings, Yi* Shoe Factory claimed the use of registered mark under its ownership on products did not constitute trademark infringement.
under its ownership on products did not constitute trademark infringement.Christian Louboutin otherwise argued that de facto use of the trademark is to alter its trademark “
” into “
”. The deformed trademark “LQgm + china” totally differed from its registered trademark “shoes (figure) + QGMR +倾国名人” in the characters and constitution element. The deformed mark “LQgm + china” and CL registered mark “Louboutin + Christian” both used cursives as main body. Similarly, the part of letter “L” which conveyed relatively strong distinctiveness appeared in golden color. It could be reasonably concluded that the mark used by Yi* Shoe factory was deemed similar mark with Brand Owner’s registered mark on the whole. The labeling of Yi* Factory’s registered trademark would make no impact on determining the infringement dispute.
Beyond that, there have been acts of unfair competition, such as plagiarisms of Christian Louboutin’s original, design-patented product designs, misrepresentations of product origin, manufacturer’s information. The infringing activities involve all processes including development, production, packaging, sale and advertising of the infringing goods. Although lawsuit of patent infringement and unfair competition was not brought before the Court, Christian Louboutin submitted evidence in terms of copyright and patent right, in hopes of further establishing the infringer’s malicious intent as demonstrated by acts of unfair competition, apart from trademark infringement. On such basis, the Plaintiff requested the judge award higher amount of compensation.
The People’s Court of Huicheng District, Huizhou City and Huizhou Intermediate People’s Court determine that the mark in use by the Defendant Yi* Shoe Factory has constituted trademark similarity, on grounds of golden cursives and the strongly distinctive letter “L” which will mislead and confuse consumer, and in light of renowned status and reputation of the Christian Louboutin registered mark under dispute. The Courts rule that the Defendant compensate Christian Louboutin economic loss in the amount of RMB 400,000, together with immediate cessation of manufacturing and sale of commodities against exclusive rights of Christian Louboutin trademark. The Courts also endorse evidence adduced by Harvesting with regard to trademark infringement and unfair competition. By taking into consideration the two offences concurrently, the Court therefore award larger sum of compensation. It is of particular significance to trademark infringement cases in days to come. The case has now entered into execute procedure.
It is worth mentioning that in the face of leads on the infringer’s property status actually unavailable, Harvesting urged the Court to enquire and freeze Alipay account belonging to Yi* Shoe Factory during the trial. Analysis on attorney’s part, helped to locate as many as 8 bank accounts in association with Yi* Shoe Factory and its actual operator ZHOU Jinshan, which paved the way for full enforcement of the case. As at the date of this press release, attorney has submitted the whole of property leads to the Court, and further included ZHOU Jinshan and his spouse as joint parties against whom a judgment or order is executed.
IV. Conclusion
From sighting, infringement investigation, evidence notarization, administrative punishment to commencement of legal action, the case now came to a close over the span of one year and a half.
In course of evidence gathering, apart from notary collection of evidence by attorney, the working of the case integrated professional investigation forces for infringement investigation, local administrative bodies for administrative raid, with an aim to immediately cease the mass production of infringing goods on the part of the infringer before litigation, in an in-depth and effective fashion, to reduce client’s damage at maximum speed. During court trial, with co-existing causes of action (trademark infringement, patent infringement, unfair competition), taken the client’s needs and status quo of the case into consideration, we opted for a litigious proposal on and for client’s behalf in most cost-effective manner, ensuring accurate and fast problem resolution. The case is a hallmark success of right enforcement. Meanwhile, such success paves the way for upcoming application for revocation of “” by CL Company.
” by CL Company.
For brand protection of intellectual property, it is supposed to be based upon multi-perspective approach. Combining more forces to enforce brand rights often yields better results.