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Chanel Double C Trademark Rights Protection Case Was Defeated

2019/7/5 14:29:00 148

ChanelRights Protection

The way to safeguard the rights of Chanel, which has always struggled with counterfeit goods, is not as smooth as expected in China.

According to the latest announcement of the intellectual property court of China, the infringement lawsuit filed by the French luxury brand Chanel in 2016 against Ye Mengzong, a jewellery shop owner in Guangzhou, was dismissed after the second hearing in April this year. The reason is that Chanel has not enough evidence to prove that the shops run by Ye Mengzong are selling trademark goods when they are involved in the sale of goods. They use the products involved in the sale to be similar to the registered trademarks of Chanel and attract consumers and sell products as trademarks.

According to the court's public information, ye Meng Zong opened a jewelry store in July 2014, mainly selling products of Hongkong jewelry brand Zhou Bai Fu. In June 7, 2016, the former Haizhuqu District Bureau of industry and Commerce inspected the shops operated by Ye Meng Zong after receiving clues from a company, and found that a number of alleged infringing goods contained "double C" Logo jewelry. Chanel agents identified the goods as infringing on the exclusive right to register registered trademarks after being identified at the scene.

On the same day, the Haizhuqu District Bureau of industry and Commerce decided to investigate and deal with it. In September 30, 2016, the Haizhuqu District Bureau of industry and Commerce made the decision on administrative penalty. It believed that Ye Mengzong constituted a trademark infringement and fined 80 thousand yuan and confiscated the relevant commodities. Chanel immediately prosecuted Ye Meng Zong to the Haizhu Court on the grounds of trademark infringement, requesting the court to order Ye Meng Zong to compensate 100 thousand yuan for economic losses.

After the first instance of the Haizhuqu District people's Court of Guangzhou City, Guangdong Province, the case found that ye Meng TSE violated the exclusive right of Chanel registered trademark, and sentenced Ye Mengzong to compensate for Chanel economic loss of 60 thousand yuan. However, Ye Mengzong refused to accept the appeal to the intellectual property court of Guangzhou.

Ye Mengzong believes that he sells Zhou Bai Fu's brand products, and the products sold must be sent to Zhou Bai Fu's label after testing, and the related products do not use the registered trademark of Chanel company, while the Chanel agent's on-site appraisal results do not have credibility. Secondly, the total number of products involved is 8, the price tag is only 6000 yuan, and it has not yet been sold, so that Chanel has not suffered losses.

The court of intellectual property in Guangzhou pointed out that the controversy in the second instance was whether the goods sold by Ye Mengzong's shop were encroachment on Chanel's exclusive right to trademark, that is, whether the shape of the commodity could be identified as a violation of the exclusive right of registered trademark.

Qu Wanju, a judge assistant who participated in the case, introduced that when the shape of a commodity is similar to that of a registered trademark, it is necessary to determine whether the product constitutes a trademark infringement. First of all, it is necessary to determine whether the trademark constitutes a trademark use. Secondly, it is judged whether there is a misleading consumer, a confusion or a situation that the consumer will mistake the goods involved in the case to the trademark owner's goods.

The failure of Chanel has aroused great concern in the industry. Some people in the industry say that the handling of the second instance reflects the innovation of the trial concept. For trademark, commodity packaging, decoration and other commercial signs, intellectual property rights should be combined with the distinction and elasticity of the protection scope, so that even the distance between commercial identities can be maintained enough, so that the public can learn and imitate freely outside the scope of rights.

It is noteworthy that this is not the first time that Chanel has been maintaining rights in Guangzhou.

As one of the luxury brands with the highest premium, Chanel has been very cautious about maintaining its brand image. It also takes a non palliative attitude towards fake markets such as fake goods and purchasing.

As early as 90s of last century, Chanel registered and registered trademark No. 793287th with the approval of the State Trademark Office. It approved the use of commodities as eighteenth categories of wallet, wallet, briefcase, handbag, backpack, travelling bag, travelling bag and suitcase, and the validity period was from November 21, 1995 to November 20, 2005.

In December 15, 2005, with the approval of the State Trademark Office, the renewal of the trademark is valid for the period from November 21, 2005 to November 20, 2015. Subsequently, Chanel was approved by the State Trademark Office to register the Trademark No. 145865th "CHANEL", and approved the use of commodities in Eighteenth categories of wallets, purses, handbags, briefcases and wallet. The period of validity is from April 15, 2011 to April 14, 2021.

Nevertheless, Chanel is still the most popular luxury brand in the fake market. Not only Taobao, but also offline stores have high imitation products, ranging from dozens to hundreds of dollars, less than 10% of the Chanel genuine price. Behind this is the strong demand of consumers for Chanel handbags.

In 2014, Chanel discovered that several stores in Guangzhou Wan Ling Plaza sold their infringing products. After being notarized by notaries of Jianghai notary office in Jiangmen, Guangdong, in 2015, the "man field" shop in Wan Ling Plaza bought a belt with a unit price of 25 yuan as an ordinary customer. At the same time, it bought a handbag with a unit price of 270 yuan at another shop numbered 2A096, and obtained corresponding bills and business cards.

The comparison is made between the notarial seal and the seal. The overall shape of the buckle is the "double C" logo. The "CHANEL" and "double C" logo are used in the outer package, lining, front face, zipper and tag of the handbag. The related behaviors have infringed the exclusive rights of Chanel registered trademarks, which will mislead consumers to purchase behavior, and to a certain extent, damage the brand value of Chanel.

Subsequently, Chanel filed a lawsuit against two shopkeepers and Guangzhou Wanling Real Estate Co., Ltd. and Guangzhou Wanling Property Management Co., Ltd., asking two shopkeepers to stop the infringement immediately and compensate for the economic losses. He also believed that Wanling Plaza condoned merchants to sell infringing products, and they also need to pay joint and several liability.

In November 2016, the people's Court of Yuexiu District, Guangzhou, after hearing, decided that two shopkeepers immediately stopped selling goods that infringed the exclusive rights of the plaintiff's Chanel registered trademark, and each person compensated the Chanel economic loss of 30000 yuan. However, he dismissed the plaintiff's other claims of Chanel, and identified Wan Ling Plaza as having a clear requirement for the seller to sell the legal products in the contract, and has done a reasonable duty of care.

In another case of infringement, the Guangzhou fashion commercial city, also a manager, was not spared. In 2014, Chanel filed a lawsuit against Hu, a shop owner of the kazenny leather shop in the 011 shop of West Third Street, Guangzhou Fashion Plaza, demanding that the shop immediately stop selling counterfeit products and make compensation, and provide convenience for the sale of the infringing goods by the fashion commercial city company.

After the court hearing, the judge considered that Chanel has a high reputation and significance in China. Hu Mou as an operator should have higher duty of care than ordinary consumers. It should be aware that the handbags and handbags involved belong to the products that infringe upon the exclusive rights of other registered trademarks. However, they have not paid enough attention to their obligations and have failed to provide legal and effective evidence to prove that the sale of infringing products has legitimate sources. Their actions have constituted the infringement of the exclusive rights of Chanel registered trademarks. They should bear civil liability for damages in accordance with the law, and stop selling Chanel's 145865th handbags for the exclusive use of registered trademarks.

As the lessor and manager of the shopping mall, the fashionable commercial city company should have the obligation to supervise the merchants who conduct business activities in their premises. However, the opening of a shop without a business license will be indifferent to its regulatory responsibilities and legal responsibilities.

Careful observation is not difficult to find that the above three cases occurred in Guangzhou, but there are three different results, which means that Chanel and other luxury brands will face greater challenges in the Chinese market. In order to better monitor and grasp the Chinese market, Chanel is making more efforts to combat counterfeiting while attracting more powerful Chinese consumers by narrowing the price gap at home and abroad.

For Chanel who believes that only he has a say in true and false, the second-hand luxury transaction platform is also a fertile soil for fakes.

Last March, Chanel filed a lawsuit in New York for What Goes Around Comes Around (referred to as WGACA), the first lawsuit between luxury brands and second-hand retailers. Chanel said WGACA misled consumers to believe that the retailer had a formal partnership with Chanel, and explicitly rejected WGACA's request for official cooperation.

In November last year, Chanel filed a trademark infringement and counterfeiting lawsuit against The RealReal, accusing the resale website although it claimed that the product was 100% authentic, but actually sold counterfeit Chanel handbags. In March of this year, The RealReal asked the federal court of New York to revoke the lawsuit, but Chanel counterattacked in April this year, and again initiated the lawsuit on the same grounds. The RealReal spokeswoman Christine Heerwagen responded that Chanel was just trying to stop consumers from resale their second-hand products or buy them at discounted prices.

However, The RealReal, which officially landed on the Nasdaq Stock Exchange on Friday, is still optimistic about its capital market. Its stock price surged 44.5% to 28.9 dollars on the first day, and its market value was as high as 2 billion 390 million US dollars, far ahead of the previous market's 1 billion 500 million dollar valuation of the platform.

According to public information, The RealReal rose by 55% to 207 million dollars in 2018, and the net loss increased by 40% to 75 million 800 thousand dollars compared with 52 million 300 thousand in 2017. In the first quarter of 2019, its revenue rose 49.6% to 69 million 250 thousand dollars, and net loss was 23 million 220 thousand dollars, a net loss of 14 million 100 thousand dollars in the same period last year. During the reporting period, the active buyers of the platform were 456 thousand, compared with 326 thousand in the same period last year.

To be sure, the classic and limited money of luxury brands such as Chanel has obviously become the object of consumers' investment, not just fashion items. But the existence of fake makes Chanel still have a strong sense of distrust for the channel of e-commerce.

Bruno Pavlovsky, President of Chanel fashion department, once again said in an interview last month that even if competitors such as LVMH and Kai Yun group expand their business scale in China, the brand will not consider selling core products such as garments and handbags online. He stressed that "the best experience of Chanel is in the boutique. We are not sure whether consumers can understand us through the cold electronic screen."

It is noteworthy that earlier, some people have disclosed exclusively to the fashion business express. Chanel beauty will be put into the official flagship store in Tmall this month. It is regarded as a big step in the Chinese online market. At the same time, Chanel continues to expand its physical stores.

According to the latest annual performance data released by Chanel, in 2018, the brand sales rose 10.5% to 11 billion 100 million dollars, or 9 billion 800 million euros, and operating profit increased 8% to 3 billion dollars over the same period. Among them, Chanel sales in Asia Pacific, including China, surged more than 20% to 4 billion 700 million dollars, surpassing Europe as the world's largest brand market for the first time.

Up to now, Chanel has not yet responded to the second instance losing lawsuit. Foreign media commented that this is a major setback for the brand's fight against fraud.

Author: Zhou Huining

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