German Company Awarded 50 Million as for Brand Protection & Intellectual Property Protection in China Helps to Optimize Business Environment

December 16, 2021

Recently, an intellectual property case involving a huge compensation of 50 million yuan caused quite a stir. Raumplus, the plaintiff of the case, is a customized furniture brand founded in Bremen, Germany, focusing on high-end cabinets and sliding doors. With more than 100 design awards, the world-renowned company entered China in 2009. The defendant of the case had a cooperative relationship with Raumplus many years ago. The defendant still claimed to be Raumplus itself, and used the brand name to register companies in Shanghai and Nantong, though the cooperation had terminated. The number of stores opened across the country once exceeded those owned by Raumplus. Besides, repeated request for ceasing infringement works less well. In order to protect the legal rights of its original brand, Raumplus took the defendant to Suzhou Intermediate People’s Court before one-year more preparation and finally received the judgment after nearly 2 years’ trial. According to the judgment, the defendant shall immediately stop its infringement and compensate 50 million yuan. It is uncommon that the court is in favor of huge compensation claims in brand rights protection cases of foreign companies in the past few decades. The author believes that this closely owes to the intense protection of intellectual property by the Chinese government in recent years. For example, upon the revision of the Trademark Law and the Anti-Unfair Competition Law in 2019 which were claimed by Raumplus in this case, the maximum limit of statutory compensation was uniformly adjusted to 5 million yuan. At the same time, “one to five times punitive damages” can also be applied to malicious infringements with serious circumstance. Another important reason why Raumplus’s claim of 50 million yuan in compensation was supported was due to the “evidence production order” and the “impediment to proof system” stipulated in the Article 63.2 of the Chinese Trademark Law. Kai Baumgarten, CTO of Raumplus China, said “I am very pleased to see that we have won this lawsuit, and I believe that the protection of intellectual property rights will be paid more and more attention in China”. “From a corporate perspective, we can clearly feel that the business environment is constantly improving and the protection of the intellectual property rights is getting better and better. We have full confidence in the Chinese market. I think this victory will further accelerate the company’s investment and pace of expansion in China.” said Wang Weidong, President of Raumplus China.

Such kind of rights protection case is not individual among German companies investing in China. It is also recalled that the author has represented a German company’s ROTO FRANK case in 2007. A Wenzhou company preemptively registered its trademark, falsely promoted that it was from Germany, and used the ROTO brand as its trade name without authorization. Its infringing activities were highly similar to those conducted by the defendant in the Raumplus case. Likewise, the Wenzhou company was sentenced to stop its infringement, and its preemptive trademark was eventually returned to the original owner. However, the amount of compensation in the Raumplus case has been 100 times that of the ROTO FRANK case 15 years ago.

Fortunately, not merely in the civil field, the Chinese intellectual property protection has also made great progress in the criminal field. According to the information showed in the 21st “World Intellectual Property Day” on April 26, 2021, the Chinese Procuratorate announced that all levels of the procuratorates across the country have handled 12,000 crimes of infringement of intellectual property rights in 2020, an increase of nearly 64 times compared with 1999. To crack down on trademark infringement crimes, the Chinese Procuratorate pays attention to the equal protection of various rights holders in accordance with the law and equally treats well-known trademarks both locally and globally. The signal released by the Raumplus case indicates that the Raumplus case is only the beginning. It can be seen from the protection of this case that the international influence of China’s judicial protection of intellectual property rights is further expanding.

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