SPC Discouraging Profiting through Enforcements in IP Litigations

This year the Supreme Peoples Court issued a model retrial case of trademark infringement dispute initiated by Nature Republic Co Ltd.

Nature Republic Co Ltd has launched 3-4 thousand trademark infringement cases against those brick-and-motars for selling suspected aloe vera gel products in the past 3 years. The brick-and-motar was totally ignorant of the infringing situation of aloe vera products and quite cooperative to provide the supply source and transaction chain. SPC considered that when defendants has provided evidence showing that its transaction chain was complete, the transaction channel was legal, and the transaction methods were in line with general business practices legally obtained the accused products and fulfilled duty of care in line with its business scale and professional level. Therefore, it was presumed that defendants was totally ignorant of the infringing situation of aloe vera products, which constituted legal source defense.

Meanwhile, SPC further clarified that as the owners of intellectual property, they have the right to protect their interests. However, if enforcement of intellectual property is used as a means for profits, it not only goes against the purpose of intellectual property protection, but also hinders the stability of market transaction order. Moreover, to some extent, it wastes judicial resources, which shall not be encouraged or advocated. In the model case SPC rebutted the right owner all claims of infringement compenstation and reasonable fees in launching the suit.