Fu Yichang | Nov 20 2020

Basic facts

Procter & Gamble (P&G), founded in 1837, has become one of the world’s largest consumer goods giants after more than 100 years of development. "TIDE" and "ARIEL" are the famous brands of its washing products and are the largest laundry detergent brands in the world. After long-term use and extensive publicity, the TIDE and ARIEL brands laundry detergents have become well-known products in this field and achieved a high market share.

Since 2017, Company X and its boss Mr. Zhu et al. (hereinafter referred to as “defendants”), have purchased counterfeit TIDE and ARIEL brands laundry detergents from outsiders and sold them to supermarkets and wholesale shops at low prices around the Pearl River Delta for profiteering. The defendants were indicted by the People's Procuratorate therefore and the Court adjudicated that the defendants were guilty of the crime of counterfeiting registered trademarks and selling commodities with counterfeit registered trademarks.

Besides the criminal liability, the defendants shall bear the civil liability according to the Law. Easwayer Law (the sister law firm of Jiaquan) represented P&G to file a civil tort suit to claim compensation for economic losses.

The Court decided that the defendants shall compensate P&G for economic losses and reasonable expenses totaling CNY 521,600 (around USD 79,500).

Typical significance

When the civil suit was filed, as the legal representative of Company X, Zhu immediately canceled the registration of the company, trying to evade liability for civil infringement. That means the legal subject does not exist. Given the different principles of attribution in criminal and civil cases, Zhu, the actual beneficiary of trademark infringement, shall not be liable for civil infringement. P&G would be unable to obtain compensation for its economic losses.

How to make the person who made profits from the actual infringement bear the compensation liability becomes the core of this case. From the perspective of “joint tort”, the lawyers in charge of this case Mr. Yichang Fu and Ms. Haiyan Liang argued that Company X and Zhu were jointly infringing and shall bear joint liability. In fact, Zhu knowingly sold counterfeit goods for profit through Company X. Also, as the actual seller, Zhu independently committed the infringing acts of selling counterfeit goods, which belongs to his personal behavior rather than the company's behavior. Thus, it could be seen that both Company X and Zhu were tortfeasors, which constituted joint tort and shall be jointly and severally liable.

Finally, the Court adopted and supported the claim of the plaintiff in September 2020. Even if the registration of Company X was canceled, the actual beneficiary of trademark infringement Zhu has to bear the joint liability. Zhu's intention to escape legal sanctions by canceling the company was completely defeated.