BVLGARI obtains well-known trademark in Guangzhou

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Recently, Guangdong High People’s Court issued a judgment regarding the trademark infringement and unfair competition lawsuit launched by BULGARI S.P.A. (hereafter “BVLGARI”) against 3 defendants - Hunan TASKIN Investment Co., Ltd., Shenzhen TASKIN Real Estate Co., Ltd. and Shenzhen TASKIN Industrial Co., Ltd. (hereafter “TASKIN”). 

The judgment recognized the Italian luxury brand “BVLGARI/宝格丽” as well-known trademark and granted the cross-class protection the service of “sales of commercial real estate”.

According to the judgment, TASKIN is ordered to pay 3 million RMB in damages to BVLGARI and stop infringement immediately.

Overview of Decision and Ruling.

Founded in Rome in 1884 by the Greek silversmith Sotirio Bulgari, BVLGARI quickly established a reputation for Italian excellence with jewelry creations. Recalling the cupolas of Roman landscapes, the cabochon became a hallmark of the brand’s gems.

From 2013 to 2014, according to the search made by BVLGARI, in its developed real estate located in Changsha, TASKIN prominently used the marks “宝格丽(BVLGARI in Chinese)”, “宝格丽公寓 (BVLGARI apartment in Chinese)”, “Baogene” etc. on the exterior walls, garage, sales office, brochures, etc. 

Furthermore, TASKIN promoted its real estate under the title of 宝格丽/BVLGARI on the website with pictures of high-end jewelry. In addition, hundreds of BVLGARI perfumes were displayed at the public sales event launched by TASKIN, as discovered by BVLGARI.

At the time of publication, we can still see the infringed real estate’s information through several webpages. Source:https://cs.focus.cn/loupan/181237.html

BVLGARI deemed that such behavior infringed their trademark right, and thus sued with Shenzhen Intermediate People's Court against TASKIN by compensation of 20.5 million RMB On October 31, 2014. 

First Instance

Shenzhen Intermediate Court decided TASKIN constituted trademark infringement against BVLGARI’s 4 trademarks in class 36 on “sales of commercial real estate”, company name infringement against BVLGARI Shanghai as well as unfair competition, by ordering TASKIN to pay 1 million RMB as damages. 

The Court deemed according to “on-demand recognition” principle for well-known trademarks, this case does not require the recognition of well-known trademarks.

Highlights of Cross-Protection in Second instance

During the second instance, BVLGARI appealed that BVLGARI/宝格丽 shall be well-known trademark and the amount of compensation in the first instance was significantly lower. TASKIN argued that BVLGARI didn’t obtain the prior trademark rights in class 36 when they used “宝格丽” as the name of real estate, and thus constituted as no infringement.

According to the Judge, the key point in second instance is  whether it is necessary to recognize BVLGARI/宝格丽 as well-known trademarks and apply the cross-protection, as well as how to determine compensation amount.

Bulgari's Shanghai flagship launch Source: Bulgari Sina Weibo

Recognition of well-known trademark

The recognition of well-known trademark shall obey the principle of “necessity”, only if the other provisions of Trademark Law cannot provide the legitimate protection for right holder, the judge is allowed and requested to grant a well-known mark protection. 

Firstly, BVLGARI obtained the prior trademark rights in class 36 covering sales of commercial real estate since 2015, which cannot limit the prior infringement behavior generated before 2015. In the case, the infringement apparently occurred before 2015, at least in 2013-2014, therefore, BVLGARI could only apply the cross-class protection of well-known trademarks on dissimilar goods and services.

Secondly, through long-term use and widely promotion, BVLGARI/宝格丽 has achieved the well-known trademark status at the time of infringement. TASKIN used BVLGARI/宝格丽 as real estate for sales, which were easily mislead by the related public by special connection with  BVLGARI and improperly made use of the well reputation of BVLGARI. 

Therefore, it is necessary to recognize the well-known trademark of BVLGARI/宝格丽 and enforce the cross-protection to crack down the trademark infringement of TASKIN.

Compensation determination

According to the law, the amount of compensation could be determined through below steps. 

• In the case, BVLGARI claimed that hundreds of units had been sold with a profit of 1 billion RMB. Step 1 to 4 is applicable in sequence, which means each step is applicable only if previous step(s) are inapplicable.
• For seriously malicious infringement, the amount of compensation may be between 1 time to 5 times to the amount of step 1 or 2 or 3.

Nevertheless, it is failed to prove the direct relationship between the sales income and trademark infringement. Therefore, after comprehensively considering the goodwill of BVLGARI/宝格丽, subjective bad faith of infringer, the reasonable cost of defending the rights by a right holder, the  profit contribution rate of well-known trademarks in the infringed real estate, the connection level of cross, and other factors, the Court determined the statutory maximum amount of 3 million as the compensation for the case. 

According to previous trademark law, the amount of compensation for infringing trademark right is 3 million, but now it has been raised up to 5 million.

Ariel Huang
HFG Law&Intellectual Property