Not smooth as polish: the Kiwi Case

Kiwi is an Australian brand for shoe polish cream and other related products. Launched in Australia in 1906, Kiwi is currently sold by S.C. Johnson in almost 180 countries and is probably the most famous brand of shoe polish. The notoriety of the brand arrived in China, where the Australian company faced a case of trademark infringement in detriment of his brand.

On October 28, 2021, the Shanghai Pudong New Area People’s Court issued a decision which imposed the liability of 4 Chinese individuals for trademark counterfeiting of KIWI shoe polish. Let’s start from the beginning.

In June 2020, the four defendants were found producing and selling without any authorization shoe polish with the words and graphic trademark “KIWI”. At a later stage, in March 2021, the Chinese Customs sized and detained 250,000 counterfeited products for a total sales amount of 230,000 RMB.

Subsequently, the Shanghai police raided the counterfeiting locations of the defendants and seized a large amount of equipment for manufacture together with a big number of finished shoe polish products that counterfeit the “KIWI” graphic registered trademark, with a value of about 120,000 RMB.

This said, talking about the legal ground behind the case, the defendants used the words and graphics such as “KIWI”, which had already been registered with the Trademark Office of China National Intellectual Property Administration in class 3 for goods such as shoe polish, etc. by American household product company S. C. Johnson & Son, Inc.

The above-mentioned conducts are clearly forbidden by article 57 of the Trademark Law, which established that any of the following acts shall be deemed infringement of the exclusive right to use a registered trademark:

1. Using a trademark that is identical with a registered trademark on the same goods without the licensing of the registrant of the registered trademark.

2. Using a trademark that is similar to a registered trademark on the same goods, or using a trademark that is identical with or similar to the registered trademark on similar goods without the licensing of the registrant of the registered trademark, which is likely to cause confusion.

3. Sales of any goods that have infringed the exclusive right to use any registered trademark.

4. Counterfeits, or makes without authorization, representations of a registered trademark of another person, or offers for sale such representations;

As consequence, the Shanghai Pudong Court held that the usage of the mark made by Ding and the other defendants constituted a sever trademark infringement and therefore a crime of counterfeiting.

According to the Court’s words, this kind of malicious “famous brand” infringement not only infringed on the legitimate rights and interests of trademark owner but also damaged the image of the country and caused serious damage to the normal market.

The Court sentenced the 4 defendants to terms ranging from 19 months to 3 years in prison respectively and fines in varied amounts for the charge of trademark counterfeiting.

Reading through the decisions we can learn how important the element of bad faith is becoming for the Chinese Courts as a consequence of the last amendment of the Trademark Law, which became effective on November 1, 2019.

This direction is both good and bad news for those doing business with China. The good news is that the China Trademark Law is effective when it comes to limit “bad faith” trademark filings, and statutory compensation for trademark infringement has been increased. The bad news is for the squatters, seeking opportunities to make money from the registered foreign trademarks. They may be subject to sever penalties, as the present case shows us.