Supreme vs Supreme Italfigo: 8,5 millions damage awarded

Chapter 4 Corp., the owner of Supreme brand, recently won a civil judgement for trademark infringement and unfair competition with a remarkable RMB8.5 million damage compensation award.

The defendant is “Supreme Italfigo” which shall not be confused with the notorious “Supreme Italia” that belong to another company. The decision is very interesting even if to the eyes of non-IP experts it seems obvious that “SUPREME Italfigo” is an IP infringement of “SUPREME”.

Indeed a lot of useful information is revealed in such judgement. Especially, we wish to mention that the judgement was based on both trademark infringement and Art. 6.1 anti-unfair competition law. 

This implies that the “Supreme” trademark has been protected not only as a registered trademark (as it is after its registration on class 25 in China in Dec 2019), but also a business identifier with certain influence certified by a Chinese court. 

This point really caught our attention: how's possible that a brand  not officially entered China (not until recently), became a business identifier with Art. 6.1 under anti-unfair competition law? 

Evidence of fame is always the nightmare for all the IP owners (and also for their attorneys). To satisfy the criteria of “certain influence” it is required a large volume of evidence, not to mention that Supreme haven’t officially entered China prior to 2020. Meaning that, even the brand is extremely popular, the evidence of fame generated after the infringement might be debatable in the court. 

The legal question would be, whether a use of commerce outside of China would be enough for relevant public to link a business identifier with its source of goods. In this case the court said: yes.

Certain evidence shall be noticed on Supreme’s use of commerce in China, which seems to be not sufficient.

1. Collaboration with Louis Vuitton in 2017;
2. Collaboration with Lacoste in 2017;
3. Collaboration with Nike;
4. Chapter 4 has established its solely owned subsidiary in China in 2020. And its subsidiary has set up a Weibo account “supremenewyork” making posts regarding its brand.

However, the court made a quite bold analysis on this issue and said:

“The key to judge whether it constitutes a business identifier with certain influence in the anti-unfair competition law is to judge whether there is a stable connection between the commercial logo and its right owners among the relevant public, and whether the commercial logo is used as the basis to identify the source of goods or services with its right owners. 

Today, with the globalization of economy and information, the development of information and communication, and the emergence of different business models, judging whether this kind of connection has been established obviously cannot adhere to the consideration factors in the traditional market environment: mechanically requiring to take the initiative to enter a certain regional market, continuing to operate or publicize in the regional market for a certain period of time, and achieve a certain scale of operation standards. 

On the contrary, "Carpet Marketing" and "Hunger Marketing", independent operation and collaboration, offline sales and online sales and other business models can equally achieve such connection. 

And the reports and publicity through newspaper, Internet and other media can be used as evidence of such a connection.”

“Based on the background of globalization and the regional attribute of intellectual property rights, the same commercial logo may have different right owners in different countries, and each right subject may contribute to the popularity and influence of the commercial logo internationally. 

For the ownership of the corresponding rights and interests of the logo in a certain country, we need to consider the time when the commercial logo used by different subjects is known to the relevant public, the contribution to the brand popularity and influence in that country, and the legitimacy of the use of the logo itself, so as to judge which subject the relevant public have form the relationship with. 

And those who have established stable connections firstly should enjoy corresponding rights and interests, and those who enter the market later shall make reasonable avoidance.”

To summarize, the takeaways from this remarkable court decisions are:

1. Even if Chapter 4 ‘s Supreme did not officially entered China prior than 2020, the Court did not use the traditional method to decide the criteria of “enjoying certain influence”. The Chinese media reports, honors published on Chinese websites and collaborations with other brands in China can be attributed to Chapter 4.
2. The Court also know that globalization would cause a lot of issues for trademarks in different countries but they still need to be decided and adjudicated at regional/local level. The Court basically affirned the following rules:

1. first come, first served;
2. the more famous you are, the more likely you’ll get protection;
3. you need to do it legally and with honesty;
4. for those who comes later, you need to back of a little bit.

Does this judgement represent an important jurisprudence change, confirming that actual operation in China is no longer required to establish the brand’s popularity? Or the court just making arbitrary variations based on Supreme’s extremely high popularity?We might need to wait for future cases to see.