Michelin successful in China trademark dispute

The French tyre company recently won a trademark infringement case in China against Sentaida, a distributor with whom they had an agreement between 2006 and 2009.

In China, as well as using their Michelin man logo and the word ‘Michelin’ as marks, the French company also uses ‘米其林’ or MI QI LIN, a phonetic translation of their name in Chinese.  According to Wan Hui Da Law Firm, in their lawsuit filed in 2011, it is this name that  they claimed had been infringed upon by Sentaida since the Chinese company was using the similar sounding terms (CENCHELYN and SEN QI LIN) on their own goods. Furthermore, the French company also discovered that a local Chinese tyre dealer, Li Daowei, had been marketing Sentaida tyres under the Chinese trademark name owned by Michelin.

During the proceedings at the Chongqing Fifth People’s Court and then the Chongqing High People's Court it was found that one of the two similar marks being used by Sentaida was infringing on Michelin’s mark and that the tyre dealer was also infringing the French company’s mark by using it without their consent. Both companies were obliged to pay damages to Michelin of Rmb10,000 and Rmb50,000 respectively.

However, Michelin still believed that Sentaida was infringing upon their mark by using the term CENCHELYN and therefore they decided to appeal to the Supreme People’s Court. The SPC ruled on the case earlier this year considering the effect of the infringement on the excellent reputation of Michelin’s marks. They ruled that CENCHELYN was an infringement of the French company’s mark and they increased the amount of compensation to be paid to Rmb500,000. This is the highest amount of compensation allowed under China’s 2001 Trademark Law.

This ruling has shown that Chinese courts are now acting more in favour of those whose trademarks have been infringed upon and are prepared to order sufficient damages to be paid to them if a case of infringement is found.

A trademark is a worthwhile investment as it will protect your brand and allow you to enforce your trademark rights over other companies that may infringe upon your mark. When entering a new market, it is best to register a trademark before your company begins trading. Although this is not always possible in some countries like China, your company should still aim to file for a trademark application as early as possible to reduce the likelihood of future conflicts with other similar brands.

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