In Hermes International vs. Shandong Hugang Jianye Real Estate Development Co., Ltd. (“Hugang Jianye”), the Shandong High People’s Court upheld a first instance judgment and decided that Hugang Jianye’s use of the name "Hermes Theme Apartment", and its prominent use of the Hermes logo, constituted trademark infringement and unfair competition. The court awarded Hermes compensation of RMB 2 million (Approx. USD 274K)
Hermes owns trademark registrations in China for 爱马仕 (Hermes in Chinese) and HERMES covering bags, leather goods, etc. The luxury brand HERMES was accorded recognition as a “well-known” mark in China, which confers cross-class protection.
Trademark of HERMES
A Chinese company named its apartment building "Hermes Theme Apartment" and the décor, furnishings and decorations in the sales center displayed the trademarks HERMES PARIS and HERMES.
The trademark displayed in the sales center
A showroom was coloured orange (the iconic Hermes colour) and furniture and decorations carried HERMES-related marks. The name HERMES THEME APARTMENT was widely disseminated.
The Court found that the acts of Hugang Jianye constituted trademark infringement and unfair competition on the following bases:
- Hermes’ registered marks were widely recognized at the time of the alleged infringement and they constituted “well-known” marks.
- Use of the plaintiff’s marks in the context of the commercial activities of the defendant would mislead the public into believing that the commercial properties in question had some form of connection to Hermes. The use of 爱马仕 as the name of the development showed that the defendant had an intention to mislead the public and to trade on the popularity and reputation of Hermes’ marks, diluted their distinctiveness, and improperly leveraged the market reputation of Hemes to generate unlawful profits, and caused damage to the legitimate commercial interests of Hermes.
- The company implied or expressed that its apartments were related to the Hermes brand. The misleading publicity was likely to cause confusion and constituted unfair competition.
- In calculating compensation, the court took account of the contribution of the infringed mark to the profitability of the property, the malice of Hugang Jianye, and the scale of its operation to arrive at an award of RMB 2 million.
This is not an isolated case. There have been other examples of real estate enterprises misusing luxury brands in the marketing of their developments:
Use form of the mark
Highlight of the rulings
Infringement of trade mark “拉斐水岸 (LA FEI SHUI AN; transliteration of LAFITE) (2020)
Property named “拉斐水岸”
Beijing High People's Court:
"拉菲(LAFITE)" recognized as a well-known mark; the use complained of dilutes the distinctiveness of the mark, misleads the public and constitutes trademark infringement;
Damages of RMB 5 million awarded
Infringement of trade mark “宝格丽公寓(BAO GE LI GONGYU, BVLGARI apartment in Chinese)” and unfair competition (2018)
Property named “宝格丽公寓”
Guangdong High People's Court:
"BVLGARI宝格丽" constitutes a well-known mark; use complained of dilutes the distinctiveness of the mark, misleads the public and constitutes trademark infringement; also infringement of a prior trade name right
Damages of RMB 3.1 million awarded
Infringement of trade mark PRADAMILASNO and unfair competition (2013)
Development advertisement referred to PRADAMILANO and wrongly claimed that PRADA was moving in
Xi'an Intermediate People's Court of Shaanxi Province:
Defendant had illegally exploited the reputation of the PRADA trademark and name, which damaged the brand image of Prada and constituted unfair competition.
But it was non-trademark use and did not mislead as to a source of goods or services and so did not constitute trademark infringement
Damages of RMB 30,000 awarded
Infringement of trade mark “LV” and unfair competition (2004)
Giant outdoor advertisement for real estate included model carrying “LV” handbag
Shanghai 2nd Intermediate People's Court:
Defendant's use of LV bag in advertisements was malicious and constituted unfair competition, but such non-trademark use did not mislead the public and constitute trademark infringement
Damages of RMB 50,000 awarded
These cases illustrate the determination of luxury brand holders to actively assert their registered trademark rights to combat misuse and unfair competition. They are also a deterrent to other enterprises, who could pay a high price for unfairly trading on the goodwill and reputation of others' trademarks.