Case Brief

Liqui-Moly Gesellschaft Mit Bescherankter Hfatung ("LIQUI MOLY") is the owner of the trademark No. G803684 " ", trademark No. G567461 "LIQUI MOLY", and trademark No. 4973900 "力魔". The defendant Liquid Power Lubricant (Zhuhai) Co., Ltd. ("LIQUID POWER") produces and sells lubricating oils, engine oils, and other products with the logos " ", " ", and " ". The first instance court, after examination, ascertained the following: the lubricating oil products bearing the alleged infringing logos " ", " ", and " ", which were produced by LIQUID POWER and Zhuhai Makhop Technology Co., Ltd. ("Makhop") and sold by LIQUID POWER and Guangdong Tianchen Trading Co., Ltd. ("Tianchen"), infringed upon the exclusive rights of LIQUI MOLY in registered trademarks; LIQUID POWER's acts of using the elements such as the German national flag and "GERMAN TECHNOLOGY" on engine oils and lubricating oils and conducting publicity campaigns constituted acts of unfair competition through false publicity under Article 8.1 of the Anti-Unfair Competition Law. The judgment was awarded as follows: LIQUID POWER, Tianchen, and Makhop shall immediately stop their acts of infringing upon the exclusive rights of LIQUI MOLY in registered trademarks; LIQUID POWER shall immediately stop the acts of unfair competition; and LIQUID POWER shall compensate LIQUI MOLY for the economic losses and reasonable costs totaling 700,000 yuan, with Makhop bearing the joint and several liability for satisfaction to the limit of 300,000 yuan and Tianchen bearing the joint and several liability for satisfaction to the limit of 250,000 yuan.

Makhop was not satisfied with the first instance judgment, defending that it shall not be liable for compensation as a manufacturer. Makhop filed an appeal with the Zhongshan Intermediate People's Court of Guangdong Province, requesting the court to issue a new judgment that Makhop should not bear the joint and several liability for satisfaction or that the amount of joint and several liability for compensation to be assumed by Makhop should be lowered.

Determination of the second instance court

When accepting the filling commission from LIQUID POWER, Makhop was already aware of the bottles and cans of the lubricating oils and engine oils printed with the infringed logos provided by LIQUID POWER. The trademarks " ", " ", and "力魔" have been used by LIQUI MOLY for a long time and hold great popularity and reputation. As a specialized lubricating oil processing enterprise incorporated in 2007 with a registered capital of up to 75,600,000 yuan, Makhop is a large-scale manufacturer with a high level of expertise. Therefore, Makhop was supposed to be aware of the above trademarks of LIQUI MOLY, and instead accepted the commission from LIQUID POWER to fill the bottles and cans of the lubricant oils and engine oils printed with the above infringed logos, which constituted joint infringement with LIQUID POWER. Makhop shall bear the joint and several liability for satisfaction for the acts of infringement. The first instance court judged that LIQUID POWER should compensate LIQUI MOLY for the economic losses and reasonable costs totaling 700,000 yuan, and judged that Makhop should bear the joint and several liability for satisfaction to the limit of 300,000 yuan. Taking into overall account the acts and scale of infringement by LIQUID POWER and Makhop, the roles of respective parties, and other factors in the present case, the Zhongshan Intermediate People's Court held that the amount of joint and several liability for satisfaction in the first instance judgment was reasonable and should be upheld, and issued a judgment of rejecting the appeal and affirming the original judgment.