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Intellectual property in China

Alfred Dunhill awarded 10 million yuan in ‘groundbreaking’ trademark infringement case against Chinese clothing firm Danhuoli

Court ruling said to strengthen China’s growing reputation for intellectual property rights protection

PUBLISHED : Thursday, 11 October, 2018, 10:34am
UPDATED : Thursday, 11 October, 2018, 3:09pm

British luxury brand Alfred Dunhill was awarded 10 million yuan (US$1.44 million) in damages on Wednesday after a “groundbreaking” decision by a Chinese court found a local rival guilty of trademark infringement and unfair competition practice.

The Foshan Intermediate People’s Court in Guangdong Province also deemed the individual responsible for menswear firm Danhuoli personally liable for the infringement, giving extra teeth to the court’s decision and strengthening China’s growing reputation for intellectual property protection.

The decision comes amid an increasingly bitter trade war between the US and China, in which one of the most thorny issues is intellectual property rights (IPR) protection.

US President Donald Trump has repeatedly lashed out at China’s lax IPR protection laws, forced technology transfer and alleged IP theft, saying it costs the United States as much as US$600 billion per year, a charge China has denied.

Earlier this month, Chinese sources told the Post the country would improve its IPR protection to bolster innovation and support industries, but not as a result of US pressure.

Reacting to the court decision, Alfred Dunhill CEO Andrew Maag said: “Today’s ruling demonstrates Alfred Dunhill Ltd’s unequivocal resolve in tackling infringement of our IP rights in China and globally. Our system of IP management and enforcement is second to none. With the support of Rouse and Lusheng law firm, we’ve secured a fair and proportionate ruling.”

Why US and China remain so far apart on IP rights

Luke Minford, global CEO of Rouse, the international IP consultancy that supported the brand, said: “This win for Alfred Dunhill is just reward for all their hard work protecting their brand in China. The decision should reinforce to other brand owners that China is finally getting serious about protecting foreign brands.”

The trademark infringement case centred around Danhuoli’s illegal imitation of the “long tail mark” of Alfred Dunhill’s globally recognised logo.

Danhuoli had originally registered the “Danhuoli” trademark in plain font, but had for several years used the mark in a manner bearing striking similarities to Alfred Dunhill’s signature elongated lettering and black-and-white colour palette.

The budget clothes company had also established a shadow company named “Dunhill Group” in Hong Kong to manage corporate business activities for the brand. Alfred Dunhill had previously been successful in shutting down the shadow company in Hong Kong, although it continued to trade across the Chinese mainland.

Danhuoli operates more than 200 franchise stores across 61 cities in China, claiming to generate an annual turnover of 100 million yuan.

The case represents a landmark trademark victory in China for global brands, given the scale of the damages. The 10 million yuan sum is significantly larger than the average amount awarded in trademark infringement cases in China.

The ruling is another key milestone in China’s continued crackdown on IP infringement. Over the past decade, the country has made significant strides in developing and enforcing a robust IP rights regime, bringing the Chinese IP landscape more in line with other developed systems in the US and Europe.