By King and Wood Mallesons

On 31 December 2019, Guangdong People’s Higher Court made its ruling on the trademark infringement and unfair competition civil suit between Italian luxury brand Bvlgari and Hunan Taskin Investment Co. Ltd, etc., recognizing the former’s “BVLGARI 宝格丽” mark under Reg. No. 3811212 for “accessories (jewelry); watches” a well-known trademark, and consequently holding the defendant’s use of “宝格丽 (Bvlgari in Chinese characters)” and “宝格丽公寓 (Bvlgari Residential Building in Chinese characters)” in a prominent manner on commercial properties the defendant developed and on the promotional materials thereof constitute infringement against Bvlgari’s aforementioned trademark registration. This second-instance and also final ruling rules that Taskin compensate for Bvlgari’s damages and expenditure. It is worth noting that against the background where the first-instance court made no decision on whether the “BVLGARI宝格丽” trademark constitutes well-known mark, and that recently few courts on a nation-wide scale made well-known trademark recognitions in civil infringement cases, Guangdong Higher Court’s overruling in recognizing “BVLGARI宝格丽” as a well-known mark carries tremendous significance, showcasing the principle of “to recognize as needed” by the Trademark Law of PRC concerning well-known trademarks. For Bvlgari, this ruling marks the first time its mark has ever been recognized as a well-known trademark in civil infringement cases in the country. The ruling that the well-known “BVLGARI 宝格丽” trademark can be protected in real estate services will undoubtedly cast an active and profound impact on Bvlgari’s business expansion and brand protection in China.

Founded in 1884, Bvlgari is a renowned Italian luxury brand of jewelry, watches, perfumes, leather goods and accessories. Bvlgari has launched into the luxury hotel, resort and real estate market in recent years, with landmark projects such as Bvlgari Resort Bali, Bvlgari Hotel Beijing, Bvlgari Hotel Shanghai, Bvlgari Residences Shanghai and so on. Back in 2014, shortly after Bvlgari just started hotel and residential property development in China, it came to Bvlgari’s attention that Hunan Taskin Investment Co., Ltd. had been using “宝格丽 (Bvlgari in Chinese characters)”, “Baogene (pronunciation similar to Bvlgari in Chinese)” and “宝格丽公寓(Bvlgari Residential Building in Chinese characters)” – in a prominent manner – on the commercial properties the latter was then developing in Changsha, China and on the promotional materials of the said projects. Bvlgari and its Chinese subsidiary Bvlgari Commerce (Shanghai) Co., Ltd. jointly filed a civil action before the Shenzhen Intermediate People’s Court, seeking injunctive and monetary relief. During the course of the first instance litigation, Taskin voluntarily replaced and destroyed the infringing signs. On 28 December 2017, the Shenzhen Intermediate People’s Court made the ruling that Taskin stop infringement activities right away and compensate Bvlgari with CNY1,000,000 (about USD142,857). In the ruling, the first-instance court found that Bvlgari had obtained trademark registrations in respect of Class 36 services “sales of commercial residential buildings; real estate services” in China, hence no need in deciding whether the “BVLGARI宝格丽” mark constitutes a well-known trademark.

Both parties appealed. The Guangdong Higher Court, the appellate court, found that as Bvlgari’s four marks in Class 36 were registered during the first-instance proceedings, Taskin’s activities prior to the proceedings do not constitute infringement against the aforesaid four marks. However, since Bvlgari had both made well-known trademark claim for its Class 14 registration for “BVLGARI宝格丽”, requesting cross-class protection, and claimed the sued behaviors infringe upon “BVLGARI” and “宝格丽” marks covering identical or similar real estate-related services, it is still necessary to decide whether the mark in question constitutes a well-known mark and to rule on the nature of the sued behaviors and the appropriate legal responsibilities thereof. During the first and second-instance proceedings, Bvlgari submitted a large body of evidence in connection with the marketing and promotion of the “BVLGARI宝格丽” jewelry and accessories throughout many years. Based on the evidence, the second-instance court decided that following long-term and substantial use and promotion, the “BVLGARI宝格丽” trademark under Reg. No. 3811212 has acquired considerable notability and reputation to the extent of being well known. At last, the court held that Taskin’s use of identical or similar marks with Bvlgari’s well-known mark will mislead the pertinent public, and that such behaviors constitute trademark infringement and unfair competition. The compensation was raised to CNY3,100,000 (about USD442,857).