CNY40 Million Damages Awarded!

Schneider Electric China vs Suzhou Shinaide Elevator

Recently, CNY40 million damages were awarded against Suzhou Shinaide Elevator by a Chinese court in a case of trademark infringement and unfair competition involving Schneider Electric (China) Co., Ltd. vs. Suzhou Shinaide Elevator Co., Ltd.

Schneider Electric Se holds the trademark registrations for “” and its Chinese equivalent “施耐德” (Shi Nai De), covering electric switches, among others, in Class 9. Schneider Electric China is the licensee of the above trademarks. Suzhou Shinaide Elevator Co., Ltd. (苏州施耐德电梯有限公司) used the trademarks “Schneider” and “施耐德” (Shi Nai De) on its elevators, and the distinctive element of its company name is also “施耐德” (Shi Nai De). Schneider Electric China initiated a civil action against Suzhou Shinaide Elevator’s use of the trademarks “Schneider” and “施耐德” for trademark infringement as well as the use of the company name for unfair competition.

According to the Chinese Trademark Law, only a registered well-known trademark can stop a third party’s use of an identical or similar mark on dissimilar goods. Since the sued trademarks and name were used on elevators, which are dissimilar to the goods covered by the trademark registrations of Schneider Electric Se, the courts ascertained that the above-mentioned registered trademarks of Schneider Electric Se had become well-known before Suzhou Shinaide Elevator used them, and found that the use of the said trademarks by Suzhou Shinaide Elevator amounts to trademark infringement.

In addition, the courts held that it constitutes unfair competition for Suzhou Shinaide Elevator to use “施耐德” (Shi Nai De) as the distinctive element of its company name, which is likely to be confused with the trademarks and trade name of Schneider Electric.

In light of the above, the court ordered Suzhou Shinaide Elevator to stop using the said trademarks and company name, and to pay Schneider Electric China damages of CNY40 million. Suzhou Shinaide Elevator appealed against the court decision, but the appeal was dismissed.

Since the protection of a registered trademark is limited to similar goods unless the registered trademark is well known, and the standard for cognizing a well-known trademark is very high, famous brands are frequently used or registered on other goods by dishonest third parties. This case is a reflection of the Chinese courts’ efforts to depress such dishonest activities and encourage the market participants to establish their own brands.