Lusheng, a leading Chinese law firm and patent agency specialising in multinational intellectual property (IP) and the strategic partner of Rouse, has helped its client, globally renowned watch brand, Casio Computer Co., Ltd win a landmark unfair competition lawsuit in China.
The High People’s Court of Guangdong Province ruled that the use of Casio's distinctive GA-110 watch design by Guangzhou Teyuan Watch Industry Co., Ltd. and Shenzhen Tasgo Watch Co., Ltd. was an act of unfair competition that could confuse consumers.
The court's decision affirmed that the design features of the GA-110 watch are distinctive, non-functional, and have acquired significant consumer recognition, associating them strongly with the Casio brand. The defendants' use of a nearly identical design was therefore deemed unfair competition, diluting the distinctiveness of Casio's trade dress and harming its business interests.
As a result, the court ordered the defendants to pay Casio 3 million RMB ($414,000) in damages, calculated based on a combination of the impact of their infringing actions, malicious intent, and sales record.
The court rejected the defendants' argument to exclude sales data inflated by ‘brushing’ – the practice of creating fake orders to manipulate online rankings – from the damage’s calculation, highlighting that businesses will be held accountable for such deceptive practices.
The victory represents the first case in which relief under China’s Anti-Unfair Competition Law has been granted to Casio for a product design with expired design rights. It sets an important precedent for the industry, highlighting the tools businesses have at their disposal to protect their brands even after design patents expire.
Sales evidence have been extracted from several online platforms, including 1688 and Tmall where the defendants sold infringing watches. With the favourable judgment, CASIO may also be able to extend protection on online platforms, as online platforms are increasingly willing to support unfair competition claims to clamp down on this practice on their sites.
Landy Jiang, Managing Partner and Co-Head of Dispute Resolution at Lusheng, commented on the case: "This victory underscores the strength of trade dress protection in China, even after design patents expire. It demonstrates the courts' commitment to safeguarding intellectual property rights, combatting unfair competition, and protecting genuine, iconic brands, particularly in the online marketplace. It also highlights China’s determination to target counterfeiters and copycats, sending a clear message to businesses operating in this space.
“This decision will serve as a valuable precedent for brand owners adding an additional layer of defence for those seeking to protect their unique product designs and will help shoppers from copycats moving forward."
The successful outcome for Casio reinforces Lusheng's expertise in complex IP litigation and the firms’ dedication to protecting its clients' brands in the competitive Chinese market.
