CNIPA: Israeli Company Takes Down Local Distributor Tampering with Trademark-ed Products
In November 2016, Shanghai Minhang District Market Supervision Office received a complaint from the Israel- based Bermad Company, the trademark owner of "伯 尔 梅 特BERMAD", accusing Shanghai Bermad Control Valve Company of manufacturing and selling valve products infringing its registered trademark right, and requesting sanctions from the Office After investigation, the Shanghai firm was found having pruchased the red fire valve and blue pressure reducing valve with the "BERMAD" trademark through the proper distribution channel at relatively low prices from 2014 to 2016. The following act makes the company culpable when it changed the color of the valve into green which is supposed to be the color of a digitally controlled electro- hydraulic valve. The Shanghai firm also removed the gaskets of the purchased valve products and replaced them with gaskets purchased elsewhere. After the retrofitting moves, the perpetrator sold 64 units of counterfeit green electro- hydraulic valves for 1,464,275 yuan. Adding the 17 unsold units still sitting at a warehouse, the total value of goods in question is 1,870,838 yuan. Such retrofitting and selling acts are a clear violation of Article 57 of the Chinese Trademark Law. Accordingly, Shanghai Minhang District Market Supervision Office invoked Article 60 of the same law to impose injunction on the Shanghai firm, seize 17 units of infringing valve products and penalize 5.61 million yuan.
Impact of the Case
In this case, the Shanghai firm not only changed the color of the valve, but also replaced its key components, leading to the change of the product's original function and use, which shall be deemed as a substantial change to the original product. The company even sold the modified products in the name of the trademark owner. The act shall be deemed as trademark infringement. Penalty- wise, this is the biggest trademark violation case ever dealt by Shanghai Industry and Commerce administration as well as market regulatory authority. The successful investigation and handling of the case fully reflects that Shanghai market supervision authority's determination and competence in IP protection, preserving the fine image of China's resolve in IP protection.