Jaguar Stopped a Jaguar Imposter in Using its Marks in China

[By Arthur Tan-Chi Yuan]

[Author’s note: Key lessons for non-Chinese litigants: business name registration; trademark infringement, unfair competition, injunctive relief]

Beijing Second Intermediate People’s Court

Jaguar Cars, Ltd.

(plaintiff)

v.

China Jaguar Brand Management Co.

v.

Beijing FengHengSheng Trading Co., Ltd.

v.

Beijing HengTaiShun Trading Co., Ltd.

v.

Zhejiang Zhengda Trademark Agency Co., Ltd.

March 20, 2007

Doing business in China was probably tough for foreign companies in 2006-2007, and it was certainly worse for Sir William Lyons’s legendary Jaguar Cars Limited.  Jaguar Cars Limited (“Jaguar”) turned almost 67 years ago on April 9, 2012 (about 90 years if you count the years as Swallow Sidecar Company), and it was embroiled in a case of trademark infringement, forged licenses, unfair competition, etc., before Tata Motors purchased it from Ford Motors in 2008.  But, in the end, with the right evidence, the Chinese court untangled the con and saved the day. 

TM Registration #

Filing date

Mark design

60319

7/16/1991

1393238

9/18/1998

170618

11/17/1998

 

Jaguar brought this case against the four Chinese defendants over a series of allegations, including trademark infringement, fraud, unfair competition, etc., in 2006.  Jaguar obtained the following three trademark registrations (in addition to these other ones) in China for products in classes 9, 18 and 25, in addition to its core automobile business.  China Jaguar Brand Management Co. (“Chinese Jaguar”), founded in Hong Kong on May 7, 2004, filed a series of allegedly fraudulent or forged documents with the Chinese Trademark Office (“CTO”), including an alleged “trademark assignment and transfer agreement” transferring the trademark rights in question from Jaguar to Chinese Jaguar.  In further perpetrating this scheme upon Jaguar, Chinese Jaguar elicited assistance from the co-defendant, Zhengda Trademark Agency Co., Ltd., as its agent.  Once the documents were approved by the CTO, the Chinese Jaguar began to conduct business as a legitimate company: it licensed Jaguar’s marks to businesses in exchange for royalties, such as with the other defendants.  It even threatened Jaguar’s actual licensees from stopping using Jaguar’s marks. 

Chinese Jaguar failed to present any defense.  Beijing FengHengSheng Trading Co., Ltd. and Beijing HengTaiShun Trading Co., Ltd. argued that they were innocent bystanders in this fraud masterminded by the Chinese Jaguar.  They in fact thought the Chinese Jaguar were the exclusive licensee of Jaguar and paid Chinese Jaguar about 300,000 RMB for the license to use the trademarks in question.  Moreover, defendant Zhejiang Zhengda Trademark Agency Co., Ltd. (“Zhengda”) claimed it had done all it could in ascertain the proper identity and authenticity in representing the Chinese Jaguar’s matter. 

After reviewing evidence presented by the parties, the Court found that the alleged trademark assignment and transfer contract between Jaguar and Chinese Jaguar was written in Chinese and was signed on March 1, 2004, about two months before the date of incorporation of the Chinese Jaguar.  The signatory for Jaguar was also illegible.  At the same time, Jaguar proffered the authenticated signature of its legal representative, and the Court admitted it into evidence.  Therefore, the Court found for Jaguar that Chinese Jaguar infringed Jaguar’s trademark rights and Zhengda furthered Chinese Jaguar’s infringement by failing to properly identify the obvious error between the date of signature and the date of incorporation. 

With respect to the unfair competition claim, however, the Court didn’t rule in favor of Jaguar against Zhengda, because Zhengda was not in the same business as Jaguar.  Additionally, the Court held that Beijing FengHengSheng Trading Co., Ltd. and Beijing HengTaiShun Trading Co., Ltd. were in good faith in dealing with Chinese Jaguar. 

Lastly, the Court did rule in favor of Jaguar against Chinese Jaguar by issuing an injunction against Chinese Jaguar to immediately stop infringing Jaguar’s trademark rights.  With respect to damages, the Court held in favor of Jaguar by ordering Chinese Jaguar to pay 500,000 RMB for economic loss, 8,000 RMB for litigation cost, and 10,000 RMB court acceptance cost.  The Court also ordered Beijing FengHengSheng Trading Co., Ltd. and Beijing HengTaiShun Trading Co., Ltd. to cease selling products that infringe Jaguar’s trademarks and pay 5,000 RMB for court acceptance cost.

Note:

  1. A mark based on translation or a combination of transcription and transliteration: “JAGUAR” in Jaguar’s name, “Jaguar Cars Limited,” is translated based on the literal translation of the word “Jaguar:”
  2. The car brand, “Jaguar,” on the other hand, is translated based on a combination of the phonetic sound of “ja” in Chinese and the semantic meaning of “jaguar”:
  3. When it comes to translating English to Chinese, these are two basic types of translation scheme: the pure transcription and transliteration.  The defendant, China Jaguar Brand Management Co., therefore, used the translation of Jaguar as the company name to commit this fraud against real Jaguar Cars Limited.  For non-Chinese businesses’ marketing department/personnel, one should always consider translation issues seriously when entering into Chinese based markets: China, Taiwan, Hong Kong, Macao and Singapore, and sometimes even Japan due to the usage of Kanji characters (which are derived from Chinese characters) in Japan.
  4. For Jaguar Cars Limited, it employs two strategies: its business name employs the literal translation while its car brand name employs a combination of phonetic and semantic translations.

[Author’s note: The summary and translation from the original decision in Chinese are author’s own work, and any errors thereof shall not be attributed to any portion of the original Chinese decisions.]

 

 

Translated Decisions: