I. Parties

Plaintiff: Yinian (Shanghai) Garments Trading Co., Ltd. (衣念服装贸易有限公司).

Defendants: Du Guofa (杜国发) and Zhejiang Taobao Network Co., Ltd. (浙江淘宝网络有限公司)


II. Facts

The E-Land Ltd. (hereinafter E-Land) has registered the trademarks No. 1326011 and No. 1545520, which were both exclusively licensed to Yinian in China. The garments bearing trademark TEENIE WEENIE are popular in the clothing market, and are regarded as a famous brand in Shanghai.

Du Guofa used the trademark TEENIE WEENIE to sell garments at his online store on Taobao.com. It was investigated that, from December 1, 2009 to February 1, 2010, twenty odd counterfeit garments were sold at Du’s store, making total revenue of RMB 3,077. The retailing price for these counterfeit garments is one-fifth or even one-tenth that of the genuine one. In addition, the counterfeit ones were of poor quality, resulting in immeasurable depreciation of the trademark.

Since September 2009, Yinian had launched a large number of lawsuits against Taobao Network Co., Ltd. (Taobao) on the ground that the latter sold counterfeit products bearing the former’s trademark. The courts presiding over these cases ruled to issue seven take-down notices to the seller Du Guofa, requesting Taobao to delete the information concerning the infringing goods issued by him and to take effective measures, such as proactive review and keywords screening, to stop the spread of infringing activities. However, Taobao failed to act correspondingly, but continued to connive and assist the infringing act conducted by Du Guofa.

Therefore, Yinian filed a lawsuit against Du Guofa and Taobao for trademark infringement before the court, claiming compensation for its aggregate losses at RMB 30,000 together with the reasonable expenses of RMB 54,900, including notary fee and attorney fee, and requesting the co-defendants Guofa Du and Taobao to make a public apology to Yinian at the portal websites Sina.com, Sohu.com, Taobao.com, and the Morning News journal.

Du Guofa argued that the garments sold by him were originally purchased from other websites, and that he did not know that they are committing infringement. Taobao argued that its duties had been discharged by its taking reasonable and prudent measures to protect the legitimate interests of Yinian. Taobao also submitted that Yinian abused its rights, for Yinian had filed a sheer volume of wrong complaints, which has impaired the reputation of Taobao. Therefore, Taobao plead that the court should dismiss Yinian’s claims.