Zhejiang Court applied the Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Cases of Infringement of Intellectual Property Rights for the first time in the judgment of second instance on trademark between the plaintiff WYETH LLC and Guangzhou Wyeth Company and other defendants, and fully supported WYETH LLC, the trademark owner's claim for compensation of 30.55 million yuan.

The defendant Guangzhou Wyeth-Baby Maternal and Infant Products Co., Ltd. has been producing and selling maternal and infant washing and protection products with the logos of "惠氏", "Wyeth" and "惠氏小狮子" on a large scale for a long time, owns trademarks such as "惠氏" and "Wyeth" in washing and protection products and other categories through preemptive registration, transfer and other manners, and implies that it is associated with WYETH LLC in publicity and promotion. The defendants Zeying CHEN and Xiaokun GUAN set up Wyeth China Co., Ltd. in Hong Kong in 2009, accepted trademarks such as "惠氏" and "Wyeth" and licensed Guangzhou Wyeth Company and others to use them. They also set up Guangzhou Zhengai Daily Necessities Co., Ltd., Qingdao Wyeth Baby Maternal and Infant Products Co., Ltd. and other sales entities to implement trademark infringement online and offline; the predecessor of Hangzhou Xiangdi Maternal and Infant Products Co., Ltd. also used "惠氏" as its business name, and jointly operated online shops with Guangzhou Wyeth Company, selling trademark infringing products online and making huge profits.

The plaintiffs WYETH LLC and WYETH Shanghai Company sued Guangzhou Wyeth Company and other five defendants in court for trademark infringement, requesting to stop trademark infringement and unfair competition, and apply punitive damages of 30 million yuan for economic losses and reasonable expenses of 550,000 yuan.

The court of first instance held that, based on the above contents, for punitive damages multiples, the "subjective malice" and "serious circumstances" of each defendant were comprehensively considered, so the compensation amount was calculated by three times. As for the compensation amount, after calculation, whether it is based on the defendants' online shop sales (online shop sales of 30 million multiplied by 50% equals 15 million) and dealer channels (42 stores multiplied by contract index of 600,000 per year equals 12.6 million) or the defendant Guangzhou Wyeth Company's regional manager's self-admitted sales amount (self-admitted sales amount of 60 million multiplied by 50% gross profit rate equals 30 million), the calculated defendants' profit both exceeds 10 million yuan. Therefore, Hangzhou Intermediate People's Court of first instance fully supported the claims of WYETH LLC and WYETH Shanghai Company for compensation of 30 million yuan after calculating the compensation amount according to three times the infringement profit.

All six defendants refused to accept the first-instance judgment and appealed to Zhejiang Provincial Higher People's Court. In the second instance stage of the case, Zhejiang Provincial Higher People's Court held that the facts found by the court of first instance were basically clear and the punitive damages were handled correctly in entity. At last, the judgment of first instance was upheld on April 26, 2021.

The judgment in this case demonstrates the determination and ability of Zhejiang courts to strengthen the judicial protection of intellectual property rights and equally protect Chinese and foreign parties, and further clarifies the criteria for determining the intentional and serious elements in the application of punitive damages, as well as the meaning of the base and multiple of punitive damages.