The plaintiff Shanghai Saiyi Environmental Protection Equipment Co., Ltd. is the trademark owner of trademarks such as "Saiyi", "SCIYEE" and "SCIII" (hereinafter referred to as "trademarks involved"), and all relevant trademarks are approved to be used on Class 11 "water filters, water purification devices, water softening equipment and devices, etc.". Defendant Shanghai Wanneng Environmental Technology Co., Ltd. (hereinafter referred to as "Wanneng Company") signed a material procurement contract with a certain bureau for the "Jinqiao Technology Center Base Project of SSE" (hereinafter referred to as "Jinqiao Project"), and provided automatic dosing device and other commodities with "Saiyi" brand for the project. Wanneng Company then reached an agreement with Company A, an outsider, and agreed that Company A would undertake the procurement of the project. Company A signed several sales contracts with Defendant Changzhou Yishui Environmental Engineering Co., Ltd. (hereinafter referred to as "Yishui Company"), agreeing that Yishui Company will supply the infringing products involved. Therefore, the plaintiff brought the two defendants to Pudong New Area Court on the grounds of trademark infringement and unfair competition. 

The court of first instance held that the acts involved by the two defendants constituted trademark infringement. The infringement claimed by the plaintiff includes: (1) Yishui Company uses the trademark involved in the external sales contract; (2) Yishui Company uses the same trademark involved as the plaintiff in the product model; (3) the products sold by Yishui Company forged the manufacturer's name as "Saiyi Environmental Technology Co., Ltd." (which does not actually exist), thus infringing the trademark rights enjoyed by the plaintiff. Yishui Company argued that in the lawsuit filed by Company A against Yishui Company on Jinqiao Project (hereinafter referred to as "prior judgment"), it was determined that the equipment provided by Company A was self-produced, not the type of equipment agreed in the contract, and it was judged that it was liable for breach of contract, so the infringing products used in Jinqiao Project were not provided by Company A. The court held that: according to the invoice details issued by the Yishui Company to Company A, the project site equipment and other evidence, the Yishui Company actually fulfilled the relevant agreement contents, and the "equipment not the model agreed in the contract" mentioned in the previous judgment could not be understood as the infringing products involved were not provided by the Yishui Company. Due to the lack of evidence, Yishui Company signed an agreement with others without permission to produce and sell infringing products involved in the case, which constituted trademark infringement, and Wanneng Company's sales of infringing products involved in the case as a supplier constituted trademark infringement. 

With regard to compensation for losses, the Court of First Instance held that the two elements to consider whether the Yishui Company should apply punitive damages are: (1) Intention of infringement: factors such as the type of infringed object, the status of rights and the popularity of related products, and the relationship between the defendant and the plaintiff or interested parties should be comprehensively considered. Because the plaintiff was established earlier, the right trademark was used for a long time, and the related products were well-known, according to the documented evidence, Yishui Company still committed infringement knowing that the plaintiff was the owner of the trademark involved, and had infringement intention. (2) Infringement circumstances: In another case, Yishui Company has issued a letter of commitment to the plaintiff as the relevant party, but it still implements the infringement in this case, and the contract amount is relatively large, which eventually leads to the delay of rectification of Jinqiao Project, causing damage to many parties, and the circumstances are relatively serious. Therefore, punitive damages should be applied. 

The plaintiff claimed that the compensation amount should be calculated according to the profit of the Yishui Company, which was supported by the court of first instance. According to the documented evidence, the supply amount of Yishui Company to Jinqiao Project is 510, 560 yuan, with the actual profit at 25%, so the calculation base of punitive damages in this case is 127,640 yuan. The court of first instance supported the plaintiff's claim that punitive damages should be applied at least 4 times of the infringement profit of Yishui Company, and determined that the total amount of compensation it should bear should be the sum of the amount of compensation and punitive damages, that is, 5 times of the base number, totaling 638,200 yuan. In addition, Yishui Company needs to compensate the plaintiff for lawyer's expenses of 70,000 yuan. Wanneng Company is jointly and severally liable for 70,000 yuan. 

Both the plaintiff and the two defendants refused to accept the ruling and appealed to Shanghai Intellectual Property Court. The court of second instance held that, first of all, regarding the Yishui Company's request to add an outsider, Company A, the previous judgment had found out the relevant supply situation. Although Yishui Company advocated that the logo on the product should be added by Company A or Wanneng Company, it did not give effective evidence. Secondly, with regard to the amount of compensation, according to the documented evidence, the Court of First Instance found that the Yishui Company had conducted intentional infringement and the situation was serious. Finally, Wanneng Company has no subjective fault in the supply of the project involved, that is, the subjective fault of Company A does not apply to Wanneng Company, so it should not bear the corresponding liability for compensation, but it should still stop the relevant infringement and share the plaintiff's reasonable expenses with other infringers. To sum up, the court of second instance rejected the appeal and upheld the original judgment.