Recently, Llinks Lawyer represented the well-known children's clothing brand moodytiger in a lawsuit against a company in Wuxi for clothing counterfeiting and unfair competition. The Wuxi Intermediate People's Court overturned the first-instance judgment in the second-instance trial, increasing the compensation amount by 127%, setting a new standard for compensation calculation in similar cases.
The three major breakthrough determinations in the second-instance trial are as follows:
(1) Breaking through Article 2 of the Anti-Unfair Competition Law regarding style counterfeiting: The court clearly recognized that the defendant's conduct of counterfeiting clothing designs combined with counterfeit promotional images, which diverted the plaintiff's customers when consumers used the "search for the same style" function, violated the principle of good faith and business ethics, constituting unfair competition.
(2) Anchoring compensation amount based on listed companies' profit margins: The second-instance court adopted part of the plaintiff's claims, referencing the average operating profit margins of three listed children's clothing companies including Semir, and precisely calculated the infringing profits based on the infringement sales amount, thus ending the industry's customary practice of discretionary compensation.
(3) Full support for reasonable costs of rights protection: For the first time, the court recognized that installment-paid attorney fees are "inevitable expenses." Despite the defendant's challenge regarding the conditions of payment, the court fully supported the attorney fees, notarization fees, and guarantee fees in this case, highlighting adequate compensation for the costs of rights enforcement.
The typical significance of the second-instance judgment lies in incorporating the "search-for-the-same-style function diversion" into the consideration of competitive damage, establishing the judicial logic of "style counterfeiting + low-price dumping = capturing business opportunities," thereby providing strong protection for clothing design innovation. Meanwhile, using financial data from listed companies as the basis for compensation calculation offers a quantifiable adjudication model for similar cases.
This case was represented by the Llinks lawyer team led by Ms. Cherri Che. Ms. Che's team specializes deeply in intellectual property, with extensive expertise in patent, trade secret, trademark, and copyright litigation and non-litigation services. The team has handled landmark intellectual property cases at the Supreme Court level, and is capable of quickly and accurately understanding clients' commercial demands and technical solutions. They are committed to building "legal + commercial" comprehensive rights protection solutions for enterprises and continuously providing high-quality legal services to innovation entities.
