Dispute over Administrative Penalty and Administrative Review
The Case of Sanya Weifa Auto Detailing Center v. Sanya Administrative Law Enforcement Coordination and Supervision Bureau and Sanya Municipal People’s Government for Dispute over Administrative Penalty and Administrative Review
[Keywords]
Administrative case, intellectual property, trademark-related administrative penalty
[Key points]
Selling commodities that infringe upon the exclusive right to use a registered trademark is an act of infringement upon the exclusive right to use the registered trademark, and the administrative department for industry and commerce, according to the Trademark Law of China, is the authority to mete out punishment.
[Applicable laws]
The Trademark Law of the People’s Republic of China, Articles 57 & 60, the Administrative Procedure Law of the People’s Republic of China, Article 69
[Basic facts]
Sanya Administrative Law Enforcement Coordination and Supervision Bureau made out a Decision for Administrative Penalty, which, based on the established fact that Sanya Weifa Auto Detailing Center (“Weifa Auto Center”) had sold 54 bottles of engine oil which infringed upon the exclusive right to use the registered trademark of “Mobil” with a total value of 11,862 yuan, ordered in accordance with the Administrative Procedure Law of the People’s Republic of China, Articles 28, and the Trademark Law of the People’s Republic of China, Article 60 (2), that Weifa Auto Center immediately cease the act of infringement, be confiscated of the infringing commodities, and be fined 23,724 yuan for administrative punishment. Weifa Auto Center refused the decision and applied to Sanya Municipal People’s Government for administrative review, and Sanya Municipal People’s Government, after reconsideration, affirmed the decision for penalty above. Weifa Auto Center was of the opinion it had sold products that were authentic product from legitimate source, and should not be punished, and thus brought an administrative lawsuit.
[Judgement]
The Chengjiao Primary People’s Court, Sanya, made out the (2023) Qiong 0271 Xing Chu No. 95 Administrative Judgement: The request of Sanya Weifa Auto Detailing Center is rejected. After the judgement was announced, neither party lodged an appeal.
[Rationale]
Chengjiao Primary People’s Court, Sanya, considers that this is a case of dispute arising from the selling of infringing commodities by micro and small market entities. When it examined Weifa Auto Center, Sanya Administrative Law Enforcement Coordination and Supervision Bureau found on the left of the shop sign at the entrance the “Mobil” logo but the shop owner could not produce the brand authorization for “美孚” or “Mobil”. It then seized onsite 54 bottles of Mobil engine oil with a total purchase price of 6,547 yuan. Weifa Auto Center claimed that the Mobil engine oil it sold was authentic product from legitimate source. ExxonMobil China as the holder of the trademark, however, examined the outer package and attached labels of the product involved, and found that the product did not comply with the authentic product in features, and was thus a product that infringed upon the exclusive right to use the trademark. Weifa Auto Center then brought a lawsuit, and Chengjiao Primary People’s Court, Sanya, convened Weifa Auto Center and Sanya Administrative Law Enforcement Coordination and Supervision Bureau to have an examination on the product involved. They found that the QR code attached to the outer package of the product showed, once scanned, a bitmap which was different from the one printed on the outer package, indicating the product involved was a false “美孚” or “Mobil” product. Weifa Auto Center had no objection to the investigation result. Weifa Auto Center sold false products using an unauthorized trademark, and the product type was the same as the product exclusively authorized to use the trademark, therefore, the act, according to the Trademark Law of China, constitutes an infringement upon the trademark.
According to the Trademark Law of China, Article 60 (2): When addressing the dispute, if the administrative department for industry and commerce is of the opinion that the infringement is established, it shall order the relevant party to immediately cease the infringing acts, and shall confiscate and destroy the infringing goods and instruments mainly used for manufacturing the infringing goods and forging the registered trademark. Where the illegal business revenue is CNY50,000 or more, a fine of up to five times the illegal business revenue may be imposed thereon; where there is no illegal business revenue or the illegal business revenue is less than CNY50,000, a fine of up to CNY250,000 may be imposed thereon. If a party has committed trademark infringement on two or more occasions within five years or falls under any other serious circumstances, it shall be subject to heavier sanctions. If the party is unaware of the infringing nature of such goods and is able to prove that the products are obtained by legitimate means and can provide information on the suppliers of the goods, it shall be ordered to stop selling the goods by the administrative department for industry and commerce.” Weifa Auto Center has submitted purchase bills that do not bear the signature or stamp of any legal market entities, and cannot prove that the product involved is obtained by legitimate means. Even if the provision of “where there is no illegal business revenue” above is adopted for calculation, the fine of 23,724 yuan as decided by Sanya Administrative Law Enforcement Coordination and Supervision Bureau has not exceeded the upper limit of 250,000 yuan as stipulated in Article 60 (2) of the law above. Therefore, the decision for penalty is correct in the application of laws and the penalty is appropriate. The review decision of Sanya Municipal People’s Government to sustain the penalty decision complies with the law in procedure and is justifiable in result.
