By Hansen Tao
In a landmark ruling that reinforces China’s strong commitment to trademark enforcement and fair market order, the Intermediate People’s Court of Xiangyang, Hubei Province, has awarded punitive damages to the global automotive brand BMW in a case involving the unauthorized use of its trademarks by two domestic car service centers.
The decision, issued in December 2024 and now effective, underscores how China’s judiciary applies strict legal standards, especially for well-known foreign trademarks, and affirms the growing maturity of China's intellectual property (IP) protection regime.
The Dispute: More Than Just a Name
The case began when BMW AG (plaintiff, anonymized in public records) discovered that two automotive service businesses in Xiangyang were using the Chinese name “宝马汇” (“BǎomǎHuì,” roughly “BMW Club”) and design elements closely resembling BMW’s iconic logos in their storefront signage, promotional materials, and online platforms like WeChat and Douyin (TikTok).
Despite receiving cease-and-desist letters and facing administrative intervention by local market regulators, the businesses (both operated under the direction of an individual surnamed Si) continued using the infringing names and logos. BMW ultimately filed a civil lawsuit seeking an injunction, public apology, and damages totaling RMB 11 million (approx. USD 1.5 million).
Court Ruling: Infringement Plus Unfair Competition
The court found that the defendants had:
Infringed BMW’s registered trademarks, including well-known marks like “BMW,” “BAOMA,” and stylized logos;
Violated the Anti-Unfair Competition Law by exploiting BMW’s enterprise name and brand reputation to attract customers and mislead the public;
Continued infringing activities even after official warnings, justifying the application of punitive damages under China’s Trademark Law and relevant judicial interpretations.
The defendants were ordered to:
Cease all infringing acts, both online and offline;
Change their business names to remove any reference to “宝马” (Bǎomǎ);
Publish corrective statements in official newspapers and online channels;
Pay damages and costs totaling RMB 1.497 million (approx. USD 206,000), including punitive damages calculated using a base derived from estimated revenues and profits.
Why This Case Matters
1. Punitive Damages Against Persistent Infringers
While punitive damages were introduced into China’s Trademark Law in 2013, their application remained cautious. This ruling is notable for its clear, formula-based application:
Punitive Base = Estimated Annual Revenue × Profit Margin × Infringement Period
Multiplier: 1× based on severity and intent
This shows that Chinese courts are increasingly comfortable awarding punitive damages in commercial IP disputes, especially when good-faith warnings are ignored.
2. Strong Protection for Well-Known Foreign Trademarks
BMW’s trademarks are recognized as "驰名商标" (chímíng shāngbiāo, well-known marks) in China. The court extended broader protection beyond the identical class of goods and services, reflecting international best practices and China’s judicial commitment to honoring the reputational value of global brands.
3. Balanced Evidentiary Standards
Acknowledging the difficulty rights holders face in proving damages, the court accepted reasonable inferences and estimates based on available business data and market visibility, providing a workable path for plaintiffs even when precise revenue figures are unavailable.
Broader Implications
This case sets a powerful precedent for both domestic and foreign brand owners:
For foreign IP holders, it affirms that China’s legal system will actively protect reputable brands and penalize bad-faith imitation, even when the imitator holds business registrations or local popularity.
For Chinese businesses, it sends a clear message that borrowing equity from famous names or logos (regardless of linguistic creativity or logo tweaks) can have serious legal and financial consequences.
The ruling also reflects China's evolving IP climate, where commercial fairness, brand authenticity, and consumer trust are integral to a healthy market. It aligns with the goals of high-level judicial interpretations on punitive damages and with China’s broader efforts to create an IP-friendly and internationally trusted business environment.
Key Takeaways for Rights Holders
Act early: Send cease-and-desist letters and gather public evidence (e.g., screenshots, invoices).
Monitor online and offline use: Track business directories, social media, and e-commerce platforms.
Record well-known trademarks: Seek formal recognition and proactive enforcement strategies.
Consider civil litigation: Especially when administrative remedies fail or infringement is persistent.
If your company is facing trademark misappropriation in China or needs guidance on rights enforcement and litigation, Allasya Law & IP offers international-caliber support across all stages of IP protection, from brand audits to cross-border disputes.
Cover photo by Artiom Vallat on Unsplash