Ford successfully obtained injunction order in China in landmark case

A stock of automobile parts and accessories bearing Ford’s marks FOMOCO and    was seized by Shanghai Customs in 2016 when they were exported by a local company to Turkey. Ford China confirmed that the seized goods were counterfeit. Further, the infringer had been penalised by the SAIC for trademark infringement before. The infringer denied that the goods were counterfeit, argued that they originated from Ford China’s local licensee and submitted the relevant sale contracts to Customs. However, Ford China’s local licensee denied the infringer’s assertion. Customs was unsure whether the seized goods were counterfeit and suggested that Ford obtain an order from the court by the seizure deadline so that it could continue to hold the goods.

Injunction order

Ford filed a fresh action for trademark infringement as well as an application for an evidence preservation order. To expedite the process, Ford authorised Ford China to file the action on its behalf so as to avoid the need to submit notarised and legalised formality documents, which would cause a procedural delay.

To support the application for an evidence preservation order, Ford China prepared a verification report, confirming that the seized goods were counterfeit. The Shanghai Pudong New Area People’s Court then granted the order, which allowed Customs to continue to detain the goods in question. The export was thus prevented.

Favourable court decision

The court handed down a favourable judgment, which held that:

• the use of the marks  and FOMOCO by the infringer on automobile parts and accessories products constituted trademark infringement;
• the evidence provided by the infringer was insufficient to prove that the seized goods were genuine;
• the infringer was ordered to cease using Ford’s registered marks and remove them from the seized goods; and
• the infringer was ordered to pay damages to Ford China for the economic loss caused and the reasonable legal costs incurred.

Comment

Injunctions used to be difficult to obtain, but now courts are more willing to grant them. Brand owners should consider lodging a trademark infringement lawsuit in addition to an application for an injunction and seeking an order for evidence preservation during the lawsuit.