Levi's Franchisee Compensates to Rightholder for Selling Counterfeit Goods

On June 20, the Shanghai 1st Intermediate People's Court ruled that Shanghai Beizi Clothing Company, who sold counterfeit Levi's clothes in discount stores, should stop the infringement, publish a statement in newspapers to eliminate ill effects, and compensate RMB 100,000 yuan to American Levi Strauss & Co.

Levi Strauss & Co is the owner of the trademark "Levi's" which has also been registered in China. Shanghai Beizi Clothing Company is one of the franchisees authorized to sell Levi's clothes in China. However, the defendant purchased counterfeit Levi's jeans and T-shirts from Guangzhou and sold the counterfeit goods in its discount stores.

In March 2006, when inspecting the discount stores, the Minxing Administration for Industry and Commerce seized 183 pairs of jeans and 52 T-shirts that bore the counterfeit trademark representation of "Levi's," involving an illegal business turnover of RMB 70,000 yuan. Later Levi Strauss & Co. confirmed that the above goods were counterfeit commodities.

In May 2006, the Minxing AIC made a decision of administrative punishment. The Minxing AIC ordered Beizi Company to immediately stop the act of infringement, confiscated and destroyed the counterfeit goods and fined the infringer of RMB 150,000 yuan.

Since Beizi Company sold the counterfeit clothes along with the genuine ones, in February 2007, Levi Strauss & Co. instituted a proceeding before the Shanghai 1st Intermediate People's Court against Shanghai Beizi Clothing Company for trademark infringement.