First Trademark Infringement Case Relating
to A Well-Known American Trademark but Unregistered in China

In February 2006, the Beijing No. 2 Intermediate People's Court accepted a well-known trademark infringement case filed by American Auto Accessories Incorporation (AAAI) against Beijing San Ai Rui Xing Auto Parts Co., Ltd. (San Ai). The case was the first case over trademark infringement dispute in which the right owner claimed its right based on the well-known U.S. trademark not registered in China.

AAAI, the plaintiff, claimed that it registered the trademark "3ARACING" in the United States and that the mark is regarded as a well-known trademark there. Although the mark has not been registered in China, it has obtained a high reputation among Chinese consumers, especially automobile consumers.

According to the plaintiff, AAAI authorized the defendant, San Ai, to use the mark on June 10, 1999, but withdrew the authorization on September 1, 2003. However, San Ai continued to use the mark after that and it even authorized other manufacturers to produce auto accessories bearing the mark "3ARACING". These accessories were sold in supermarkets, shops and markets. AAAI found that the accessories have serious quality problems, and argued that, as a result, its business reputation and profits had been damaged.

In addition, AAAI found that San Ai was using the "3ARACING" trademark on its website to promote its own auto products. AAAI was in the opinion that this has misled consumers to believe that San Ai, or its products, was in some way related to AAAI. This also caused great damages to AAAI's business reputation.

Based on the above reasons, the plaintiff AAAI requested the court to recognize "3ARACING" as a well-known trademark in China, and to order the defendant to stop infringing activities and compensate for damages and reasonable cost of the action summed up to one million RMB (approximately US$ 122,000).