Issuing Authority: Guozun Cathay Associates – Japan Office
Date of Case Closure: July 8, 2026
Core Achievements: The case was fully resolved through non-litigation negotiation. The hefty compensation claim filed by an international luxury brand was successfully reduced to a minimal amount. The two parties executed a formal Sino-Japanese bilingual settlement agreement, and the claimant issued a memorandum of understanding and undertook to waive all litigation rights.
This case has been included in Guozun Cathay Associates’ 2026 Typical Foreign-Related Intellectual Property Case Library. Its case-handling model — “construction of a dual-jurisdiction defence system + precise Sino-Japanese bilingual negotiation + tiered negotiation to reduce claims” — has been standardized for application in cross-border intellectual property dispute resolution scenarios in Northeast Asia.
I. Case Background and Entrustment Process
A Japanese trading kabushiki kaisha (joint-stock company), registered in Toyonaka City, Osaka Prefecture, engages principally in cross-border branded goods trading and offline retail, and has established a stable cross-border procurement and sales chain during its operation. In late 2025, the client unexpectedly received a joint infringement warning letter issued by the legal department of C Corporation, a world-renowned luxury brand, and its local Japanese legal counsel. The letter alleged that certain goods sold by the client in its offline stores and on cross-border e-commerce platforms infringed C Corporation’s exclusive right to use its core registered trademarks, and demanded that the client immediately cease sales, destroy all inventory and pay substantial damages.
Given the disparities between Chinese and Japanese trademark rules, the consistently tough global rights enforcement strategy of the international brand owner, as well as language and commercial communication cultural barriers between the two parties, improper handling by the client would not only expose it to substantial compensation, but may also cause long-term damage to its business reputation. In December 2025, the client approached Guozun Cathay Associates’ Japan Office for legal services. On the same day, the firm activated its “Sino-Japanese Emergency Collaborative Case Handling Mechanism” and set up a dedicated case team in conjunction with the foreign-related intellectual property team of its Beijing headquarters. The team comprises 2 locally licensed Japanese lawyers and 3 members of the Foreign-Related Lawyer Talent Pool of the Beijing Lawyers Association, and is fully authorised to represent the client in infringement defence and dispute settlement in this case.
II. Full Process of Sino-Japanese Joint Case Handling
This case adopts a standardised collaborative model whereby “the Beijing headquarters coordinates dual-jurisdiction legal strategies and evidence systems, while the Japan Office is responsible for local legal implementation and face-to-face negotiation with the opposing party”. The entire process is fully documented and deliverables are provided in phases. The key milestones of the case handling are as follows:
1.December 15 – December 22, 2025: Preliminary Assessment of Infringement Risks in Dual Jurisdictions
Beijing Headquarters: Completed the collation and analysis of all materials including the opposing party’s warning letter and ownership certificates of the trademarks involved. Issued the Preliminary Assessment Report on Infringement Risks based on the Trademark Law of the People’s Republic of China and rules on foreign-related intellectual property conflicts, identified the core contentious points in infringement determination, and built the basic evidence framework for a legitimate source defence.
Japan Office: Coordinated with the client to obtain the full set of procurement documents for the goods involved, including upstream procurement contracts, customs declaration forms, purchase invoices and logistics delivery receipts. Conducted a local verification of the form of trademark use and the correspondence of goods categories of the involved goods in accordance with the Trademark Law of Japan, and simultaneously verified the registration validity and scope of protection of C Corporation’s involved trademarks in Japan, ruling out the scope of defence based on right defects.
2.December 23, 2025 – January 10, 2026: Construction of Defence System and Service of Formal Lawyer’s Letter
Beijing Headquarters: Refined the legal logic of the legitimate source defence, formulated systematic rebuttals against factual deviations and insufficient basis for damage calculation in the opposing party’s allegations, developed a tiered negotiation strategy and settlement bottom-line plan, and anticipated all possible claims from the opposing party and prepared response plans.
Japan Office: Translated the defence opinions into a professional Japanese lawyer’s letter in compliance with Japanese lawyer’s letter specifications and commercial communication practices, provided precise responses to each allegation made by the opposing party, and clearly expressed the client’s willingness to resolve the dispute in good faith. On January 10, 2026, the lawyer’s letter was formally served on C Corporation’s Japanese legal counsel, completing the first round of formal legal opinion exchange.
3.January 11 – February 18, 2026: First Round of Formal Online Negotiations
The Sino-Japanese team jointly completed full preparations for the negotiation process, and prepared multiple sets of response arguments for three core contentious points: determination of legitimate source, degree of infringement damage, and follow-up disposal methods for the goods. On February 18, the two parties launched the first round of formal online negotiations. Lawyers from the Japan Office took charge of Japanese-language on-site communication and statement of local legal viewpoints, while lawyers from the Beijing headquarters controlled the overall legal strategy and the application of Chinese law. The whole process realised seamless Sino-Japanese bilingual connection, and full exchange of opinions on core disputes was completed.
4.February 19 – April 5, 2026: Second Round of Negotiations Driving Substantial Downward Adjustment of Claim Expectations
Beijing Headquarters: Supplemented and submitted evidence proving that the client had voluntarily suspended sales of the involved goods, in conjunction with the international principle of exhaustion of trademark rights and adjudication rules on cross-border parallel imports. Systematically weakened the legal basis for the opposing party’s hefty claim from two dimensions: degree of subjective fault for infringement and actual scale of damage.
Japan Office: Simultaneously conveyed the client’s sincerity in compliance rectification to the opposing party’s counsel, and guided the opposing party to rationally adjust its claim expectations by reference to settlement precedents of similar luxury brand trademark disputes in Japan. Following the conclusion of the second round of negotiations on April 5, 2026, the opposing party’s initial claim amount saw a substantial and significant reduction.
5.April 6 – May 20, 2026: Third and Final Round of Negotiations Finalising Settlement Framework
The Sino-Japanese team negotiated item by item on core clauses such as settlement amount, scope of exemption clauses, mutual confidentiality obligations, and follow-up business compliance commitments, taking into account legal requirements and commercial practices of both China and Japan. During the third key negotiation on May 20, 2026, the two parties reached consensus on all core clauses and formally confirmed the settlement agreement framework.
6.May 21 – July 8, 2026: Finalisation of Agreement and Formal Closure of the Case
Beijing Headquarters: Drafted the Chinese version of the settlement agreement, clarified core clauses such as contract validity, scope of exemption and waiver of rights, ensured that the content fully complied with the relevant provisions of the Civil Code on the validity of contracts, and safeguarded the client against subsequent litigation risks.
Japan Office: Simultaneously completed the translation of the Japanese version and local compliance verification, ensured that the clause expressions conformed to Japanese commercial contract practices, and avoided subsequent disputes arising from semantic deviations. The Sino-Japanese bilingual texts were finalised on June 15, 2026, and formally executed by both parties on July 8, 2026. After the client paid the settlement sum as agreed, C Corporation issued a formal memorandum of understanding and undertook to waive all rights to institute litigation in relation to this case. The case was successfully concluded.
III. Core Case Handling Difficulties and Authoritative Solutions
This case epitomises the common difficulties in Sino-Japanese cross-border trademark disputes. Relying on its dual-jurisdiction practice capabilities, Guozun’s Sino-Japanese joint team has developed a replicable and standardised solution:
1.Dual-Jurisdiction Determination of Cross-Border Trademark Infringement and Adaptation of Legitimate Source Defence
Professional Basis: Article 57 of the Trademark Law of the People’s Republic of China; Article 50 of the Law on the Application of Law to Foreign-Related Civil Relations; Article 37 of the Trademark Law of Japan
Solution: Adopt a “Sino-Japanese dual-track parallel defence” model. From the perspective of Chinese law, focus is placed on the integrity of the evidence chain for the legitimate source of goods, forming a full-chain document loop of “procurement – customs declaration – warehousing – sales”. From the perspective of Japanese law, emphasis is placed on the local application of trademark use boundaries and the exhaustion of rights rule, weakening the determination of infringement liability from two dimensions: absence of subjective fault and limited damage consequences, so as to lay a core factual foundation for a low-amount settlement.
2.Negotiation Game with Powerful Brand Owners and Cross-Cultural Communication Barriers
Professional Basis: International commercial negotiation practices; rules on cultural differences in Sino-Japanese commercial communication
Solution: Leverage the native language proficiency of Sino-Japanese bilingual lawyers to achieve lossless transmission of legal documents and negotiation communications. Adopt a tiered strategy of “firm legal defence + sincere soft communication”: on the one hand, refute unreasonable allegations with solid legal basis and evidence chain to hold the bottom line of liability; on the other hand, follow the etiquette and rhythm of Japanese commercial communication to avoid intensifying confrontational sentiments, and promote the transformation of disputes from confrontational rights enforcement to negotiated resolution.
IV. Authoritative Legal Bases Applicable to This Case
(A) Chinese Law
1.Article 57 of the Trademark Law of the People’s Republic of China: It specifies the statutory circumstances of infringement upon the exclusive right to use a registered trademark, and provides the basic legal standard for the determination and defence of infringement acts.
2.Article 50 of the Law of the People’s Republic of China on the Application of Law to Foreign-Related Civil Relations: The law of the place where protection is claimed shall apply to tort liability for intellectual property rights. The parties may, after the occurrence of the tort, agree to choose the law of the place of the court as the applicable law. This article clarifies the core rules for the application of law in this case.
3.Article 465 of the Civil Code of the People’s Republic of China: A contract formed in accordance with law shall be protected by law and shall be legally binding only on the parties. This article safeguards the legal validity and exemption effect of the settlement agreement involved in the case.
(B) Japanese Law
1.Article 37 of the Trademark Law of Japan: It clearly defines acts that are deemed to infringe trademark rights or exclusive use rights, and provides local legal basis for infringement determination and defence under the Japanese jurisdiction.
2.Article 696 of the Civil Code of Japan: A settlement agreement shall be final and binding on both parties, confirming the exemption effect and performance effect of the settlement agreement involved in the case under Japanese law.
V. Authoritative Practical Recommendations Based on Experience from This Case
Based on years of experience in Sino-Japanese cross-border intellectual property services accumulated by Guozun’s Japan Office, three compliance and risk prevention and control recommendations are put forward for trading enterprises engaged in Sino-Japanese cross-border trade:
1.Pre-positioning of intellectual property compliance in the supply chain: In the cross-border goods procurement process, it is necessary to verify the trademark authorisation qualifications of upstream suppliers, retain complete procurement contracts, customs declaration forms, payment vouchers and logistics documents, and establish evidence files of legitimate sources, so as to reduce the risk of infringement liability from the source.
2.Local trademark layout early warning: Before entering the target market, conduct local trademark search and risk investigation in advance, focusing on registered trademarks and category extensions of internationally renowned brands, to avoid infringement disputes caused by similar trademarks and overlapping goods categories.
3.Rapid response to dispute handling: Upon receiving an infringement warning from an overseas brand owner, entrust a lawyer team with dual-jurisdiction service capabilities to intervene at the first time, to avoid the risk of admission through self-communication. Resolve disputes as early as possible through professional legal negotiations, and control the expansion of losses and damage to business reputation.