12.2 Million RMB Awarded! Punitive Damages Applied to Infringement of Unregistered Well-Known Trademark in Storage Chip Case

WISECODE Take

Many business owners mistakenly believe that trademarks cannot be enforced without local registration, which is a major blind spot in practice. In this Chinese semiconductor ruling, the defendant was ordered to pay 12.2 million RMB in punitive damages for infringing the plaintiff's unregistered well-known trademark in the storage chip sector. This confirms that even in jurisdictions practicing the first-to-file system, malicious copycats will face heavy financial penalties if the brand has established sufficient market influence. While this provides stronger protection for established chip makers, companies without substantial brand recognition will not benefit from this mechanism. This case highlights that enterprises should utilize trademark portfolio health checks to complete registrations before product launch, rather than relying on the costly process of proving well-known status afterward. To address this trend, businesses can take two actions. First, prioritize core trademark registrations before entering new markets to avoid the massive costs of proving well-known status later; second, systematically collect sales data and exhibition records if highly similar competing products emerge, ensuring evidence is ready for future enforcement. The cost of preventive trademark registration is far lower than the litigation expenses required to prove brand recognition after the fact.