First Case Under New Judicial Interpretation on Punitive Damages Decided: Shantou Court Rules on Trademark Infringement After Settlement

WISECODE Take

Many business owners mistakenly believe that a settlement is a free pass for trademark infringement. However, in the marketplace, repeating the same offense leads to severe penalties. This resembles sports: a player gets a yellow card for a first offense, but a deliberate second offense results in a red card. In the Shantou Court's final judgment on June 15, 2026, the defendant resumed selling infringing underwear worth 995,000 RMB after a 40,000 RMB settlement. The court applied Article 6 of Interpretation No. 7 (2026) to rule it as willful infringement. The final damages of 403,000 RMB warn businesses that punitive damages greatly raise the cost of repeated offenses. We advise businesses to immediately remove infringing goods after a settlement and monitor competitors regularly. Respecting the rules is the only shortcut to longevity. Zhidian provides trademark monitoring services to help protect your brand; please consult professionals for specific legal assessments.