Copying Casio Watches Results in RMB 3 Million Damages: Expiration of Design Patent Does Not Entail Free Replication

Recently, the Guangdong High People's Court concluded a trade dress infringement case filed by Casio Computer Co., Ltd. of Japan. The court upheld the first-instance judgment, ordering Shenzhen Tesomething Clock Co., Ltd. ("Tesomething") and Guangzhou Mouyuan Watch Co., Ltd. ("Mouyuan") to immediately cease the use of any trade dress that is identical or similar to that of Casio's GA110 watch, and to pay joint compensation of RMB 3 million (including economic losses and reasonable expenses) to Casio.

Casio's GA110 series watches have been sold globally since 2010. Their most iconic feature is the dial design: a large case, protruding function buttons, a Y-shaped structure dividing the main dial into three sections, a steam-pressure-gauge-like sub-dial, a dual-layer time display, and six other distinctive elements that are highly recognizable among consumers. This design was once protected by a design patent, which expired in November 2019.

Soon after the patent expiration, Mouyuan and Tesomething began manufacturing and selling watches under the "TASGO/Tesomething" brand. Casio collected evidence showing that, apart from the trademark and color, the defendant's products were visually nearly identical to the GA110 watch in overall trade dress. The defendants themselves admitted to creating "1:1 copies." These accused products were widely sold on platforms such as Tmall, Pinduoduo, and 1688, with certain listings showing sales volumes in the tens of thousands.

Casio then filed a lawsuit with the Shenzhen Intermediate People's Court, alleging unauthorized use of a trade dress that is identical or similar to that of a well-known product, and sought an injunction and RMB 5 million in damages. The first-instance court found that the defendants' conduct constituted unfair competition, ordered them to cease infringement, and awarded RMB 3 million in damages. Both parties appealed to the Guangdong High People's Court.

The central legal issue in the second instance was: after a design has fallen into the public domain, can the right holder still seek protection under the Anti-Unfair Competition Law?

Tesomething argued that after the expiration of a design patent, the design should be freely usable by the public, and no one should be allowed to monopolize it in any form. Casio's attempt to use the Anti-Unfair Competition Law to extend the patent term, in their view, contradicted the spirit of intellectual property legislation. The defendants also argued that because many watches identical or similar to the GA110 trade dress had appeared on the market, that trade dress had lost its source-identifying function, and the public would not mistake Tesomething's watches for Casio products.

Casio countered that the termination of a patent right merely means that the technical solution or design is no longer exclusively protected. However, the goodwill accumulated through long-term use and promotion can still be protected under the Anti-Unfair Competition Law as "well-known trade dress." The defendants' "1:1 copying" was essentially free-riding on Casio's goodwill and creating consumer confusion, which should be prohibited.

The Guangdong High People's Court fully supported Casio's position. The court stated that the same subject matter may be the object of multiple types of intellectual property protection. After a design patent expires, the design does enter the public domain, and anyone is free to "use" it. However, "free use" is not without limits; it must not conflict with preexisting legitimate rights or interests of others. If such use would cause relevant consumers to be confused or mistaken about the source of the goods, it constitutes unfair competition. Therefore, the defendants' argument that the patent expiration alone precludes infringement was rejected.

On this basis, the court found that the trade dress of Casio's GA110 watch qualifies as "well-known trade dress." Casio submitted evidence showing that from 2016 to 2020 alone, sales revenue of the GA110 series in mainland China exceeded RMB 600 million, with cumulative advertising and promotional expenses exceeding RMB 50 million during the same period. Extensive media coverage, online reviews, and celebrity endorsements further strengthened its market influence. The nine design elements in question are not functionally necessary for a watch, nor are they common designs in the industry; instead, they are distinctive, decorative features. By using a trade dress visually nearly identical to Casio's on identical goods—even with different trademarks, prices, and consumer groups—the defendants were highly likely to cause relevant consumers to believe that the accused products had a particular connection with Casio, such as licensing or sponsorship. The court ultimately affirmed the first-instance judgment.

This case makes clear that the expiration of a design patent does not reduce the commercial value of that design to zero. If, through long-term, genuine, and extensive use, the right holder has endowed the design with a "secondary meaning" that distinguishes the source of the goods, thereby generating protectable goodwill, then Article 7 of the Anti-Unfair Competition Law can still provide supplementary protection for such "well-known trade dress."