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Chinese Counterfeiter|Must Pay $7.5 Million

LAS VEGAS (CN) - A Chinese company must pay $7.5 million for counterfeiting and trademark infringement during the 2013 National Hardware Show in Las Vegas, a federal judge ruled.

U.S. District Judge Andrew Gordon on Monday ordered Xiamen Hwaart Composite Material and co-defendants Jimmy Chen and Tina Wu to pay $7 million in statutory damages for willful counterfeiting and $100,000 for willful trademark infringement for counterfeiting California-based Bond Manufacturing's products and trademarks.

The defendants also must pay 5.25 percent interest, $357,559.90 in attorney's fees and $8,208.89 in costs, Gordon ordered.

The judgment arises from a federal complaint Bond Manufacturing filed on the second day of the National Hardware Show on May 8, 2013.

In its complaint, Bond described itself as a "well-established, family-owned and operated" lawn, garden and hardware business that provides goods for 650 customers, including Wal-Mart, Sears, Lowes, Home Depot, Menard's and other large retailers.

Bond claimed that while setting up its exhibit for the annual tradeshow, its president Cam Jenkins discovered the exhibit for Xiamen Hwaart Composite Material had several pallets containing large boxes bearing the Bond logo and the marks of several licensed subsidiaries.

Bond previously did business with the Chinese firm but said it ended the business relationship in 2012 after learning Xiamen tried to "circumvent Bond to sell our products directly" to Lowes in violation of their business agreement.

The boxes bearing Bond's mark at the 2013 tradeshow "were clearly labeled with descriptions and pictures of products" bearing Bond's various trademarks and Bond item and SKU numbers, according the lawsuit.

"These products are unauthorized, and appear to be exact knock-offs of Bond products in every detail, because they were unlawfully made by Bond's former manufacturer to Bond's specific, proprietary designs," the complaint said.

Bond said Xiamen also displayed large print photos of products that were taken in the back yard of the home belonging to the chairman of Bond's board of directors and were used in the company's packaging and marketing materials.

It claimed that Xiamen copied its "distinctive and ubiquitous red color and fire flame design" in the Chinese company's exhibit, including the catalogue, marketing materials and trade dress.

"But for the fact that letters on their signage are different, a person passing by would likely mistake them for us, as the product is an exact copy of our product, the marketing materials are actual photos of our product, and the booth design slavishly copies our color scheme and trade dress," Bond said in the complaint.

Bond said Xiamen "was attempting to palm off their products as Bond-authorized products" and that "each and every item on display" in the Chinese company's booth was a copy of Bond products appearing it its 2013 "Outdoor Heating" product catalogue.

Bond sought damages and punitive damages for trademark infringement and unfair competition.

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