Case Handled by Mr. Xiaoning LI, a Lawyer of Shenzhen Offices, is Selected as a Typical Case by Guangdong Court to Promote Core Socialist Values

A dispute case of intellectual property contract between Cai and a jewelry company dealt by Mr. Xiaoning Li, a lawyer from Shenzhen Offices, is selected as a typical case for the promotion of “justify and rule of law, honesty and trustworthiness”.

In this case, the plaintiff Cai are twin brothers with Zhang who was the former legal representative and controlling shareholder of the jewelry company. After the shares of the jewelry company were delivered to the current shareholder from Cai’s brother, Cai sued the jewelry company for breaching the Settlement Agreement signed by Zhang on behalf of the jewelry company with him. Cai stated his requests to the court that the jewelry company shall immediately revoke their authorization of jewelry stores and pay a liquidated damages of RMB 1 million. The Agreement stipulates that Cai can open 80 jewelry stores in the name of “Zhou baifu” free of charge, and will not be interfered and managed by the jewelry company; the jewelry company shall not open by its own or authorize others to open any relevant store within 15 kilometers of Cai’s affiliated stores. The liquidated damages shall be RMB 1 million each time for the breach, and the Agreement was stamped with a non-filing seal of the jewelry company.

The jewelry company lost the lawsuit in the first instance and entrusted Mr. Xiaoning LI to represent it in the second instance. After Li’s join, he skillfully applied the theoretical knowledge of trademark law, contract law, company law and civil procedure law, formulated accurate litigation strategies, and collected a large amount of evidences, which successfully prompted the Guangdong High Court to determine that there are substantial doubts about the Settlement Agreement and its authenticity can not be confirmed. Even if the Settlement Agreement is real, as the legal representative and controlling shareholder of the jewelry company, Zhang ignored the independent personality of the jewelry company, violated the principle of good faith, took advantage of the convenience of controlling the company’s non-filing seal, maliciously colluded with Cai who has a sibling relationship with him, illegally occupied the trademark rights of the jewelry company, robbed the company’s intellectual property rights, hampered the normal operation of the company, improperly reduced the property belonging to the company, which not only violated his duty of loyalty to the company, but also seriously damaged the interest of other shareholders and debtors of the company, so that the Settlement Agreement shall be invalid for its malicious collusion that violates the legitimate rights and interests of the creditors, which shall be invalid. For this reason, the Guangdong High Court finally revoked the judgments in first instance and rejected all claims of Cai.

The Guangdong High Court held that the significance of this case lays in that the “freedom of contract” shall be limited in the scope of laws, rather than a kind of unrestricted absolute freedom. All acts that seriously damage the legitimate rights and interests of others in the name of exercising freedom and rights cannot be supported and protected by laws. This case was legally recognized by the court as damaging the legitimate rights and interests of the trademark obligee through malicious collusion. And this case can fully play the guiding role of judicial, strengthen rule-consciousness in commercial matters, lead the public especially the senior executives of companies to exercise normative powers and freedoms, and fully interpret the core socialist values of good faith, freedom, justice and the rule of law.