In a decisive legal finding, LingLanHua Department Store – based in the city of Xi'an, capital of Northwest China's Shaanxi province – has been ordered to pay nearly 10 million yuan ($1.38 million) in damages for infringing on the DiSu clothing brand's trademark rights.

An appellate court in East China's Shanghai found LingLanHua guilty of using the "DiSu" name and derivatives in its online Taobao store, QiRongJia High-end Women's Fashion, leading to charges of unfair competition and a trademark infringement.

The plaintiff DiSu, which specializes in upscale women's fashion, argued that LingLanHua, operated by businessmen Bao Changyong and He Caixia, had engaged in long-term and malicious infringements.

The court's investigation confirmed that LingLanHua profited substantially from selling counterfeit DiSu products. This led to a ruling for punitive damages based on an economic loss of 4.9 million yuan, with double the compensation standard applied, thereby setting the total compensation at 9.8 million yuan.

An additional 150,000 yuan was awarded for legal and other reasonable costs.

Both parties appealed an initial lower court decision, but the appellate court upheld the original findings, affirming the need for strict penalties in trademark infringement cases to protect intellectual property rights in the competitive fashion industry.