CHINA'S TOP 20 TRADEMARK CASES IN 2017
CIVIL CASE
CASE 1 : DAOHUAXIANG TRADEMARK INFRINGEMENT
Trial Docket: (2014) MingMinZhongZi No. 1442
Appellate Docket: (2016) ZuiGaoFaMinZai No. 374
City of Beijing
[Headnotes]
The Court held where a generic name is prescribed by statute, or provided by national standard or industry standard should be recognized as such. Moreover, it is provided in the Provisions of Breed Approval, Article 32(2), "A breed name as published in the Approval Publication shall be the generic name. It shall be prohibited to voluntarily alter the generic name in the process of production, management and promotion."
[Synopsis]
Plaintiff: Fuzhou Rice Factory
Defendant: Jinfutai Agriculture Co., Ltd. of Wu Chang City, Jinshan Dajingcheng Branch in Fuzhou of Fujian Xinhuadu Comprehensive Department Store and Fujian Xinhuadu Comprehensive Department Store
Fuzhou Rice Factory is the registrant of trademark Reg. No. 1,298,959 for DAOHUAXIANG (the mark at issue, "Rice Flower Flagrance"), which was filed in March, 1998, and was approved on July 28, 1999 for rice in class 30. On March 18, 2009, it was documented in the Book of Agricultural Breed Approval in Heilongjiang Province issued by Heilongjiang Agricultural Breed Approval Committee that: Breed WuYouDao IV, originally DaoHuaXiang II, with promotional region in transplant seedling cultivation in self-irrigational areas, has been approved, upon regional and production experimentation to qualify as outstanding breed, for promotional breeding beginning inn 2009. On February 18, 2014, Fuzhou Rice Factory made a notarized purchase in Fujian Xinhuadu Comprehensive Department Store, Jinshan Dajingcheng Branch in Fuzhou ("Dajingcheng Branch") of a bag of "Qiaojiao Dayuan Daohuaxiang Rice" made and soled by Jinfutai Agriculture Co., Ltd. of Wu Chang City (the "Wu Chang Company"). Printed in the front center of the rice bag was "DAOHUAXIANG" in large fonts (hollow in black background). Fuzhou Rice Factory filed suit against Wu Chang Company and Dajingcheng Branch for trademark infringement by making and selling the infringing products. The trial court held that DAOHUAXIANG was not a generic name, and Wu Chang Company, without permission, used a mark very close to the registered mark at issue, which was likely to cause confusion among consumers, and therefore infringed the mark at issue.The court found infringement against Wu Chang Company, Dajingcheng Branch, and its mother company Xinhuadu Department Store. On appeal, the court reversed by finding that "Daohuaxiang" was a generic name by custom for the rice grown in the particular geographic environment of Wu Chang City. Wu Chang Company used "Daohuaxiang" in the packaging of its rice product in word and spelling to indicate origin, with good intention and caused no confusion, and should be considered as fair use; the court reversed, and dismissed all complaints by Fuzhou Rice Factory. Dissatisfied, the Factory requested reexamination with the Supreme People's Court. The Court granted certiorari and found Wu Chang Company offered no evidence to prove that "Daohuaxiang" was a statutory generic name; the generic name under the provisions for Agricultural Breed Approval did not coincide with the trademark definition of generic names.The Approval Publication indicated an original code of "Daohuaxiang II" rather than "Daohuaxiang"; use of "Daohuaxiang" as a generic name would be impossible when a prior mark had been registered. The Supreme People's Court cancelled the appellate decision and reinstated the trial court decision.
[Judge's Comment]
This case relates to the exclusive right under registered trademark and breed name, and the standard for determining generic names. What was involved in this case was "Daohuaxiang II," an outstanding rice breed from a major rice producing region in Wu Chang of Heilongjiang Province. The case attracted wide attention in the industry, and the outcome would directly affect the daily business and market order for "Daohuaxiang II." The Supreme People's Court, by interpreting certain important legal issues involved in the Trademark Law, such as standard for determining statutory generic names and customary generic names, as well as distinction and relation between exclusive rights under registered trademarks and breed names, and by streamlining the judicial standards to be applied in such cases, well balanced the interests of trademark registrants and breed name owners, so as to preserve the orderly market competition while providing ample protection of trademarks.
CASE 2 : LAOGANMA TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION
Trial Docket: (2015) JingZhiMinChuZi No. 1944
Appellate Docket: (2017) JingMinZhong No. 28
City of Beijing
[Headnotes]
The Trademark Law of China, Article 13(2) provides, "A trademark application for registration for use in connection with unidentical or dissimilar goods which is a reproduction, imitation or translation of another's well known mark already registered in China and likely to mislead the public to the detriment of interests of the registrant of such well known marks shall be denied for registration and shall be enjoined from use." This provision provides better protection for well known marks than for ordinary registered marks, i.e., to prohibit another from reproduction, imitation or translation of well known marks in connection with unidentical or dissimilar goods.
[Synopsis]
Plaintiff (Appellee): Guiyang Nanming Laoganma Food Co., Ltd.(Guiyang Laoganma)
Defendant (Appellant): Guizhou Yonghong Food Co., Ltd. (Guizhou Yonghong)
Defendant Below: Beijing Auchan Retail Co. Ltd. (Beijing Auchan Retail)
Beijing Auchan Retail sells beef stick (the product at issue) manufactured by Guizhou Yonghong, which product carries its trademark "Bull Head Brand and Design" in the front of the product packaging, and also the indication of "Laoganma Flavor" in the middle in the front, and "Laoganma Flavored Beef Stick" in the back. Guiyang Laoganma asserted that its trademark "老干妈" (Laoganma) under Reg. No. 2021191 for fermented black beans, pepper paste (flavoriong), and pepper oil, etc. in class 30 is a well known mark, and Guizhou Yonghong by engaging in activities using the mark on its product at issue, has caused injuries to Guiyang Laoganma's exclusive rights for trademark registration, and constituted unfair competition.Beijing Auchan's sales activities also constituted infringement.
The trial court found the trademark at issue has acquired the status of well known mark from the evidence proffered by Guiyang Laoganma at trial. Guizhou Yonghong used the mark at issue as a series name for the products at issue, which is likely to cause mistake among consumers that their products are somewhat related to Guiyang Laoganma, thereby diluting the strength of the mark at issue. Since Guiyang Laoganma and Guizhou Yonghong are not competing businesses on the market, the relevant provisions of the Anti Unfair Competition Law do not apply, and no unfair competition could be established. The trial court enjoined Guizhou Yonghong from using "Laoganma Flavor" on the beef stick products it makes and sells, and Beijing Auchan from retailing beef sticks with "Laoganma Flavor," ordering payment of damages and reasonable fees in the amount of 426,000 yuan, from which Guizhou Yonghong appealed.
The appeals court found that Guizhou Yonghong used the "Laoganma" mark on the products at issue and also on both sides of the packaging constituting reproduction and imitation of the mark at issue, which is in the sense of trademark use, serving to indicte source of products. True as the product at issue contains the "Laoganma" fermented black beans, but the beans are a non-staple diet for the food industry. Neither is "Laoganma Flavor" a customary term of product flavor for the business of daily food; such use of "Laoganma" on products at issue does not fall within the meaning of fair use. When Guizhou Yonghong used "Laoganma" on its product packaging, and used "Laoganma Flavor" parallel to "original flavor" and "peppered spice flavor," it is sufficient to cause the relevant sectors of the public to associate the product at issue with the mark at issue, thereby weaken the mark's association and connection with the fermented black beans, the pepper paste (flavoring), and pepper oil, diluting the strength of the mark with well known position, and constituting the circumstances of "misleading the public, and likely to cause injury to the registrant of such well known marks," as prescribed in Art. 13(3) of the Trademark Law.Guizhou Yonghong's arguments for its appeal are not supported by facts or by legal rational, and therefore must be dismissed, and the decision below must be affirmed.
[Judge's Comment]
Use of another's well known trademark by a business operator cannot be justified when it is used in prominent display in product packaging to describe a feature of the product, even if the intended goods under that well known mark are indeed used as an ingredient, suffice to say that such intended goods are not the staple material for the industry, and the mark is not a generic one for a product's feature; such use, moreover, being likely to dilute the strength of the well known mark for informing consumers of the source of particular goods, and eviscerate the distinctiveness of the mark, falls within what is prohibited by Article 13(3) of the Trademark Law as injury to the proper interest of the registrant of a well known mark.
CASE 3 : XINHUA ZIDIAN TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION
Trial Docket: (2016) Jing 73 MinChu No. 277
City of Beijing
[Headnotes]
The court found "Xinhua ZIDIAN" to be an unregistered well known mark taking various factors ranging from the degree of being well known in the relevant sectors of the public, time period of continued use of "Xinhua ZIDIAN," sales figures, scope of advertisement, and records of protection, etc.
[Synopsis]
Plaintiff: The Commercial Press Co.Ltd. (CP)
Defendant: Sinolingua Corporation (Sinolingua)
The Commercial Press (CP) and Sinolingua are both publishing entities. CP has, since 1957, published Xinhua Dictionary the popular version for 11 editions. The Xinhua Dictionary published by CP has an average market share of more than 50% between 2010 and 2015. Up to 2016, the CP Xinhua Dictionary has been sold in over 567 million copies, receiving multiple honors including setting Guinness World Record for "most popular dictionary" and "bestselling book (regularly-updated)".
CP complains that the dictionary published by Sinolingua under "Xinhua ZIDIAN" infringed the unregistered well known trademark "Xinhua ZIDIAN" of CP, and engaged in unfair competition by appropriating the unique trade dress of Xinhua Dictionary (11th Ed.) of CP. A court order is sought for an injunction to immediately enjoin Sinolingua from trademark infringement and unfair competition activities, for publication of statement in China Press and Publishing Journal or other relevant media to eliminate influence, and payment of damages to CP in the amount of 3 million yuan plus 400 thousand for reasonable expenses.
In counterargument, Sinolingua contended "Xinhua ZIDIAN" was the title of a national project that developed into a type of dictionaries in the public domain for which CP had no right to claim exclusive trademark right, and preclude others from properly adopting it. That the business get-up of Xinhua Dictionary (11th Ed.) at issue, does not constitute "unique trade dress" under Article 5(2) of Anti-Unfair Competition Law, and is not likely to cause confusion or mistake to purchasers. That CP harbors an improper intention of restraining competition and monopolizing dictionary market, by means of judicial litigation, to exclusively appropriate the generic name of "Xinhua ZIDIAN."
The trial court found that "Xinhua ZIDIAN" has acquired distinctiveness for trademark which, through CP's use, has become a well known mark, qualifying for unregistered well known trademark, which, when reproduced or imitated by Sinolingua, is likely to cause mistake, therefore constituting trademark infringement.The business get-up of CP's Xinhua ZIDIAN (11th Ed.) is the unique trade dress of well known commodity, and Sinoligua's unauthorized use of the unique trade dress of well known commodity is an act of unfair competition. The court held that Sinolingua is hereby enjoined from trademark infringement and unfair competition activities, that statement be published in China Press and Publishing Journal or other media to eliminate influences, and awarded damages of 3 million to CP plus reasonable expenses of 270 thousand.
After judgment was rendered from trial court, the parties reached settlement agreement. The judgment became effective.
[Judge's Comment]
This is a typical case for protection of unregistered well known trademark involving hard issues of fact-finding, applicability of the laws and balancing of interests. (1) This case clarified the adjudicatory standard for determining trademark distinctiveness of a name serving for product name and trademark in certain commodities that due to historical reasons carried combined features of both functions. (2) The court found "Xinhua ZIDIAN" to be an unregistered well known mark taking various factors ranging from the degree of being well known in the relevant sectors of the public, time period of continued use of "Xinhua Dictionary," sales figures, scope of advertisement, and records of protection, etc. (3) In this case, while the unregistered well known mark "Xinhua ZIDIAN" is protected, emphasis is placed on balancing of regular market orders and promotion proper dissemination of cultural knowledge, by pointing out that the protection afforded under the Trademark Law is towards the trademark itself rather than the commodities carrying the mark; by affording exclusive trademark right for "Xinhua ZIDIAN" to CP does not result in exclusive control of publishing dictionaries, and will not lead to monopoly in dictionary market. (4) This case, by affording trademark protection, will prompt trademark proprietors to more faithfully assume their legally imposed obligations for product warranty and social responsibilities for disseminating Chinese language knowledge, to better promote the progress of China's market economy and cultural industry. (5) In this case, the court awarded damages for liabilities resulting from infringement of ab unregistered well known trademark, a breakthrough in imposing liabilities for remedies provided for in the Trademark Law for registered trademarks, having a great significance for enhancing protection of intellectual properties in the new era.
CASE 4 : KIMBERLY-CLARK WORLDWIDE., INC. TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION
Trial Docket: (2014) Yi Zhong Min Chu Zi No. 1704
City of Beijing
[Headnotes]
If a company registers its company name in Hong Kong which contains a registered trademark in mainland China of a third party as its trade name, but the use of company name in mainland China would mislead the public, both the company itself and the manufacturer of the products bearing the company name constitute unfair competition.
Considering factors such as the popularity of plaintiff's trademark and product, the duration and scale of the infringement, the maliciousness of imitating, the defendant's rejection to provide financial books and materials related to the infringement and so on, the court decides the amount of compensation at its discretion and wholly supports the plaintiff's claim for compensation of four million Yuan.
[Synopsis]
Plaintiff: Kimberly-Clark Worldwide. Inc.
Defendants: Hunan Sophie Sanitary Products Co., Ltd and Korea Haoqi Children Products Co., Ltd.
Kimberly-Clark Worldwide., Inc. was founded in the United States in 1872, who is the exclusive owner of the trademark no. 619312 "好奇", the trademark no. 619311 "HAOQI", the trademark no. 602376 "HUGGIES" and etc. The aforementioned trademarks are designated in the goods of "disposable baby pants, diaper" and other products. The infringing goods are manufactured and sold by Hunan Sophie Sanitary Products Co., Ltd, the packaging of which is marked with trademark "HAOQIHAODONG" and "好奇好动" and expressions of "韩国好奇儿童用品有限公司授权出品" (authorized by Korea Haoqi Children Products Co., Ltd.).
Kimberly-Clark Worldwide., Inc. claimed that Hunan Sophie Sanitary Products Co., Ltd (Hunan Sophie Company) and Korea Haoqi Children Products Co., Ltd (Korea Haoqi Company) had violated the exclusive right of registered trademarks and constituted unfair competition by using the same or similar trademark, trade name and product packaging as Kimberly-Clark Worldwide., Inc. requesting the court to order: 1. Hunan Sophie Company and Korea Haoqi Company immediately stop infringing trademark rights and unfair competition conduct. 2. Two defendants jointly compensate the plaintiff pecuniary loss of four million Yuan and reasonable cost of 109,925 Yuan. 3. Two defendants should publish a statement in China Intellectual Property Newspaper, Taobao and other websites, to eliminate the impact.
The court held that:
The accused conducts of defendant I- Hunan Sophie Company constitute trademark infringement and unfair competition. The defendant Hunan Sophie Company, without the authorization of plaintiff, manufactured and sold paper diapers bearing trademark "HAOQIHAODONG" and "好奇好动", which were similar to the plaintiff's registered trademarks such as "HAOQI" on like products, used company name "韩国好奇儿童用品有限公司授权出品" which contains the plaintiff's registered trademark "好奇", used packaging similar to plaintiff's specific packaging for its well-known products, used marks similar to plaintiff's registered trademarks such as "HAOQI" when advertising and promoting on Marco Polo official website. The aforementioned conducts of Hunan Sophie Company would cause confusion and misidentification about the source of the products among the relevant public, which constitute trademark infringement and unfair competition.
The accused conducts of defendant II- Korea Haoqi Company constitute trademark infringement and unfair competition. Although Korea Haoqi Company was registered in Hong Kong, it used plaintiff's registered trademark "HAOQI" in its company name and its actual use in mainland China is likely to cause confusion and misidentification among the relevant public, which has constituted unfair competition. In view that defendant II is the franchisor of infringement products, defendant I's conduct of manufacturing and selling products and using product's packaging can be treated as defendant II's. Therefore defendant I I also constitutes trademark infringement and unfair competition.
As for the liabilities of compensation, judge's comment:
When deciding the amount of compensation, the court synthetically considers factors such as fact, nature, impact scale, degree etc. of the infringement conduct of Hunan Sophie Company and Korea Haoqi Company. In view of the fact that the series trademark "HAOQI" and related products of the plaintiff have high popularity all over the world, Hunan Sophie Company and Korea Haoqi Company as business operators in the same industry should know it. Besides, Korea Haoqi Company has received a restraining order issued by the High Court of Hong Kong. Hunan Sophie Company has been punished by administrative departments of Commerce and Industry before. Even after being sued for trademark infringement and unfair competition by the plaintiff, the defendants still continue their infringements. Obviously, the two defendants have malicious intents in imitating plaintiff and make use of the high popularity of plaintiff. What' more, Hunan Sophie Company rejected to provide financial books and relevant materials after court required. So the court decides the amount of pecuniary loss referred to the plaintiff's claims. Concerning reasonable cost for stopping the infringement, court also supports.
The court judgment: (1) Hunan Sophie Company and Korea Haoqi Company shall immediately stop trademark infringement and unfair competition. (2) Hunan Sophie Company and Korea Haoqi Company shall jointly compensate Kimberly International Inc. pecuniary loss of four million Yuan and reasonable cost of 109,925 Yuan. (3) Two defendants shall publish a statement in official websites of Marco Polo, Taobao and Alibaba to eliminate the impact.
[Judge's Comment]
The typical point of this case is the court holds that the use of an extraterritorial company name in mainland China still constitutes unfair competition and wholly supports the high compensation claim of plaintiff.
The use of an extraterritorial company name in mainland China still subjects to Chinese law. The protection of intellectual property right is regional. Even though a company registered its name in Hong Kong, it still may constitute unfair competition according to Chinese Law if the company name is used in mainland China and causes confusion and misidentification among public. The extraterritorial company itself definitely constitutes unfair competi t ion. However, to decide whether a mainland company using an extraterritorial company name in the products it manufactured constitutes unfair competition or not, we can consider the relationship of mainland company and extraterritor ial company, and subjective fault of the mainland company. In this case, in view that Hunan Sophie Company is related to Korea Haoqi Company, and obvious bad faith of imitating is existed, so the use of company name "Korea Haoqi Children Products Co., Ltd" by Hunan Sophie Company shows its malicious intent to cause confusion in public. This conduct also constitutes unfair competition.
The court wholly supports the high compensation claim aiming at protecting well-known trademarks and products, as well as penalizing malicious infringement.Owners of intellectual property rights have been in troubles for years because of the low cost of infringement and the difficulties of protecting right. Recently, harsher punishment for infringement of intellectual property right has become the focus of intellectual property legislation, judicial and administrative work. In this case, the judges take account of not only the high popularity of plaintiff's trademark and products, but also the continuous infringement conducts and malicious intent of imitating, the rejection of offering financial books and relevant materials, etc. while deciding the pecuniary compensation of four million Yuan.
There are many similar mainland companies make use of extraterritorial companies to proceed infringement conduct secretly and imitating wellknown brands to mislead public in bad faith. While the intellectual property right is protected independently and regionally, such conduct shall not successfully exempt from domestic legal sanctions by wearing an appearance of legality. Increasing penalties of infringement conducts and manifesting the determination of intellectual property protection has become an inevitable choice of Chinese court.
CASE 5 : CONSEIL INTERPROFESSIONNEL DU VIN DE BORDEAUX TRADEMARK INFRINGEMENT
Trial Docket: (2016) Xiang 01 MinChu No. 1775
Hunan Province
[Headnotes]
This is the first civil case that the GI collective trademark "Bordeaux 波尔多" is granted judicial protection in China. It is an encouraging decision made by the Changsha Court that, if "Bordeaux" is used on the wines, as long as it is established that the wine is not from the Bordeaux region, the act of the wine producers/sellers constitute trademark infringement.
[Synopsis]
Plaintiff: Conseil Interprofessionnel du Vin de Bordeaux (CIVB)
Defendant : Hunan Margaux Trading Co., Ltd.
Conseil Interprofessionnel du Vin de Bordeaux ("CIVB"), founded in 1948, is a French interest group representing nearly 10,000 Bordeaux wine producers and growers, and 400 wineries. One of the many missions of the organisation is to promote the brand and defend the prestige of the Bordeaux wines in France and abroad. A Bordeaux wine is any wine produced in the Bordeaux region of southwest France. As of 2015, there are 60 Bordeaux appellations in the region that are recognized by the Appellation d'Origine Controlée (AOC), giving Bordeaux more appellations than any other wine region in France as well as in all of Europe.
On July 14, 2012, CIVB registered with the China Trademark Office (CTMO) the geographical indication ("GI") collective trademark "BORDEAUX波尔多" (BORDEAUX in Latin & Chinese character) in Class 33, designating wines. The collective trademark is used by the CIVB members, provided certain requirements are met: the chateau and vineyards must be located inside the geographical boundaries of the region; the chateau must agree to follow the specific rules and regulations set forth by the appellation for vineyard practices, allowable grapes, minimum and maximum yields, minimal sugar and alcoholic levels, as well as established practices for vinification.
In March, 2014, CIVB found a Hunan Margaux Trading Co., Ltd. ("Hunan Margaux") offering for sale multiple products with the trademark "玛歌堡" (Margaux Castle in Chinese), and "BORDEAUX" printed on the front label. It was easily confirmed that the said wine was not from Bordeaux region and, furthermore, that it did not meet the special quality requirements of Bordeaux wine.
In October 2016, CIVB filed a lawsuit before the Changsha Intermediate Court against Hunan Margaux on the ground of trademark infringement. The court reasoned that, the "BORDEAUX" mark was used on the cap and the frontal label to serve as a source identifier of the products. Such use falls under the category of trademark use. The accused mark "Bordeaux" is similar to the cited mark (BORDEAUX in Latin & Chinese character). More importantly, CIVB gave a statement that neither the Defendant nor the chateau indicated on the bottle was a CIVB member that is entitled to use the "BORDEAUX波尔多" GI collective trademark, a statement the defendant failed to rebut. The Court therefore found that sale of such wine constituted trademark infringement. The Changsha Court issued a judgment on July 4, 2017, awarding court injunction and damages of RMB 150,000. Wanhuida Peksung represented CIVB in the civil proceeding.
[Judge's Comment]
As the jewel in the crown of French wine, Bordeaux has a long history of being the victim of wine forgery in the Chinese wine market.
Even though BORDEAUX is registered with the CTMO as GI collective trademark, the administrative enforcement authorities tend not to find trademark infringement on the unauthorized use of such mark; some even hold that the mere use of Bordeaux does not constitute similar trademark to "Bordeaux波尔多", as the prominent part of the GI collective mark is the Chinese component "波尔多".
This is the first civil case that the GI collective trademark "Bordeaux波尔多" is granted judicial protection in China. It is an encouraging decision made by the Changsha Court that, if "Bordeaux" is used on the wines, as long as it is established that the wine is not from the Bordeaux region, the act of the wine producers/sellers constitute trademark infringement.
With these parameters on trademark infringement on GI collective mark established, the decision is expected to serve as a point of reference to the local administrative enforcement authorities in their enforcement practice in the future.
