Docket No.: 17015, first instance (初), civil case (民), (2018) Pudong New District People's Court of Shanghai Municipality (沪0115)

SUMMARY OF THE ARGUMENT

In the case of the act fully imitating the trade dress of well-known goods, If the plaintiff's claim can be supported in accordance with the Trademark Law, the anti-unfair competition law shall not be used for additional protection. If the plaintiff's claim cannot be supported by the Trademark Law and does not conflict with the legislative policy of trademark law, it can still be regulated by anti-unfair competition law, so as to achieve full and comprehensive protection of trade dress.

STATEMENT OF THE CASE AND FACTS

BUDWEISER CHINA SALES CO., LTD.,

Plaintiff

v.

JIANGXI LANSE ROUQING BEER CO., LTD.,

GANZHOU BAIHUI WINE CO., LTD.,

SHANGHAI PUDONG NEW AREA ZHANGJIANG TOWN QIANGLING FOOD STORE.,

Defendants

ANHEUSER-BUSCH, LLC, a party not involved in this case, is the trademark owner of “百威 Budweiser China Sales Co., Ltd. (“Budweiser”)”, “Budweiser” and related graphic registered trademarks (“the trademark in dispute”). The Plaintiff Budweiser is authorized to enjoy the right to use the trademarks in dispute, and has the right to bring a lawsuit against the infringement of the exclusive right to use the trademark in dispute. In 2017, the Plaintiff found that the Defendant Shanghai Pudong New Area Zhangjiang Town Qiangling Food Store (“Qiangling Food Store”) sold 500ml pop-canned beer named “baiwan beer” (“the product being sued for infringement”) in its store. The product being sued for infringement was marked with the Defendant Ganzhou Baihui Wine Co., Ltd. (“Baihui”) as the manufacturer, Defendant Jiangxi Lanse Rouqing Beer Co., Ltd (“Lanse Rouqing”) as supervisor, and the words including “authorized by American Budweiser Beer (Jiangxi) Group Co., Ltd.”. The Plaintiff believed that the product being sued for infringement had infringed the exclusive right of it to use the registered trademark in dispute, which was evidenced by red and white as the main color of overall trade dress of the product being sued for infringement, eagle, ribbon, wheat ear, “Baiwanbeer” and “SINCE2016” in art font and other elements on the front of the can, the words “authorized by American Budweiser Beer (Jiangxi) Group Co., Ltd.” prominently shown on the can, and the words “Baiwan beer” on the front and side of the can. Furthermore, because the overall trade dress of the Plaintiff’s product used red and white as the main color, the front of the can included elements such as ribbon with English words, round seal with AB letters, leaves, wheat ears, words “Budweiser” in art font and “SINCE1876”, they had obvious distinctive characteristics, making the trade dress have a certain of influence. The words “authorized by American Budweiser Beer (Jiangxi) Group Co., Ltd.” was prominently shown on the body of the product being sued for infringement, which was the Plaintiff’s influential enterprise name, but the Defendants used it without authorization, so constituted unfair competition. The Plaintiff then appealed to the court to request the Defendants to stop the infringement, eliminate ill effects and claimed RMB 3 million for economic losses.

After trial, Pudong Court held that the design of the registered trademark of graphics in dispute was sophisticated. The court compared the products of the Plaintiff and Defendants in terms of their overall appearance and main parts, it judged that both products were similar in structure, color matching, elements and composition, the subtle differences were not easy to be identified  by the relevant public with general observation, which was a sufficient reason to cause confusion among consumers, so the marks on the front of the product being sued for infringement had infringed the Plaintiff’s exclusive right to use registered trademark of graphics in dispute. Because the infringement act in this case occurred before registration of the trademark, the act after the registration of trademark was the infringement of the exclusive right to use registered trademark. For the infringement act before the trademark registration, the court held that because the mark had long been used by the Plaintiff, so it fell into the trade dress with a certain influence within the meaning of anti-unfair competition law, accordingly, the act of Defendants using it without authorization was unfair competition.

With regard to the words "authorized by American Budweiser Beer (Jiangxi) Group Co., Ltd.", the above words were presented in the same font, color and size, without prominently showing the word "Budweiser". The court judged that such act of Defendants should not be identified as trademark infringement act because the Defendants did not prominently use the words that were identical with or similar to other's registered trademark as its brand name on the identical or similar goods. However, this act not only disturbed the order of market competition and damaged the legitimate rights and interests of the Plaintiff, but also easily led to confusion among the relevant public about the relationship between the Plaintiff and the Defendants and the source of the product being sued for infringement. According to Item 4 of Article 6 of the Anti-Unfair Competition Law, such act was other confusion act that was sufficient to lead people to mistakenly believe that the product was the goods of others or had a specific connection with others, resulting in unfair competition against the Plaintiff.

With regard to the compensation amount, the court held that the amount of statutory compensation for intellectual property rights should not only reflect the compensatory nature of covering losses of the Plaintiff, but also be punitive in curbing recurrence of infringement act, so as to bring out the role of intellectual property civil liability in guidance and prevention, particularly in the field of food, which was closely related to the life health of consumers. By giving comprehensive consideration to the awareness of the trademark in dispute, the circumstances of the infringement act and the subjective state of the Defendants, the court finally applied the statutory maximum compensation with RMB 3 million awarded.

ANALYSIS

This case is a typical case in comprehensive imitation of the trade dress of well-known goods, the judgment of this case has clarified the boundary between trademark infringement act and unfair competition act in such cases, and awarded maximum compensation based on the awareness of the trademark in dispute, the subjective state of the Defendants, the circumstances of infringement and other considerations, thus protecting the life, health and safety of consumers. It has brought out the role of intellectual property civil liability in guidance and prevention, and embodied the social governance role of the judiciary system.