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.