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.