Recently, “Ba Wang Zui”’s litigation against “Sheng Guang Ba Wang Zui” trademark right infringement case received ruling in the final trial. The Highest People’s Court of Hubei affirmed the ruling of the first-instance court completely, and ruled that Hubei Sheng Guang Winery Company make compensation to Shi Hua Winery Company for economic losses and appropriate expenses of 1 million RMB.

Case Summary

Shi Hua Winery Company is well known enterprise in Hubei province. The company enjoys the exclusive right to use the “Ba Wang Zui” serial trademarks. The Ba Wang Zui series baijiu is a best-selling product in China and abroad, and its unique manufacturing techniques received honors such as “China No.1 Proof” and “Three Treasures of Xiangfan”.

Since 2014, Hubei Sheng Guang Winery Company applied for the registrations of several trademarks, including “Ba Wang Zui”, “Sheng Guang Ba Wang Zui” and “Sheng Xi Ba Wang Zui” on products or services such as “baijiu” and “restaurant” (these trademarks were refused by the Trademark Office for several times). The company also received the transfer of “Sheng Guang Ba Wang Zui” trademark from Hubei Sheng Guang Printing Company. In commercial activities, Hubei Sheng Guang Winery Company used the aforementioned trademarks extensively in promotion and application, and specifically highlighted the text of “Ba Wang Zui” in the aforementioned trademarks.

Court Trial

Hubei Xiangyang Intermediate People’s Court held in the first-instance trial that: Shi Hua Wineary Company’s “Ba Wang Zui” registered trademark had undergone long-term usage and promotion. It possessed high level of fame in Hubei province and had certain influence in the nationwide market. The “China Ba Wang Zui” symbol used by Hubei Sheng Guang Winery Company on baijiu packages had the text “Ba Wang Zui” highlighted. The text “Ba Wang Zui” in the symbols hanged in the commercial premise, including “Ba Wang Zui” and “China Ba Wang Zui”, constituted similar trademark to the “Ba Wang Zui” trademark of Shi Hua Winery Company. This would easily cause the consumers to mistake a specific connection between the alcohol sold or the hotels run by the company and Shi Hua Winery Company.

Therefore, Hubei Sheng Guang Winery Company's acts of overstepping the designated products and of highlighting the text “Ba Wang Zui” both constituted trademark infringement. In the comprehensive consideration of the market value of “Ba Wang Zui” trademark of Shi Hua Winery Company and the infringement acts of Hubei Sheng Guang Winery Company, Hubei Sheng Guang Winery Company was ruled to make compensation to Shi Hua Winery Company for economic losses of 1 million RMB.

Hubei Sheng Guang Winery Company was unconvinced by the first-instance ruling and appealed. The second-trial court affirmed the facts confirmed in the first-instance ruling and proposed the following: the “Ba Wang Zui” trademark of Shi Hua Winery Company had obtained relative high reputation. The appellant, with the acknowledgement that the “Ba Wang Zui” trademark had been registered and used by Shi Hua Winery Company, applied for the registration of trademarks including “Ba Wang Zui”, “China Ba Wang Zui”, and “Sheng Xi Ba Wang Zui” on the same type of products. It also repeatedly applied for registration under several refusals by the Trademark Office. It continuously promoted and sold its baijiu with “Ba Wang Zui” symbol, using the received Notice of Trademark Registration Application Acceptance. The company made obvious subjective mistake, committed infringement for a long time, and posed severe harm to the reputation and market value of the “Ba Wang Zui” trademark. Accordingly, the amount of compensation affirmed by the first-instance court was appropriate and the appellant’s reasons for repeal did not stand. The appeal shall be rejected and the initial ruling shall be supported.

Comment

This case a typical case of counterfeiting the highly-reputed trademarks of others to obtain inappropriate profits. The right infringer submitted a large quantity of trademark registration application for “Ba Wang Zui” trademark to “legalize” its use of the trademark. It also exploited the gap in time between the acceptance of trademark application and the approval for trademark registration, to use the Notice of Trademark Registration Application Acceptance to disguise the refusal of its trademark by the Trademark Office. Also, the infringer conducted transformed use of its applied trademarks and highlighted the part that was similar to the well-known trademark of others, with the purpose of misleading the public for inappropriate profits. For such long-term and consistent bad-faith behaviors, the second-instance court explicitly included them into the consideration of the value of compensation. The case had significant meaning for trademark infringement cases of the same type.

The legal service team led by Zhang Hong and Xu Jin, two partners and senior lawyers of Beijing Janlea Law Firm, provided full legal service for Shi Hua Winery Company in the litigation of this case.