Weekly China Trademark News Updates

January 23, 2024

1. The Court Finds Geographical Indication Collective Mark “Champagne” Constitutes a Well-Known Mark

Recently, the Beijing High Court concluded a second instance trademark infringement dispute between the French Champagne Industry Commission (the “Champagne Commission”), Guangzhou Xuelei Cosmetics Co., Ltd. (“Guangzhou Xuelei”), and Beijing Yalishadi Cosmetics Co., Ltd. (“Beijing Yalishadi”). The court held that the “Champagne” mark with reg. no.  11127266 and the “Champagne in Chinese” mark with reg. no. 11127267 constituted well-known marks on wine and other goods. Guangzhou Xuelei and Beijing Yalishadi should immediately stop the infringement and compensate for economic losses and reasonable expenses of RMB 220,000 (USD 30,980).

Cited Marks

The court found that: First, based on the sales scope, sales volume and sales price of Champagne wine in the Chinese market, and the facts such as the advertising, honors and protected records of the registered “Champagne” and “Champagne in Chinese” marks in mainland China, it was sufficient to conclude that before the infringement occurred on July 5, 2019, the Champagne Commission’s “Champagne” and “Champagne in Chinese” marks have gained high visibility and influence on wine products, and were widely known to the relevant public and constituted well-known marks.

Second, although the packaging boxes and bottles of the accused infringing products were still marked with the words “MeiDun” and “Mei Dun in Chinese,” there are many cases in the market where two or more commercial logos are used on the same product at the same time. The existence of a commercial logo does not necessarily affect the role of other logos in distinguishing the source of goods. The allegedly infringing goods prominently use the “Champagne Life” and “Champagne Life in Chinese” logos on the bottle and packaging box in a more eye-catching manner. The said acts obviously have the purpose of indicating the source of the goods to enable the relevant public to distinguish different product providers, which constituted as trademark use under the Trademark Law.

Third, although the perfume product used by the accused logo and the wine product for which the “Champagne” mark is approved and famous for use are not classified as the same or similar goods according to the CNIPA Classification of Goods and Services, there are relatively large overlap among the relevant public. The “Champagne” and “Champagne in Chinese” marks have been widely known to the public, when the accused logos “Champagne Life” and “Champagne Life in Chinese” were used on the accused infringing goods, it was enough to cause the relevant public’s misunderstanding of the source of goods with the said well-known marks, which constituted an infringement of the Champagne Commission’s well-known trademark rights, and it should bear corresponding legal liability.

2. The Court Recognized “AO Smith in Chinese” as a Well-known Mark

Recently, the Jiangsu High Court concluded a second instance trademark infringement and anti-unfair competition dispute between A.O. Smith Corporation (“A.O. Smith”), A.O. Smith (China) Water Heater Co., Ltd. (“A.O. Smith China”), and Guangdong Simaisi Electric Co., Ltd. (“Guangdong Simaisi”), Taizhou Qingfeng Decoration Co., Ltd. (“Taizhou Qingfeng”). The court held that the “AO Smith in Chinese” mark with reg. no. 1114992 and “AOSmith” mark with reg. no. 2017196 constitute well-known marks on water heaters and other goods. The defendants infringed upon A.O. Smith and A.O. Smith China’s trademark right and should immediately stop the infringement and compensate for economic losses of RMB 1.5 million (USD211,400).

Cited Marks

The court found that: First, despite the administrative rulings found that when a third party used the “AO Smith in Chinese” mark on laundry machine goods in June 2003, the Cited mark “AO Smith in Chinese” with reg. no. 1114992 has not yet constituted as a well-known mar. According to the case-by-case principle followed by courts in recognizing well-known marks, such finding may not necessarily affect this court’s rulings of this case based on the evidence at hand. Therefore, whether the Cited Marks can be recognized as well-known marks shall be determined based on the evidence and facts of this case.

Second, if there is a slight difference between the actually used trademark and the registered trademark, but its distinctive features does not change, it can be regarded as the use of a registered trademark. Before October 2003, the plaintiff used the words “A.O. Smith” and “A.O. Smith in Chinese” in commercial activities, and a stable corresponding relationship between the two marks had been established. The plaintiff’s actual use of the two marks did not change the distinctive features of the trademark involved and can be regarded as trademark use. In addition, for trademarks that have been actually used before registration is approved, such use can be considered as a continuation of use. Therefore, it can be concluded that the plaintiff continued to use its Cited Marks before October 2003.

Third, comprehensive consideration of the sales contracts, advertising, promotion activities, media reports, audit reports involved, market survey reports, search reports, etc. provided by the plaintiff was sufficient to determine that before October 2003, the Cited Marks had been widely known to the relevant public in China and reached a well-known level, and is still well-known today.

In addition, in this case, the Cited marks mainly contains elements such as “Smith in Chinese” and “SMITH.” Through the publicity and use of the right holder, “Smith in Chinese” and “SMITH” have become the core elements for identifying the source of goods. The accused infringing logo is similar to the Cited Marks in text, pronunciation, and overall appearance, which constituted similar marks. When the alleged infringing trademark was used, the Cited Marks had already gained a high reputation across the country. The use of the accused infringing mark on the same or similar goods can easily cause confusion to the relevant public, and the accused acts constituted trademark infringement.

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