Haworth & Lexon IP Cases Report (12)

Haworth & Lexon IP Law Newsletter
No.6, 2003 (Total:No.12) July 5th, 2003
Edited by Haworth & Lexon

"Haworth & Lexon Intellectual Property Law Newsletter" aims at introducing new cases and legal tendency in IP fields. All the comments do not mean the legal opinion of our firm and the firm does not have any legal liability for such comment. If you require any legal advice, we are willing to offer you considerate service. You can write E-mail to hl@hllawyers.com. If you have any interests and suggestions, or have any interests on some topics listed in this law newsletter, please contact with us.

Guidelines

★ Using " Bi Feng Tang " with Good Will, the Unfair Competition was not Established
★Name of an Overseas Enterprise was used by a Native Company in Advertisement, the Appellate CourtHeld that the Infringement was Established
★" Shanghai YI BAI " was Illegally Used, the Court Ordered the Defendant to Publish an Apology
★Registered Trademark was Similar to the Symbol of a Development Zone, the Infringement was Established
★A Case Regarding Infringement of Sculptures Got its Final Decision by Quanzhou Intermediate People's Court

Using "Bi Feng Tang " with Good Will, the Unfair Competition was not Established

Shanghai High People's Court affirmed the former decision made by Shanghai No.1 People's Court in June 2003 in the case Shanghai Bi Feng Tang Food Co, Ltd. vs. Shanghai De Rong Tang Food Co, Ltd. & Shanghai Dong Yong Port Restaurant Management Co, Ltd. relating to unfair competition. The appeal was rejected.
The plaintiff was registered in September 1998, and was approved by the authority of Industry and Commerce in September 1999 to use "Bi Feng Tang" in its plaque and outdoor advertisement.

The defendants, De Rong Tang and Dong Yong Port were respectively established in January and August 2001. De Rong Tang printed "Bi Feng Tang Unlimited Drinking" and "Bi Feng Tang Food" on the windows in the first and second floors of its restaurant, and it also printed "Chinatown Bi Feng Tang Food" in its menus and signposts. Similar words were used by Dong Yong Port in its shop front and advertisement.

Based on the above facts, Bi Feng Tang Co, Ltd. brought a lawsuit to Shanghai No.1 Intermediate People's Court in July 2002. The plaintiff maintained that, by using the words "Bi Feng Tang", the two defendants had misled customers and infringed its famous service mark and its name. The plaintiff also maintained that it was unfair competition.

Shanghai No.1 Intermediate People's Court held that, "Bi Feng Tang" was not created by the plaintiff. It was the name of a kind of dish and also a kind of management method, which appeared and was accepted by customers in long-term development and management. Thus, "Bi Feng Tang" was not a significant mark which can distinguish Bi Feng Tang Co, Ltd. from other companies. The court also held that, the defendants only emphasized their own names and features of management in their advertisement instead of using the name of the plaintiff, and no confusion can be made to mislead costumers. Therefore, the claim of the plaintiff was not supported. Bi Feng Tang Co, Ltd. was not satisfied and appealed to the appellate court.

Shanghai High People's Court held that, "Bi Feng Tang", which has stepped into the markets of the mainland, Taiwan and even everywhere all over the world, were derived from the characteristic seafood made by the fishers in Tong Luo Bay Fi Feng Tang, Hong Kong. The fishers were deeply familiar with sea products and their cooking method was unique.

Therefore, "Bi Feng Tang" dose not only mean "safe bay", but also a kind of unique cooking method and the food cooked by this method. The two defendants only used "Bi Feng Tang" to tell customers the features of the service they offered, and thus, no infringement was established.

Name of an Overseas Enterprise was used by a Native Company in Advertisement, the Appellate Court Held that the Infringement was Established

Shandong High People's Court made the final decision in the case Korean Hanshin Machinery Co, Ltd. vs. Qingdao Ju Xing Machinery Co, Ltd. regarding unfair competition. The court held that the infringement was established.

The plaintiff, Hanshin, a Korean enterprise producing air compressor，was established in 1969. Min Dexian, a former employee of Hanshin, registered Qingdao Ju Xing in China, which also produced air compressor. Without Hanshin's permission, Ju Xing used the word "Hanshin" in the introduction and advertisement for its own products.

In 2002, Hanshin brought a lawsuit to Qingdao Intermediate People's Court for unfair competition and claimed more than RMB 300,000 in damages.
The court held that, enterprise name is a significant mark which can distinguish different enterprises. The name "Hanshin Machinery Co, Ltd." was legally registered by the plaintiff in Korea, and "Hanshin", the most obvious part of the name was legally protected. Though it has not been registered in China, it should be protected by the Anti-Unfair Competition Law, because both China and Korea are members of Paris Convention, and Paris Convention requires the members to protect enterprise name without application or registration.

Nevertheless, enterprise name has its regional limitation. Because the plaintiff cannot offer sufficient evidence to prove that its name was also famous in the region involved in this case, it cannot be confirmed that, costumers will be misled by the defendant's advertisement. Thus, the court rejected the plaintiff's claim in December 2002. Hanshin Co, Ltd. was not satisfied and appealed to Shandong High People's Court.

Hanshin Co, Ltd. showed the appellate court the statements offered by 43 Korean-capital companies in Qingdao, most of which were familiar with Hanshin's products, and some even bought Hanshin's air compressors and used them in Qingdao. Misled by the defendant's advertisement, some Korean-capital enterprises regarded Ju Xing as an enterprise established by Hanshin in Qingdao.

The appellate court held that, the new evidence offered by Hanshin was enough to change the ground of the former decision, and in fact, the infringement was established.

In June 2003, the appellate ordered Ju Xing Co, Ltd. to stop its unfair competition, publish an apology and pay the plaintiff RMB 30,000 in damages.

" Shanghai YI BAI " was Illegally Used, the Court Ordered the Defendant to Publish an Apology

In June 2003, Shanghai No.1 Intermediate People's Court made its decision in the case Shanghai No.1 Department Store Co, Ltd. vs. Shanghai Rong Li Commerce and Trade Center regarding unfair competition and infringement of enterprise name. The court ordered the defendant to stop infringement, publish an apology and pay the plaintiff RMB 253,000 in damages.

From the end of September 2001 to the middle of November, in the name of "Shanghai No.1 Department Store Co, Ltd.", "Shanghai No.1 Department Store" or "Shanghai YI BAI", the defendant, Rong Li Commerce and Trade Center had issued advertisements of "Shanghai Famous Products Exhibition" in Fuzhou Evening News and Quanzhou Evening Paper , the defendant also distributed the tickets and held the exhibition in Fuzhou and Quanzhou in Fujian Province, and there was no permission made by the plaintiff.

The court held that, registered enterprise name was protected by the law and cannot be used without the permission of the owner. As a famous enterprise in China, the plaintiff's name represented the quality and credit of the commodities and services offered by the plaintiff.

As their habit, costumers usually call the plaintiff "Shanghai YI BAI" or "Shanghai No.1 Department Store". All the above names refer to the plaintiff. The defendant used the plaintiff's name in order to misled costumers and to give them the wrong impression that it was the plaintiff who held the exhibition in Fuzhou and Quanzhou.
Thus, the court made the decision mentioned above.

Registered Trademark was Similar to the Symbol of a Development Zone, the Infringement was Established

In June 2003, the appellate court, Tianjin High People's Court affirmed the former decision in the case Tianjin Economy and Technology Development Zone vs. Tianjin Ping An Biologic Technology Engineering Co, Ltd. & Sichuan Tai Da Wine Co, Ltd. & Tianjin Tai Qing Technology and Trade Co, Ltd. relating to trademark infringement and unfair competition. In the first trial, the court held that the infringement was established and awarded the plaintiff damages of RMB 300,000.

In the beginning of 1996, the Administrative Committee of Tianjin Economy and Technology Development Zone designed "logo + TEDA" as the symbol of the development zone, and it also assigned Guo Zi Co. to administer this intangible property. In February 14, Guo Zi Co. registered this symbol as a trademark of Classification 32. In December 2001, Guo Zi Co. found that, the main part of the trademarks, which were registered by the three defendants and used in the advertisements for their wine products, were as same as the above trademark in both pronunciation and words, and the Chinese words "Tai Da", together with "TEDA" were used obviously.

The Development Zone brought a lawsuit and claimed that the defendants must stop infringement and pay RMB 1,000,000 in damages. The court held that the infringement was established and awarded the plaintiff damages of RMB 300,000.
The defendants maintained that their trademarks were legally acquired and used in the products of different classification from the plaintiff, so there was no infringement. Thus, they appealed to Tianjin High People's Court.

The appellate court held that, as the common mark of the development zone, the symbol involved in this case did not own the basic nature of a trademark for the related public to distinguish commodities. According to the principle of our Trademark Law, it was necessary to exam every trademark involved in this case in the aspects of validity, rationality and effect of distinguishing by the related public, so as to maintain the seriousness of law and the benefits of the public. It was obvious that the appellants used this symbol in their trademarks and products, in order to use its great reputation. Thus, they had infringed the appellee's prior related right.

The appellate also held that, though the appellee's prior right and its administration did not cause a competition relationship with the appellants as managers in same business, the decision was not affected. Thus, the court rejected the claim of the appellants and affirmed the former decision.

A Case Regarding Infringement of Sculptures Got its Final Decision by Quanzhou Intermediate People's Court

In June 2003, Quanzhou Intermediate People's Court made the decision in the case Liu Zhengde vs. Fujian Huian Chongfa Travel Service Co. regarding copyright infringement. The court ordered the defendant to dismantle the three sculptures involved in this case, apologize to the plaintiff and pay him RMB 90,000 in damages.
In 1986, the plaintiff, Liu Zhengde created the three sculptures "three monks", "shooter and oil seller" and "She Gong likes Dragons". All the sculptures, together with other works were exhibited in the Allegory Sculpture Park located in Hubei Wuhan East Lake Park. In November 1997, the defendant set up a Chinese Stone Sculpture Exhibition Park in Chongwu Travel Zone, and there were three stone sculptures "three monks", "shooter and oil seller" and "She Gong likes Dragons" in this park.

After surveying these sculptures, the court found the three works in the dependant's park were derived from the plaintiff's sculptures in the aspects of conceiving, collecting materials, arrangement of parts, method of shaping, application of direct lines, and the simple style. The defendant changed some parts and details of the original works, and shorten the proportion.

Therefore, the court made the above decision.