[People's Court Daily] A Shanghai Liquor Shop Convicted of Trademark Infringement for Selling Baijiu with "Yanghe" on its Label

January 9, 2019People's Court Daily  Page 03

People's Court Daily — A liquor shop in Jiuting Town, Songjiang District, Shanghai (hereinafter referred to as the liquor shop) was sued by the Sujiu Group Trade Co., Ltd. (hereinafter referred to as Sujiu Company) for selling "Honor Blue" baijiu with"Jiangsu Yanghe" and "Capital of Spirits Yanghe"printed on their labels.Recently, Shanghai Intellectual Property Court (hereinafter referred to as SIPC) concluded a case of trademark right dispute between a liquor shop and Sujiu Company. The court decided to dismiss the appeal and affirm the original judgment that the liquor shop shallstop selling the infringing product and pay Sujiu Company RMB11,000 yuan in compensation for its economic loss and RMB3,500 yuan for its reasonable expenses.

In July 2017, Sujiudiscoveredthat a liquor shop sold on its operating premise "Honor Blue" baijiu with"Jiangsu Yanghe" and "Capital of Spirits Yanghe"printed on their labels without its permission.Sujiu Company held that the liquor shop's behavior violated its exclusive right to use the trademark in question, and filed a lawsuit with a court requesting that the liquor shop immediately stop the infringement and pay it RMB40,000 yuan in compensation for its economic loss and RMB4,000 yuan for thereasonable expenses incurred bystopping the infringement.

After hearing the case, the court of first instance held that, “Yanghe” was a well-known trademark on the liquor market, and the alleged infringing product wasprintedon the outer packaging and the bottles with "Jiangsu Yanghe" and "Capital of Spirits Yanghe" in conspicuous and easily identifiablecolors different from the background color of the packaging; as the word "Yanghe" objectively functioned as an indicator of the product' source, such a behavior was affirmed as trademark use.As for the liquor shop's claim that the word "Yanghe" printedon the alleged infringing product served as an indicator of the place of origin instead of a trademark,the court of first instance held that, firstly, whether a mark of a product hasor actually playsthe function of distinguishing is not up to the subjective intention of the user, but instead to the objective fact whether the mark indicates the product's source;secondly, given the fact that the appellee's trademark isalready well-known, necessary avoidance should be made if the appellant wantedto specifythe place of origin of the infringing product;even if the appellant wanted to simplify the description, "Yanghe Town, Suqian City, Jiangsu Province" or simply "Yanghe Town" could have perfectly served to completely and clearly display the administrative level of the place of origin;yet the appellant chose no other word but "Yanghe", the same as someone else's exclusive trademark, and printedit on a liquor product; so the claim about indicating the place of origin was not justified.Considering the above reasons, the court of first instance ruled that the liquor shop must stop selling the product infringing on the exclusive right to use the involved registered trademark and pay Sujiu Company RMB11,000 yuan in compensation for its economic loss and RMB3,500 yuan for its reasonable expenses.

“The words ‘Suqing’ and ‘K8’are clearly printed on the outer packaging of the baijiuIsold and they can absolutely distinguish it from other products.Besides, I only sold one bottle. Now I have to compensate more thanRMB 10,000 yuan. It just doesn’t make sense to me."The liquor shop refused to accept the ruling of the first-instance court and filed an appeal with SIPC.

After hearing the case, SIPC held that, the first-instance court’s determination that the allegedbaijiuwas an infringing product against the exclusive right to use the registered trademark "Yanghe" was fully appropriate.Also, the court of second instance fully agreed with the first-instance court on its analysis and determination against the argument that "Yanghe" on the alleged infringing product only meant as an indicator of the place of origin.Besides, the additional facts confirmed by the second instance showed, the applicants of the three marks “Suqing,” “K8” and “Honor Blue” displayed on the alleged infringing baijiu were not the same one,and "Suqing" was the only registered trademark; and no evidence presented could prove that the manufacturer “Jiangsu Yanghe Liquor Co., Ltd.” displayed on the outer packaging was related to these marks; the manufacturer's address on the outerpackaging was not the same as the domicile of the former "Jiangsu Yanghe Liquor Co. Ltd." before the cancellation, either.Moreover, “Jiangsu Yanghe Liquor Co., Ltd.” had already been cancelled in May 2014, and the alleged infringing baijiu was obtained in July 2017 through preservation notarization.The above facts were sufficient to show that the baijiu obtained through preservation notarization was obviously an infringing product.As one who hasbeen engaged in the wholesale and retail of liquor for years, the appellant should have been able to make correct judgment.However, the appellant still sold the product involving trademark infringement, and failed to provide any evidence to prove the claim that the sold product had a legitimate source and only one bottle had been sold.Accordingly, SIPC ruled that the appeal was dismissed and the original judgment was upheld.

(Chen Yingying)