Beijing High Court grants protection to Chivas’ 3D bottle trademarks and device trademarks covering its label and packaging by finding that the accused product using a decoration similar to Chivas’ trademarks constitutes trademark infringement.

Case Brief

Chivas Holding (IP) Limited (“Chivas”) owns in China several trademarks in class 33, i.e., the word mark "CHIVAS REGAL", two device marks for the front label and the packaging of the bottle, and two three-dimensional (3D) trademarks for the bottle shape (as shown below). Chivas Brothers Limited (“Chivas Brothers”) is the exclusive licensee to use the above trademarks in China.

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Word mark

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Device marks for label and packaging

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Two 3D bottle trademarks

Beijing Dong Peng Ju Yuan Trading Co., Ltd (“Beijing DPJY”) was engaged in selling a whisky produced by Hebei Ying Ze Long Winery Co., Ltd (“Hebei YZL”) using a bottle which reproduces the 3D trademark of Chivas, but uses a different name: SUMAI REGAL.

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A sample product of SUMAI REGAL

On September 19, 2014, Chivas and Chivas Brothers instituted a civil lawsuit against Beijing DPJY and Hebei YZL before the Beijing No. 3 Intermediate People’s Court on the grounds of trademark infringement and unfair competition.

The Court compared the label, bottle shape, and packaging of SUMAI REGAL whisky with Chivas’ cited trademarks, and held, in its judgment of December 23, 2014, that the front label, packaging and the bottle shape of the accused product were similar trademarks to that of Chivas’ and constituted trademark infringement. The court issued an injunction and granted damages for an amount of RMB 300,000.

Hebei YZL and Beijing DPJY appealed before the Beijing High People’s Court. In its judgment rendered on May 31, 2017, the High court upheld the infringement finding of the first instance court, but based its decision on a different reasoning.

Beijing High Court held that the most prominent mark of the infringing products is SUMAI REGAL, and that the other signs, i.e., the packaging and the decorative pattern of the products, are unlikely to be identified by the consumers as trademarks that function as source identifiers. In view of this, the appellants’ use of these signs on the infringing products does not constitute the “use of trademark”. However, the court opined that the designs (label, packaging and the bottle shape) used by the defendant resemble Chivas’ cited marks, and are likely to cause confusion and misidentification over the source of the products among the relevant public. The court cited Article 50.1 of the Regulations for the Implementation of the Trademark Law (2002), which provides that “using any signs which are identical with or similar to another person's registered trademark as the name of the goods or decoration of the goods on the same or similar goods, thus misleading the public” constitutes an act of trademark infringement, as defined in Article 52.5 of the Trademark Law “ to cause, in other respects, prejudice to the exclusive right of another person to use a registered trademark".

Comments:

The case was adjudicated under the regime of the 2001 Trademark Law and its Implementing Regulations of 2002. In such legal context, the High Court decision rectified the first instance reasoning: the accused signs should not have been considered as (similar) trademarks but only as "name or decoration" likely to mislead the public, hence falling under the category of "causing, in other respects, prejudice etc.".

The final result was the same of course.

The legal background has changed under the new revised law of 2013 and its implementing regulations of 2014. Article 76 of the Regulations, which is the same as Article 50.1 of the 2002 Regulations, refers to Article 57.2 of the revised law, which defines the act of infringement as: " (2) to use a trademark similar to a registered trademark in respect of the same goods or to use a trademark identical with or similar to a registered trademark in respect of similar goods, without authorization of the proprietor of the registered trademark, where such use is likely to cause confusion".

The difference between the two sets of law and Regulations (2001 and 2013) lies in the fact that, in the past, the use of similar "name and decoration" fell under the "catch all" clause of the law ("to cause, in other respect prejudice etc."), whereas, under the new law, the same behavior is directly considered as using "a similar trademark". The discussion whether the said signs are trademarks, in the sense of source identifiers, becomes obsolete.

Needless to say that brand owners should strengthen their trademark portfolio by registering not only their name but also the label, the packaging and the shape of their bottles as 3D trademarks.