(By You Yunting) Recently, we introduced that Zhejiang Xiyingmen Beer Company constituted trademark infringement through the use of recycled Budweiser’s beer bottle. In today’s post, we will introduce an unfair competition lawsuit where Zhejiang Xiyingmen Beer Company used the similar packaging and presentation with that of Budweiser-sponsored Harbin Beer.

Introduction to the Case:

Appellant (Defendant at the first instance): Xiyingmen Beer Company

Respondent (Plaintiff at the first instance):  Anheuser-Busch and Harbin Brewery Group (the “Harbin Brewery”)

Court of first instance: Shanghai No.1 Intermediate People’s Court  No.：沪一中民五（知）初字第138号

Court of second instance: Shanghai Higher People’s Court  No.: 沪高民三（知）终字第110号

In the first instance, Plaintiff Harbin Brewery claimed that, Harbin Brewery produced and sold Harbin Beer with its packaging bottles unique to the public, and registered its specific packaging as a trademark since 2006. However, after discovered that the bottles produced and used by Xiyingmen Beer Company were similar to that of the plaintiff, Plaintiff Harbin Brewery filed a lawsuit against Xiyingmen Beer Company.

The court of first instance decided in the following:

First, Harbin Beer is considered to be a famous product;

Second, the packaging and presentation of Harbin Beer are specific in beers;

Third, Xiyingmen Beer used similar packaging and presentation to that of Harbin Beer and thus is likely to lead the public into thinking that they are associated with each other.

Therefore, the court determined the defendant to immediate stop infringement on the specific packaging and presentations of Harbin Beer, to make compensation in the amount of RMB 400,000 and to make a written apology on the Weihui Daily (a local news outlet with considerable influence).

 After the first instance, Xiyingmen Beer Company appealed and then provided some new evidences. Xiyingmen Beer Company provided a patented certificate of its beer bottle in proving that its bottle packaging has received patent certificate, without using the specific packaging and presentation of Harbin Beer. After the litigation was filed, Xiyingmen Beer Company submitted other evidences, such as other beers’ bottles and their photos, and patent research reports on the packaging and presentation of beer bottles, for the purpose of demonstrating that the packaging and presentation of Harbin Beer has already existed in the market and shall not be considered as specific ones. In the preceding of second instance, the Harbin Brewery also provided some decisions of punishment, detailed lists and the photos taken by different local administrations for Industry and Commerce, proving that there exists conflicts between the Xiyingmen Beer Company’s patent and Harbin Brewery’s prior rights and that the packaging in the patent research reports does not affect the specificity of the Harbin Beer.

The court of second instance held that, goods with certain market cognition and known to the public within the territory of China shall be identified as “well-known goods” as set forth in the Anti-unfair Competition Law. In determining well-known goods, the court shall take into account the sales time, region, amount and customers of the said goods, the duration, extent and geographical range of  any campaigns, and the protection received by such goods as well-known goods and other factors to make comprehensive judgment. In this case, Harbin Beer has had a long history in production and sales over the whole country, with the sales capacity to over 4.2 billion. Furthermore, Harbin Brewery had put great numbers of advertising into the market and also won different types of honors. What’s more, in a previous dispute, a court recognized Harbin Brewery’s trademark as a famous trademark in China. For these reasons, the court determined that, the Harbin Beer with certain market cognition in Jiangsu, Zhejiang, Shanghai and even the whole China and known to the public shall be identified as well-known goods.

 When referring to whether the packaging and presentation of Harbin Beer are specific, the second instance held that, the use of the reliefs, colors, designs and words in the packaging and presentation of Harbin Beer are adequate to attract the attention from customers, sufficient to distinguish the source of goods from the same goods. However, the evidences provided by Xiyingmen Beer Company were insufficient to prove that the packaging and presentation of Harbin Beer are almost universal in the beer industry.

 Considering the claim of huge differences between Xiyingmen beer and Harbin Beer, the second instance held that, the three suspected packaging of Xiyingmen beer had contained the distinguished characters of Harbin Beer’s on the whole. Even though there are some differences in details, the specificity and awareness of Harbin Beer’ packaging and presentation are adequate to cause the public into confusion and misunderstanding. Furthermore, Xiyingmen Beer Company still used the bottles with the logos of “Budweiser” and “Anheuser-Busch InBev” at the bottom of its beer. Based on the above practice, Xiyingmen Beer Company is determined to be malicious to use the specific packaging and presentation. As such, the second instance decided to reject Xiyingmen Beer Company’s appeal and affirm the original judgment.

Lawyer’s Comment:

One of the greatest challenges for well-known brands across the world is the copycat of the packaging and decoration unique to well-known goods. In this case, like most countries, Chinese courts also attempt to protect the interests of well-known brands. However, the counterarguments of what Xiyingmen Beer Company tried to prove by new evidences in the second instance are worthy of discussion.

1. Certification of design patent.

China may make an initial examination of the application for design patent, not review the originality of design patent. It means that the application will be approved to receive the certification of design patent if the form of its application is qualified. In this case, as the certification of design patent backed by Xiyingmen Beer Company is received after the sales of infringing goods, the court did not accept such certification. Then what is the function of such certification? The answers may take an example. If a supermarket refused to sell Xiyingmen beers by virtue of its similar packaging and presentation with that of Harbin Beer’s, then Xiyingmen Beer Company will use such certification to resolve this problem in resell its beers.

2. Other beers’ bottles and their photos.

The reason why Xiyingmen Beer Company would provide other beers’ bottle with similar packaging and presentation with that of Harbin Beer is trying to inform of the court that there are so many beer companies copycatted the packaging and presentation of Harbin Beer in the market. As Xiyingmen Beer Company lost this case, the other beer companies will be affected from this case. In the opinion of Xiyingmen Beer Company, the court shall take into account the social influence if the other beer companies are affected follow-up litigations. Under the fact that China has consistently emphasized that the protection standard of intellectual property shall be established fit for Chinese conditions, if an infringement judgment will lead many companies into follow-up continuous lawsuits of infringement, such factor shall be taken into twice thinking in making a judgment. In many cases, the infringing parties would use this factor to affect the judgment preventing the court from supporting the plaintiff’s claim. However, in this case, the court resisted this pressure and supported the claim of the well-known brand manufacturer.

Lawyer Contacts

You Yunting：86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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