Dentons Advises on Award-winning Intellectual Property Protection Case

On the morning of April 19, 2018, the Supreme People's Court held a press conference to formally launch the 10th "National Courts' IP Protection Week". At the press conference, Tao Kaiyuan, Vice-president of the Supreme People's Court, and Song Xiaoming, Chief Judge of Intellectual Property Rights Tribunal of the Supreme People's Court, introduced the overall judicial protection of intellectual property rights in 2017 and intellectual property cases in 2017 across the country. They also announced the 2017 "Top 10 Intellectual Property Cases" and another 50 typical cases. The "Dao Hua Xiang DAOHUAXIANG Trademark Infringement Dispute" case advised by Dentons Fuzhou office senior partner Jun Xu and associate Allen Zhong was recognized as one of the Top 10 Intellectual Property Cases.

Basic situation of this case:

Fuzhou Rice Factory is the exclusive right holder of the registered trademark "Dao Hua Xiang DAOHUAXIANG". The application for the trademark in question was filed in March 1998, and Fuzhou Rice Factory gained the registration approval on July 28, 1999 for this mark to be used on rice. On March 18, 2009, the Heilongjiang Provincial Crop Variety Approval Committee issued a "Heilongjiang Crop Variety Approval Certificate" recording a rice species of "Wuyoudao No. 4'' (formerly named as "Daohuaxiang No.2"). On February 18, 2014, Fuzhou Rice Factory purchased a bag of rice "Qiao Family Courtyard Daohuaxiang Rice" manufactured and sold by Wuchang Jinfutai Agricultural Co., Ltd. ("Wuchang") in Fuzhou Jinshan Dajingcheng Branch ("Dajingcheng Branch") of Fujian Xinhuadu Integrated Department Store Co., Ltd. ("Xinhuadu") in front of the notary. The front center position of the rice bag is marked in a large typeface with the characters of "Dao Hua Xiang DAOHUAXIANG". Therefore, Fuzhou Rice Factory filed a trademark infringement lawsuit against Wuchang, Dajingcheng Branch and Xinhuadu. The court of first instance held that "Dao Hua Xiang" was not a generic term, and the logo Wuchang used on its product was very similar to the registered trademark held by Fuzhou Rice Factory. It could easily mislead consumers, therefore the actions of Wuchang, Dajingcheng Branch and Xinhuadu have constituted trademark infringement. The court of second instance found that rice produced on this particular geographic planting environment in Wuchang City was generally called "Daohuaxiang"; Wuchang's usage of the characters and pinyin of "Daohuaxiang" was to indicate the species of the rice; subjectively it was good-will and objectively it did not cause confusion and misrecognition. Thus, the court revoked the verdict of the first instance and rejected all the claims of Fuzhou Rice Factory. The factory refused to accept the judgment and retained Dentons Fuzhou office senior partner Jun Xu and associate Allen Zhong to assist in appealing to the Supreme People's Court. After reviewing this case, the Supreme People's Court held that Wuchang had no evidence to prove that "Daohuaxiang" was a legal generic term. The meaning of the common name prescribed in the verification method for crop varieties and the generic term in the sense of the trademark law are not exactly the same. The approval certificate cannot be the sole basis to determine that the marks involved in this case belong to the generic term in the sense of trademark law. The original code on the official announcement was "Daohuaxiang No. 2", not "Daohuaxiang". Besides, the trademark in question had been registered before the certificate was released, thus one could not directly prove that "Dao Hua Xiang" was a legal generic name. The Supreme People's Court quashed the judgment of the second instance and upheld the judgment of the first instance.

Significance of this case:

This case involves issues such as the relationship between the right to use a registered trademark and the name of the variety, and the criteria for determining a generic name. The “Daohuaxiang No. 2” rice involved in this case is an excellent rice variety in the Wuchang region of Heilongjiang province. The trial of this case drew broad attention from the industry. The judgments are directly related to the normal production and business activities of the rice variety “Daohuaxiang No. 2” and the market order. The Supreme People's Court clarified the underpinning criteria for adjudication of such kind of cases, by explaining certain important legal issues in trademark law, such as the judging standards of legal generic names and conventional common names, as well as the differences and links between the exclusive rights of registered trademarks and the names of varieties. It balanced the interests between the registered trademark right holder and the user of the variety name, and maintained a fair and orderly market while fully protecting the trademark rights.

    This case mainly solves the problem of identifying generic names. The Supreme People's Court strictly followed the stipulations in the “SPC Opinions on Several Issues relating to Handling Administrative Cases concerning the Grant and Confirmation of Trademark Rights”, and conducted demonstrations in terms of legal and conventional generic names. It also stated that the general knowledge of the relevant public nationwide was the usual standard for judging whether a name is generic by convention. For goods that are specific to a relevant market, a court may rule that the title normally used for the goods in the relevant market are their generic name. This case is considered as an example and template for the generic name identification standard, providing clear references for courts at all levels to try cases concerning generic names.