Representing Jiaduobao against Wanglaoji for its using, without authorization, the names, packaging or decoration peculiar to well-known goods

Attorneys: Ping LIU

Synopsis:

I. Both parties agreed that the red-can Liangcha drink produced by Jiaduobao Beverage and Food Co. Ltd. (hereafter Jiaduobao) is a well-known good and its package and decoration shall enjoy exclusive protection.
During the procedure of evidence exchange hosted by the Court on April 15 and May 8, 2013, the Joint attorney of Guangzhou Pharmaceutical Holdings Limited (hereafter GPC) and Dajiankang Company (hereafter Dajiankang) indicated that the product he claimed to be a well-known good was actually the red-can Liangcha produced by Jiaduobao.
Therefore, both parties reached a consensus that the red-can Liangcha produced by Jiaduobao is a well-known good and the package and decoration peculiar to it shall enjoy exclusive protection.
II. Jiaduobao has exclusive right over the contested package and decoration peculiar to the well-known good
a. Jiaduobao's red-can Liangcha drink has become a well-known good by virtue of Jiaduobao's mass production, on-going marketing, extensive advertisement and deep involvement of charity events. The red-can Liangcha drink occupies the largest share in the domestic can drink market thanks to its good quality and special taste.

b. The evidence submitted by Jiaduobao establishes a complete evidential chain; demonstrating that Mr. Hongdao CHEN commissioned the design of the package and decoration peculiar to the well-known good, applied for design patent for this design thereafter and finally used it as the package and decoration of the Liangcha drink.
By contrast, GPC's claim that it authorizes Jiaduobao to use the red-can package is quite ridiculous because it never involves in any activities regarding the design of the package and decoration, nor the patent prosecution, nor the advertisement. It is absurd to say that it authorizes others to use the design since GPC has not a single right on it at all.
c. The well-known good produced by Jiaduobao is the first and only red-can Liangcha drink in the marketplace. Thus, Jiaduobao is the right holder of the contested package and decoration peculiar to the well-known good, i.e. the red-can Liangcha drink.
d. Jiaduobao uses the authorized recipe from Zebang WANG's descendant to produce the red-can Liangcha drink. Besides, consumers are able to distinguish between the green-box Liangcha drink sponsored by GPC and the red-can Liangcha drink produced by Jiaduobao. This fact should be respected and ascertained.

e. If one looks into the package and decoration of the well-known good with certain care, one would not deny that it clearly reveals that Jiaduobao is the producer of the good whereas there is no information reflecting the product has any connection with GPC or Dajiankang.
f. Valid judicial judgment has recognized Jiaduobao as the right holder of the contested package and decoration peculiar to the well-known good. Guangdong High Court held that "Guangdong Jiaduobao Beverage and Food Co. Ltd. has an exclusive right on the decoration peculiar to the well-known good, i.e. the 'Wanglaoji' Liangcha drink." Guangdong High Court (2003) Yue Gao Fa Min San Zhong Zi No. 212 Civil Judgment This can be used as a dispositive fact if there is no opposing evidence to overrule the valid judgment.
III. GPC and Dajiankang have no right on the contested package and decoration peculiar to the well-known good.
a. GPC and Hongdao Company (hereafter Hongdao) have a manifest agreement that GPC and its subsidiaries shall not use red color to cover its package of Liangcha drink and shall only use green paper box as its package.
b. GPC and its subsidiaries had neither produce or commission others to produce red-can Liangcha drink, nor contributed anything to the production and advertisement of the well-known good. Hence, they have no right on the well-known good.
c. GPC argues that Jiaduobao designs and uses the contested package and decoration peculiar to the well-known red-can good under its authorization. Therefore, the right on the package and decoration should be entitled to the trademark right owner. However, this arbitrary argument has no factual or legal basis.
d. GPC and its subsidiaries always try to take advantage of the reputation of the well-known red-can Liangcha drink produced by Jiaduobao to increase its sale of the green-box Liangcha drink produced by themselves.

e. GPC and Dajiankang argue that the red-can Liangcha drink produced by Jiaduobao becomes well-known good thanks to the goodwill of GPC's "Wanglaoji" trademark. But this is not the truth.
IV. Trademark right and the right on the package and decoration peculiar to well-known good are distinguishable. GPC and Dajiankang attempt to enlarge their trademark right to cover the right on the package and decoration, and then claim that they are the right holder of the trademark. This theory is without legal and factual basis.
a. According to the legislations and regulations regarding the right on package and decoration peculiar to well-known goods, trademark right is not a prerequisite for a design to be protected as package or decoration peculiar to well-known good. These two rights are independent of one another. Getting one right does not mean getting another simultaneously.
b. All evidence GPC submitted to prove that it is the right holder of the well-known good is actually evidence demonstrating GPC is the trademark right owner of the "Wanglaoji" mark. Thus, this evidence is irrelevant to the issue.
V. It will do no harm to GPC's right to use the "Wanglaoji" mark and cause no consumer confusion as to the source of the products if Jiaduobao is entitled to the right on the package and decoration peculiar to the well-known good. On the contrary, it will unreasonably facilitate GPC and Dajiankang, with no investment on effort or money, to capture the profits created by Jiaduobao if they are entitled to the right. Furthermore, it will lead to serious consumer confusion and severely disrupt the market order.
Finally, GPC and Dajiankang contribute nothing to the goodwill of the red-can well-known Liangcha drink. Therefore, entitling the right to Hongdao and Jiaduobao does no harm to GPC at all. By contrast, Hongdao and Jiaduobao have invested immeasurable resources on the management and marketing of the well-known good. Consequently, Hongdao and Jiaduobao will suffer inestimable loss, if the judgment enjoins them to continue using the package and decoration.

Guangdong High People's Court began to try this case on May 27, 2013.