OVERVIEW

This case is a trademark infringement case with significant influence in the industry from 2019 to 2020.

The Plaintiff Dongfang Xianglin Vegetable &Fruit Base Co., Ltd. (hereinafter referred to as "Dongfang Xianglin") with its trademark right of "百果园" (Bai Guo Yuan in Chinese) in class 31 on fruit, filed a lawsuit with the Quanzhou Intermediate People's Court of Fujian Province, claiming that the defendant Shenzhen Pagoda Orchard Industrial Development Co., Ltd. (hereinafter referred to as "Shenzhen Pagoda Orchard ") used the trademark "百果园"(Bai Guo Yuan in Chinese) on fruit sales services which constituted infringement, with a claim amount of nearly 100 million. At the same time, the plaintiff also filed more than ten small claims infringement lawsuits against the defendant's different distribution stores with Xiamen Intermediate Court (each case claimed compensation of 20,000 yuan).

Chang Tsi & Partners, after entrustment by the defendant Shenzhen Pagoda Orchard, immediately conducted in-depth communication with the defendant, and carefully studied the plaintiff's evidence, business status, and the registration of the defendant's business name and the registration, actual use of the trademark "百果园"(Bai Guo Yuan in Chinese). After a detailed analysis, our attorneys carefully designed the response strategy, evidence collection plan and negotiation strategy, seriously participated in the litigation activities at each stage of the case, successfully convinced the court to support the defendant's defense claims, and rejected the plaintiff's entire claims in the first instance. On request, the second instance verdict upheld the original judgement.

I. DIFFICULTIES

i) The plaintiff had the trademark “百果园” (Bai Guo Yuan in Chinese) previously registered in class 31 with relatively stable right base (a person not involved in this case applied for cancellation of this trademark for not having been used for three consecutive years without justification but failed); Both the defendant ’s business name and the trademark “百果园” (Bai Guo Yuan in Chinese) in class 35 were registered later.

ii) The plaintiff claimed a large amount of compensation, and the defendant's fruit chain specialty store had a huge scale of operation (the defendant is currently the largest domestic high-quality fruit retail enterprise, and its main business model is franchising. When the plaintiff sued, the defendant already had more than 3,000 physical chain stores in China), if the defendant loses this case, the defendant's operation will face great difficulties and risks.

iii) The defendant had been trying to settle with the plaintiff since receiving the court materials, but the plaintiff firmly refused to settle. Judging from the litigation methods and strategies adopted by the plaintiff, the plaintiff had always hoped to obtain huge awards in this case, or forced the defendant to pay huge compensation.

II. STRATEGIES

In order to maximize the protection of the client's legitimate rights and interests of Shenzhen Pagoda Orchard, Chang Tsi & Partners formulated the following litigation strategies:

i) Submitted a jurisdictional objection in time to get more time for the defendant to prepare for the lawsuit.

ii) Regarding the plaintiff's abuse of litigation rights (in this case, a large amount of compensation was claimed, and more than ten small claims civil lawsuits were filed with Xiamen Intermediate People's Court), wrote and submitted reports to Fujian high court, requesting that all cases be directly removed to the Fujian High People's Court so as to avoid conflicting first-instance decisions by different intermediate courts.

iii) Negotiated with the plaintiff on behalf of the client, striving for a beneficial outcome to the client.

iv) Filed a cancellation application of the involved trademark for not having been used for three consecutive years without justification.

v) Actively collected the evidence of the plaintiff’s poor operating conditions, proving that the plaintiff’s improper purpose of the lawsuit in this case.

vi) Actively collected the evidence of the defendant's use patterns of the trademark "百果园" (Bai Guo Yuan in Chinese) and the service trademarks when shopping malls and supermarkets provided fruit retail services, and worked hard to persuade the court that the defendant‘s use of the trademark "百果园" (Bai Guo Yuan in Chinese) in class 35 was standard usage behavior.

vii) During the trial of the case, it was emphasized that: (1) the plaintiff's trademark involved in this case lacked in distinctiveness and was not actually used in the market, not playing a role in identifying the source of the goods; (2) the "百果园" (Bai Guo Yuan in Chinese) trademark used by the defendant was not similar to the plaintiff's trademark (3) The "百果园" (Bai Guo Yuan in Chinese) trademark used by the defendant is the standard use of its well-known registered trademarks in class 35; (4) Because the plaintiff's trademark involved in the case had not been used in the market, the defendant's "百果园"(Bai Guo Yuan in Chinese) trademark had formed a stable market structure and the defendant's use of the disputed trademark could not cause market confusion: (5) the defendant did not have the subjective intention of free riding with the plaintiff, misleading the public; (6) the plaintiff had bad faith in this and other series of lawsuits; (7) ) The plaintiff had no evidence to prove the damage.

viii) Actively collected the precedents in favor of the defendant to support the defendant's defense.

III. SIGNIFICANCE

i) This case is a case in which a small company sued a large company and claimed sky-high compensation, which attracted a lot of attention from the society.

ii) The core legal issues involved in this case are the hot and difficult issues in trademark law, which have always been controversial. What is the scope of protection of service marks in class 35? How to judge the similarity of class 35 of services with other classes of goods or services? In other words, after the right holder registers a trademark on other goods or services, can it prevent others from using the trademark in class 35 of services? Both the first and second instance judgments in this case determined that the defendant's use of "百果园" (Bai Guo Yuan in Chinese) was the standard use of its registered trademarks in class 35, and provided a classic example for the trial of such cases in the future.

iii) The trial in this case provided a classic textbook-like example for judging trademark similarity, similarity of goods, and likelihood of confusion.

iv) The winning of this case greatly encouraged the defendant's confidence in operating with integrity and developing and expanding the scale of operations, and discouraged the plaintiff's attempt to get something for nothing, which was conducive to maintaining normal market economic order and establishing a good social custom.