The plaintiff was agricultural company Dongfang Xianglin Vegetable Fruit Base Co Ltd, registered in Dongfang City, a small city in Hainan Province. In July 2000, the plaintiff filed an application for the registration of the Baiguoyuan trademark in Class 31, which was approved to be used in the designated goods of fruit, vegetables and fish, among others. The defendant was Shenzhen Baiguoyuan, an industrial development company registered in Shenzhen City in Guangdong Province. In 2008, the defendant filed an application for the registration of the word mark ‘百果园’ (‘Baiguoyuan’), to be used in Class 35 for the in-store use of its fruit shop. The defendant’s main business method is to set up chain stores throughout China. By 2018, the defendant owned nearly 3,000 fruit shops nationwide and had become one of the top 100 chain stores in China.

In 2018, the plaintiff sued the defendant in Quanzhou City, Fujian Province, demanding that nearly 3,000 of the defendant’s fruit shops stop using the word mark ‘百果园’ (‘Baiguoyuan’), and that the defendant pay Rmb90 million for the plaintiff’s economic losses. The defence opinions forwarded by the defendant included the following:

the word mark ‘百果园’ (‘Baiguoyuan’) used by the defendant is clearly different from the plaintiff’s registered trademark;
the category of trademark used by the plaintiff and the defendant is different – the plaintiff’s trademark is a commodity trademark, while the defendant’s trademark is a distribution service trademark; and the plaintiff and the defendant have different business models.

The plaintiff is an agricultural enterprise and most of its fruit plants are sold in batches for self-production. However, in the consumer market, especially in retail, consumers cannot see the plaintiff’s trademark. In addition, the defendant only uses the trademark in its own fruit chain stores. The market is specific. Consumers cannot buy the defendant’s fruit through other consumption channels. Therefore, the plaintiff and the defendant’s markets are completely isolated. Consumers could not confuse or misidentify the plaintiff’s trademark with the defendant’s trademark, and there is no significant competition between the plaintiff and the defendant. After more than 10 years of continuous and extensive use of the defendant’s registered trademark, especially through the development of the defendant’s chain business, it gained significant popularity and reputation in the relevant market, while the plaintiff’s trademark has not entered the consumer retail market. The plaintiff’s goods have not been sold in supermarkets or any specialised shops, meaning that there could be no trademark confusion.

The Quanzhou Intermediate Court in Fujian Province confirmed the following facts:

• The retail service of commodities falls within the scope of Category 35 in the Classification Table of Goods and Services.
• The defendant and its authorised shops use ‘百果园’ (‘Baiguoyuan’) as a logo or words, which is a lawful use of its own Registered Trademark 6807648 within the scope of the approved service items.
• The defendant’s use of the ‘百果园’ (‘Baiguoyuan’) logo or words through its official websites, computer software, third-party platforms and other media in the computer network environment of its shops is an extension use of the commodity retail service provided by the defendant. The use should also be regarded as lawful use of Registered Trademark 6807648 within the scope of the approved service items.
• Even if the logo actually used by the defendant and its shops authorised to use the trademark contains the word ‘百果园’ (‘Baiguoyuan’) and the trademark of the plaintiff also contains the word ‘百果园’ (‘Baiguoyuan’), it could not be considered that the defendant used a trademark similar to the plaintiff’s trademark in the 31st category, because the goods and services provided by the plaintiff and the defendant are separately the front and the back end of an industrial chain – in fact, the two companies did not enter into each other’s business field or scope.
• The defendant’s trademark was officially recognised as a well-known trademark in China at the end of 2017 and is therefore considered to have a high reputation. The first-instance judgment held that, on condition that both the plaintiff and the defendant held a registered trademark in their respective business scopes, the use of their trademarks was not similar and could not be confused. Accordingly, the first-instance court rejected all claims of the plaintiff.
• The plaintiff refused to accept the first-instance judgment and filed an appeal with the Fujian High Court, requesting the second-instance court to revoke the first-instance judgment and to support the plaintiff’s request in the first instance. After the trial, the second-instance court maintained all the facts ascertained in the first instance, and further confirmed that the defendant was not a production-oriented company, but a retail-oriented company. The purpose of the defendant using the trademark ‘百果园’ (‘Baiguoyuan’) in both the shops and online environments is not to lead consumers to identify the source of the goods, but to show that it is a unique retailer. Therefore, the defendant’s actions will not cause consumers to confuse the trademark used by the defendant with the plaintiff’s trademark.

Throughout these trademark infringement cases, due to the different places and business models of the trademark used by the plaintiff and the defendant, a pattern and scope could be distinguished in the market, particularly due to the fact that the defendant’s trademark is well-known and has a high reputation following long-term use, consumers could have a clear understanding of the relevance of the respective trademarks. Therefore, there should be no confusion and the actions of the defendant do not constitute infringement of the plaintiff’s mark.