OVERVIEW

This is a complicated trademark infringement case, involving a multinational corporation and a domestic industry leader, who later united together with other local corporations.

The plaintiff 3M Company (hereinafter referred to as "3M") is a multinational group involved in various fields, in which the stationery industry is included. In the 1980s, 3M creatively invented a kind of sticky note and used "报事贴 (Bao Shi Tie in Chinese)" as its trademark.

The defendant Deli Group Co., Ltd. (hereinafter referred to as "Deli") is a leading company in the domestic stationery industry. Deli started to manufacture and sell sticky notes in bulk with "百事贴 (Bai Shi Tie in Chinese)" mark since 2010, which greatly impacted the market share of 3M. 3M then requested Deli to cease the infringement by sending two demand letters. However, Deli refused to stop its infringement, and 3M had to initiate court actions to protect its trademark.

Chang Tsi & Partners (hereinafter referred to as "CTP"), after engagement, thoroughly studied the case, analyzed the requirements of 3M, proposed the litigation strategy based on the feedback of 3M, and filed a lawsuit before Shenyang Intermediate People's Court in 2016. During litigation, Deli, leveraging its influence and uniting many stationery giants, included "事贴 (Shi Tie in Chinese)" and "百事贴 (Bai Shi Tie in Chinese)" into the newly published national standards for Terminology and Classification of Stationery. Based on this, Deli claimed that "百事贴 (Bai Shi Tie in Chinese)" did not constitute trademark infringement for it was the generic name of the sticky note product. After a detailed analysis, our attorneys successfully identified a number of weaknesses in the defendant's evidence, proposed detailed statements and cross-examination opinions, and eventually persuaded the court of first instance to support the plaintiff's claims, including cease of infringement, destruction of inventories with a compensation for damages of CNY 1 million. During the second instance trial, Deli initiated the negotiation of settlement with 3M, and the two parties finally reached a settlement agreement. Deli undertook to compensate 3M with certain amount of money, stop using the "百事贴 (Bai Shi Tie in Chinese)" mark and destroy the inventory products. The agreement protected the interests of 3M to the greatest extent and achieved the purpose of litigation. The case has now been closed.

I. BACKGROUNDS

3M, a Fortune Global 500 company, involved in various fields, in which the stationery industry is included. In the 1980s, 3M creatively invented a kind of sticky note and used "报事贴 (Bao Shi Tie in Chinese)" as its trademark.

Deli, defendant in this case, is a well-known stationery company in China. It has been using the "百事贴 (Bai Shi Tie in Chinese)" mark on sticky note products since 2010.
CTP sent two C&D Letters to Deli, requesting it to cease the infringement, which was refused.

In 2016, 3M filed a lawsuit before Shenyang Intermediate People's Court, while Deli subsequently filed a jurisdictional objection and a review of jurisdictional objection to delay the trial of litigation. At the same time, Deli, as one of the main drafting unit of Terminology and Classification of Stationery, defined "百事贴 (Bai Shi Tie in Chinese)" as a generic name of sticky notes, and submitted it as evidence during the first instance trial. Based on the efforts of CTP attorneys, the case was finally closed with a total victory in the first instance and a favorable settlement in the second instance. The client was very satisfied with the result.

II. KEY POINTS

i) During the first instance trial, the Terminology and Classification of Stationery had been published and came into effect during the second instance trial, which was the critical defending evidence of Deli.

ii) Deli, leveraging its leading position in domestic stationery industry, produced evidence jointly with other industry giants, such as Shanghai Chenguang Stationery Co., Ltd. and Shenzhen Qixin Co., Ltd., and tried to exert pressure to the court.

iii) The mark "百事贴 (Bai Shi Tie in Chinese)" of Deli had coexisted with the trademark "报事贴 (Bao Shi Tie in Chinese)" of 3M for many years. 3M needed to submit sufficient evidence to prove that "百事贴 (Bai Shi Tie in Chinese)" had not formed any stable market order among the relevant public.

iv) According to relevant precedents, the accused infringement mark is not generally considered to be similar with Cited Mark, when both marks with no fixed meaning do not share similar first Chinese character or letter. The first Chinese character of both marks in this case is just different. Therefore, it is much more difficult to convince the court that the "百事贴 (Bai Shi Tie in Chinese)" and "报事贴 (Bao Shi Tie in Chinese)" constitute similar trademarks.

III. STRATEGIES

i) Given the facts that court attaches more importance to the Case-by-case Principle rather than mechanically following precedents, CTP managed to collect fame evidence of Cited Mark from multiple perspectives. For example, the judgments that courts had determined "事贴 (Shi Tie in Chinese) ending" marks constituted similar trademarks with "报事贴 (Bao Shi Tie in Chinese)" in administrative cases, the brand protection history of 3M, the media reports, and the recognition from other stationery companies could prove that "报事贴 (Bao Shi Tie in Chinese)", as the top stationery brand of sticky notes around the world, had extremely high reputation and influence. As a leading company in the same industry, Deli should have known about this brand and tried to avoid using similar trademark on same/similar products.

ii) To prove the distinctiveness of "事贴 (Shi Tie in Chinese)" through separate rulings. CTP collected a large number of relevant rulings, proving that most of the "事贴 (Shi Tie in Chinese) ending" marks were rejected or invalided. At the same time, 3M also submitted evidence to prove that other competitors also recognized that "事贴 (Shi Tie in Chinese) ending" marks constituted similar trademarks with "报事贴 (Bao Shi Tie in Chinese)", thus proving the word "事贴 (Shi Tie in Chinese)" is not a generic name.

iii) CTP approached to the Standardization Administration which published the national standards for Terminology and Classification of Stationery, successfully persuaded it to initiate proposal procedure for amending the relevant provisions, thus pressuring Deli heavily. Confronted with the dilemma of the lost in first instance and the change of national standards, Deli approached 3M for a settlement.

IV. SIGNIFICANCE

i) The reasonable defense to argue the similarity between two marks with no meaning and different first Chinese character

In judicial procedure, the court follows the Case-by-case Principle when judging on trademark similarity. Whether the coexistence of trademarks leads to confusion is a crucial factor to be taken into consideration. In specific cases, a large amount of fame evidence will increase the chance of success on recognizing the trademark similarity. For extraterritorial trademark holders, it is often difficult to collect evidence of use. Under such circumstances, it is advisable for right holders to make full use of the favorable judgments in trademark administrative cases.

ii) Rebutting the key evidence of the adverse party and seeking settlement of the case

It is an effective and efficient way to solve a case via settlement in difficult and complicated cases. The rebuttal of the core evidence of the adverse party is a fruitful way to force it to actively propose for a settlement. In light of the above, our research and communication on the source of the core evidence may help to find a breakthrough for the rebuttal.

iii) Right holders must actively defend their rights to prevent their trademarks from becoming a generic name of products.

Trademark holders, especially inventors of certain types of products, should assess the status of their trademarks on a regular basis. If the trademarks are at risk of dilution, they should take diversified legal actions to prevent their registered trademarks from becoming generic names.