Nestlé victorious in baby food case

In the dispute between Société des Produits Nestlé SA and Royal Numico Dumex over trademarks for baby food, the Beijing First People's Court has found in favour of Nestlé (March 12 2008).

In September 2007 Nestlé, the multinational packaged food company, sued its milk powder rival Dumex for trademark infringement and unfair competition in the Beijing First People's Court. The marks at issue were:

• a figurative mark consisting of a shield device; and
  
  
• a mark consisting of the Chinese characters for 'golden shield'.

Nestlé alleged that it had registered the shield device worldwide on December 11 2001. The device was subsequently registered at the Chinese Trademark Office on February 22 2006 for goods in Class 5 of the Nice Classification (including "food for babies"). Additionally, Nestlé alleged that it had applied for registration of the Chinese characters mark in China on February 20 2006. Although registration was still pending, the Chinese characters mark had been used extensively for Nestlé's milk powder products.

Nestlé claimed that Dumex had used without authorization a device similar to the shield mark on the packaging of its products. The Chinese characters for 'golden shield' were also used on Dumex's products, website and other marketing and advertising materials in a conspicuous manner. Nestlé submitted that such use would mislead consumers into believing that there was a link between Nestlé's products and those of Dumex, thereby creating confusion as to the origin of the goods. Further, Nestlé claimed that Dumex's actions would seriously affect Nestlé's marketing of its products and thus damage its normal business activities.

In its defence, Dumex contended that it used the shield device and the Chinese characters for 'golden shield' only to indicate the function of its products and assist consumers in differentiating between different lines. Further, Dumex submitted that it was free to use the Chinese characters as they had not been successfully registered in China.

The Beijing First People's Court found in favour of Nestlé. First, it held that Dumex's milk powder products were similar to the products for which Nestlé had registered the shield device. Second, the court stated that the combination of the device and Chinese characters used on Dumex's products was similar to Nestlé's shield device. Accordingly, Dumex had infringed Nestlé's exclusive right to use its registered shield mark. The court thus ordered that Dumex stop using the device and pay Nestlé a total of Rmb200,000 as compensation.

Kenny Wong, JSM, Hong Kong