New Zealand company wins kiwi fruit trademark infringement case

The Shanghai First People’s Intermediate Court has ordered a Chinese kiwi fruit producer to pay damages to Zespri Group Ltd, the world’s largest kiwi fruit marketer, for infringement of its trademark (June 23 2008).

Zespri, which is located in New Zealand, owns two Chinese registrations for the trademark ZESPRI (and sun design). The marks were registered in relation to kiwi fruit and other fruits and vegetables.

Nantong Xishu Fruit Trading Co Ltd produces, distributes and promotes kiwi fruit under the trademarks ZNISHIO (and sun design) and NISHIO (and sun design). In 2006 the owner of Xishu applied for the registration of:

ZNISHIO (and design) and NISHIO (and design) as trademarks; and
associated packaging as a design patent.

Despite an administrative action, which resulted in the seizure of its packing boxes and labels, Xishu continued to use the marks.

Zespri filed suit against Xishu before the Shanghai First People’s Intermediate Court, seeking damages of Rmb300,000 (approximately $44,000).

The court held that Zespri’s kiwi fruit had established a strong market reputation and that the marks used by Xishu on its kiwi fruit were markedly similar to Zespri’s marks. As a result, consumers were likely to believe that Xishu’s products originated from, or were connected with, Zespri.

The court rejected Xishu’s claims that:

there was a trademark/design patent and a trademark/trademark conflict between Zespri and Xishu; and
Zespri had no right to file a claim of civil infringement.

The court held that:

Xishu had no rights in the ZNISHIO and NISHIO marks (as the trademark office had not reached a decision on the trademark applications); and
Zespri’s trademark rights predated Xishu’s design patent rights.

As it was difficult to calculate Zespri’s losses or Xishu’s profits, the court took the following into account in accepting Zespri’s claim for damages:

the duration and particular circumstances of the infringement;
Xishu’s conduct;
Zespri’s reputation; and
the reasonable costs incurred by Zespri in endeavouring to put an end to the infringement.

This decision should give further encouragement to trademark owners looking to enforce their rights in China. The court enforced trademark rights against what might be described as a ‘smart copy’, and made a compensation award that included a significant part of the legal costs that had been incurred by the plaintiff.

Jin Ling, Rouse & Co International, Shanghai

New Zealand company wins kiwi fruit trademark infringement case

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