Pepsi guilty of trademark infringement

In Zhejiang Lanye Liquor Co Ltd v Pepsi (China) Co Ltd (May 24 2007), the Zhejiang Higher People's Court has held that Pepsi (China) Co Ltd's Blue Storm promotion campaign infringed the plaintiff's BLUE STORM trademark.

Pepsi launched a nationwide promotion called 'Blue Storm' in June 2005. Six months later, Zhejiang Lanye Liquor Co Ltd filed a lawsuit in the Hangzhou Intermediate People's Court claiming that Pepsi had infringed its registered trademark BLUE STORM. The first instance court found in favour of Pepsi, holding that using Blue Storm as a campaign name was distinct from use as a trademark, and that consumers would thus not be misled.

On appeal, the Zhejiang Higher People's Court reversed the decision. It held that Pepsi had arbitrarily used 'Blue Storm', together with its own logos and trade names on packaging and in commercials during the promotion, and that such use was sufficient to create a special connection between 'Blue Storm' and Pepsi in consumers' minds. If such use were permitted to continue, the reputation and trademark value that Lanye Liquor had been developing would be destroyed. The court held that Pepsi had infringed Lanye Liquor's exclusive rights to use the trademark BLUE STORM and ordered Pepsi to pay compensation of Rmb30,000 (approximately $4,000) to Lanye Liquor.

Jin Ling, Rouse & Co International, Beijing