Supreme People's Court decision highlights importance of trademark registration

China

In Wing Wah Cake Shop Limited v Guangdong Shunde Sushi Ronghua Foods Factory, the Supreme People’s Court has overturned decisions of the lower courts finding that Wing Wah Cake Shop's mooncake mark was well known.

In 1999 Wing Wah Cake Shop filed a lawsuit against a Guangdong company, Guangdong Shunde Sushi Ronghua Foods Factory, before the Guangdong Foshan Intermediate Court for unfair competition and trademark infringement. Wing Wah Cake Shop prevailed in that suit. In 2006 Wing Wah Cake Shop sued the defendants in the present case based on the same grounds, alleging that the latter had again infringed its trademark rights and breached the Anti-unfair Competition Law. The case was heard by the Dongguan Intermediate Court and was appealed by Shunde Sushi. The courts rendered their decisions in Wing Wah Cake Shop’s favour in 2007.

However, in an unexpected turn of events, in September 2012 the Supreme People’s Court not only revoked the lower courts' decisions with regard to the well-known status of the mark, but was also completely silent on Wing Wah Cake Shop's claim for unregistered trademark protection under the Anti-unfair Competition Law.

Wing Wah Cake Shop is a well-known, traditional Chinese-style confectionery shop established in the early 50s in Hong Kong. Wing Wah Cake Shop has been using the marks 荣华 (meaning 'prosperity, Chinese'; pronounced as 'rong hua' in Putonghua and 'Wing waa' in Cantonese) and 荣华月饼 ('rong hua yue bing', meaning 'prosperity, Chinese, mooncake') (the Wing Wah/Wing Wah Mooncake marks), as well as different labels, for their mooncake products. In the 60s and 70s, Wing Wah Cake Shop expanded its business into the United Kingdom, the United States, Canada, Australia and Southeast Asia, and has dipped its toe into the Chinese market since 1966. Wing Wah Cake Shop has arguably obtained a certain level of fame in China and has received a number of industry awards. Wing Wah Cake Shop registered its mooncake labels with the Chinese Trademark Office in December 1999.

In September 1999 Wing Wah Cake Shop initiated proceedings against Shunde Sushi for unfair competition before the Guangdong Foshan Court, alleging that Shunde Sushi had imitated the Wing Wah/Wing Wah Mooncake marks and Wing Wah labels and used them on its products, even though defendant Su owned his own registration for the stylised 荣华 mark (Registration 533357) in Class 30 (the Ronghua mark). In April 2000 the Foshan court recognised that the Wing Wah mooncake was a famous product and that Wing Wah Cake Shop’s Wing Wah labels constituted famous product packaging under the Anti-unfair Competition Law.

In October 2006 Shunde Sushi was again sued by Wing Wah Cake Shop, as Shunde Sushi and its licensee Jinming Foods Co Ltd used the Wing Wah/Wing Wah Moon Cake marks and Wing Wah labels on their mooncake products. The Guangdong Intermediate Court held that the defendants had infringed the Wing Wah labels, and recognised that the Wing Wah mark was a well-known unregistered mark, as it fulfilled the requirements for being a well-known trademark. Therefore, the defendants were liable for trademark infringement. The defendants appealed to the Guangdong People’s Higher Court. The court upheld the decision of the lower court, but held that the Wing Wah Mooncake mark, rather than the Wing Wah mark, was well known.

The decision was appealed to the Supreme People’s Court. In September 2012 the court overruled the lower courts’ decisions, holding that both the Wing Wah Mooncake and Wing Wah marks should not be recognised as well-known trademarks.

It seems that the Supreme People’s Court watched the dispute with folded arms, as its decision is silent on the protection of unregistered trademarks, which has been available in China for decades. Wing Wah Cake Shop’s position is now unclear, but the dispute between the parties appears to continue: Wing Wah Cake Shop is still trying to register its Wing Wah/Wing Wah Mooncake marks, but the Ronghua mark keeps preventing registration. Further, Shunde Sushi has become more aggressive, issuing warning letters to 19 shops belonging to Wing Wah Cake Shop in China, asking them to stop selling mooncake products under the Wing Wah/Wing Wah Mooncake marks.

China is a 'first-to-file' registration regime. Although unregistered rights are recognised, the owner of an unregistered trademark would need to provide evidence of extensive use and a high level of reputation to demonstrate that its mark has acquired well-known status under the Trademark Law or that its goods are well-known products under the Anti-unfair Competition Law. To avoid being challenged and reduce risks, it is advised to apply for registration of the marks in the relevant classes as early as possible - it would be penny-wise and pound-foolish to rely on trademark use, rather than trademark registration, to protect oneself against infringement. 

Ai-Leen Lim and Lawrence Yeung, Bird & Bird, Beijing

Get unlimited access to all WTR content