Bright Dairy Accused of “Trademark Infringement”: A Legal Perspective of the Case

The lawsuit between Bright and Gourmet Master Co. Ltd. (hereinafter referred to as Gourmet) became a popular hashtag on Weibo (the twitter-like platform in China) on December 19, 2018, and later attracted wide attention from public opinion. Gourmet, the holding company of bakery chain store “85°C”, undertook legal proceedings against Bright for use of “85°C” on the package of Ubest fresh milk.

Case review

Brand was registered by Gourmet in 2003 in Taiwan. The company enter mainland China market in 2007.

Currently, Gourmet has become a well-known bakery and coffee brand with many shops around the country.

The defendant, Bright, is a well-known dairy company in mainland China, especially Shanghai. Fresh milk is one of the main characteristics of its products. Since March 2016, Bright launched a new fresh milk packaging box. Because the pasteurization technology adopted milk sterilization temperature control at 85°C, the number was including in the box as a way to inform consumers of the product feature.

Gourmet, however, stated that Bright applied a similar design to its trademark on the package of Bright’s Ubest fresh milk, and even highlighted “85°C” in their advertisement. Consequently, Gourmet sued Bright for trademark infringement in 2016; demanding to stop the infringement, and requesting to compensate for the economic loss of 5 million Yuan after the first-instance judgment. In view of that, Bright applied for an appeal to Shanghai Intellectual Property Court. After the second instance, Court dismissed the plaintiff's petition.

Case analysis

Allen Zhao, senior attorney at A&Z Law Firm, was entitled to represent Bright Dairy in the case. A&Z participated in both first and second trial procedures, and finally won the lawsuit.

Mr. Zhao explained that the case may seem to be less complicated in practice. Nevertheless, it is a classical case to be studied when it comes to China Trademark Law application.

Mr. Zhao illustrated that Bright’s advertising contained the following text: “pasteurized milk sterilized at 85°C.” This wording indicates that the particular word “85°C” is used to clarify the production temperature and product quality. According to China Trademark Law, an exclusive right holder of a registered trademark shall hold no right to prohibit other parties from legally using the description of a generic name, quality, function, quantity, weight, raw materials, place name, among other characteristics of a product, even if those are explicitly defined in its registered trademark.

In terms of design, Gourmet’s logo and Bright’s advertising text could be argued many similarities, however, the logo simply contains a generic number, and the publicity expressed a temperature number regarding the sterilization process that is relevant to inform consumers of the quality of the product. Despite the fact that “85°C” has been used by the bakery store in its trademark, it can only be protected when is associated to its application in similar stores. Yet, “85” is a number, and as such it can be used to quantify temperature, content, among other product features. Therefore, “85°C” can be legally used by other companies when describing certain qualities of the product such as temperature.

Suggestion from A&Z law firm

The core function of trademarks is related to identify the source of goods and services from being harmed and to ensure that consumers are not misled when purchasing good or enjoying services. In addition, customers may identify trademarks as the goodwill of the enterprise for product quality.

As enterprises are gradually becoming aware of Intellectual Property rights, including trademark registration and protection. Recently, trademark infringement disputes have increased in China, commonly cases involving trademark squatting (a phenomenon in which an entity registers a trademark in China with the specific intention of blocking future registration of that trademark), and counterfeiting cases.

From a legal perspective, it is recommended to register all trademarks in China, even those registered in other jurisdictions. Trademark registration is based on “first come, first serve” rule, and process can take about one year. IP lawyers conducting an initial investigation to determine if the trademark is already being use and which classes and sub-classes is a must. They can identify similarities with existent ones or if a company should consider to purchase the registered one. Moreover, before launching new products, packaging designs, and advertisements, enterprises are suggested to conduct a due diligence on products that are already selling, or have been sold on the market, with the aim to prevent the risk of trademark infringement and an unwanted outcome of a litigation process.