Recently, Beijing Haidian District People's Court concluded a trademark infringement and unfair competition case between Cadbury UK Limited and Yikoulian Xiamen Food Company. The Court in its first- instance judgment held that the act of Yikoulian Company constituted trademark infringement and unfair competition, ordering Yikoulian to cease infringing Cadbury's 怡口蓮 (Note: Chinese pronunciation Yikoulian) trademarks, change its trademark name, publish a statement and remove ill effects and indemnify some 2.43 million yuan in damages and reasonable costs. As of publication, the case is open for appeal.

Cadbury argued that it is one of the largest candy companies in the world and had obtained registration for 怡口蓮 trademarks in multiple classes. The defendant produced, sold and advertised sandwich rice crackers affixed with 怡口莲 trademark, which was similar to 怡口蓮 trademark in fonts and design styles and would confuse the relevant public, and the 怡口莲 trademark had been declared invalid. The act of Yikoulian Company constituted trademark infringement. In addition, Yikoulian Company used 怡口莲 as its trade name and had the intention of free- riding Cadbury's good reputation, causing confusion for the public and constituting unfair competition.

Yikoulian argued that although the 怡口莲 trademark was declared invalid on September 20, the act of using the trademark during validity period was legal and it should not assume any liability. Rice crackers with the 怡口莲 trademark are products similar with candies on which the trademark 怡口蓮 is used. That would neither confuse the relevant public nor damage the legal rights of Cadbury. The company has already obtained registration of 怡口莲 on classes associated with its mainstream products, rendering freeriding Cadbury's reputation groundless.

After hearing, Haidian District People's Court held that evidence indicated that sandwich rice crackers with the 怡口莲 trademark were still on sale after having been invalidated. The 怡口莲trademark is identical with the 怡口蓮 trademark in characters formation, pronunciation and meaning and both of them were certified to be used on daily food, which was closely related. So

Yikoulian infringed the Cadbury's trademark rights when using the 怡口莲 trademark on its goods after September 20 this year. Meanwhile, the sales channels of the sandwich rice crackers with 怡口莲 trademark were almost the same as that of the candies with 怡口蓮 trademark, which would confuse consumers. Yikoulian's act constituted unfair competition. In this connection, the Court made the above judgment.

AFD China Newsletter is intended to provide our clients and business partners information only. The information provided on the newsletter should not be considered as professional advice, and should not form the basis of any business decisions.