Shanghai is a city known not only for its epic skyline, extravagant people and architecture but also for its world's famous soupy dumplings named "Xiao Long Bao" (小笼包).
These soup dumplings are the main characters of a trademark infringement and unfair competition dispute that took place recently regarding the use of the word "Nanxiang Xiaolong" (南翔小笼).
Nanxiang Xiaolong (南翔小笼 ) is a landmark snack in Shanghai. For a long time, "Nanxiang" brand's popularity has been expanding, and won the honor of "time-honored Chinese brand".
However, what many diners do not know is that there are actually two companies in Shanghai that use the "Nanxiang" (南翔) trademark at the same time. One is a restaurant and the other is selling frozen goods.
In August 2020, litigations were brought by both parties against each other, respectively in Pudong Dist. Court and Yangpu Dist. Court.
|
Court |
Shanghai City Pudong Dist. Court |
Shanghai City Yangpu Dist. Court |
|
Plaintiff: |
1. Shanghai Yu Yuan Nanxiang Steamed Buns Co (上海豫园南翔馒头店有限公司) 2. Shanghai Old-Town Temple Restaurant (Group) Co (上海老城隍庙餐饮（集团）有限公司) [hereinafter collectively referred to as Yu Yuan] |
Shanghai Nan Xiang Food Co., Ltd. (上海南翔食品股份有限公司) [hereinafter referred to as [Nan Xiang Food]] |
|
Defendant: |
Shanghai Nanxiang Food Co. Ltd. (herein Shanghai Nanxiang Food) and its 3 franchisers |
Shanghai Yuyuan Garden Nanxiang Steamed Buns Co (上海豫园南翔馒头店有限公司) and its 3 associating parties |
|
Cause of Action |
Trademark Infringement and Unfair Competition |
Unfair Competition |
Judgement on both cases has been issued recently, where Pudong Dist. Court awarded Yu Yuan 2 million damage and 342 thousand reasonable costs, and Yangpu Dist. Court rejected the claim of the plaintiff.
On the one hand, Yu Yuan is the owner of the trademark "Nan Xiang", approved in class 43 for "restaurant".
No. 772405 "Nan Xiang" trademark registered in 1994
On the other hand, Nan Xiang Food is the trademark owner of a different form of "Nan Xiang" in class 30 for "vegetable buns; Steamed dumpling. Spring rolls. Wonton; Nan Xiang Steamed Buns;".
No. 260205 "Nan Xiang" trademark registered in 1986
In 2019, Yu Yuan found that Nan Xiang Food is operating catering services, which is out of the scope of business of its registered trademarks. During the operation of the restaurant, Nan Xiang Food used the "Nan Xiang" and "Nan Xiang Xiao Long" signs on the signboard, interior decoration, posters, tableware and other items.
Defendant: Shanghai Nanxiang Food Co. Ltd
Yu Yuan claimed that this action infringed his exclusive right to use the service trademark and also constituted unauthorized use of its service name with certain influence. At the same time, Nan Xiang Food's use of phrases such as "100-year-old Nanxiang" in the advertisement also constituted false advertising.
Plaintiff: Shanghai Yuyuan Garden Nanxiang Steamed Buns Co (hereinafter referred as Shanghai Yuyuan) and
its stakeholder Shanghai Old-Town Temple Restaurant (Group) Co.
Nan Xiang Food argued that they are the owner of "Nan Xiang" trademark in class 30 for "xiaolongbao, wontons" and other commodities. This trademark was also awarded "China Time-Honored Brand" in 2011.
In the meantime, Nan Xiang Food also has the right of using its tradename. And the use of "Nan Xiang" on the signboard refers to a geographical location Nanxiang Town.
Shanghai Pudong Court held that the service trademark held by the plaintiff and the commodity trademark held by the defendant are two different trademark categories.
Usually, commodity trademark is used to identify the source of goods, and it is directly marked on tangible goods, while service trademark is used to identify service providers. Based on the intangible characteristics of services, it is often attached to the signs, tools and other goods related to services.
The defendant frozen food
Nan Xiang Food's use of "Nan Xiang" on the signboard, tool for service and franchising went beyond the necessary scope of identifying themselves as source of goods.
And on the premise of knowing that the Yu Yuan's service trademark has a high reputation, Nan Xiang Food still overstepped such boundary, resulting in confusion and misunderstanding, which constitutes an infringement on the exclusive right of Yu Yuan's service trademark.
At the same time, the court held that the goodwill obtained by the service name is inseparable from the goodwill carried by the registered trademark, so the anti-unfair competition law no longer provides the same protection in the field protected by the trademark law.
The trademarks of both parties coexisted for a long time, and both of them have been awarded "China Time-Honored Brand" and other honors. Both parties have made contribution to the good reputation of "Nan Xiang" brand, and the corresponding market structure and legal order have been formed and recognized and accepted by the public.
Therefore, considering the formation and development history of both parties and the coexistence of "Nan Xiang" trademark, it is not appropriated to regard the Nan Xiang Food's behavior as unfair competition of false advertising.
We learned that last month, Yangpu Dist. Court also made the unfavorable decision against Nan Xiang Food, rejecting all of its claims.
We look forward to seeing the court opinion when it's published.
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