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“Cai Die Xuan” Trademark Dispute Closed

Recently, the Anhui High People's Court made a final decision on the trademark infringement and unfair competition case lodged by Liang Huo and Lu Yijian, the legal representative and general manager of Guangdong Zhongshan Cai Die Xuan Food Co., Ltd., against Anhui Cai Die Bakery Co., Ltd, Hefei Cai Die Xuan Enterprise Management Service Limited Company, and Anhui Ba Li Tian Tian Food Limited Company, where the court rejected Liang Huo and Lu Yijian's appeal and upheld the judgment of first instance.

Zhongshan Food Corporation Cai Die Xuan was established in 1987, its legal representative was Lu Yijian, and its business license was withdrawn in 2003.

On 28 October 1999, the SAIC Trademark Bureau approved the registration of the "Cai Die Xuan" trademark by Zhongshan Food Corporation Cai Die Xuan to be used for classification 30 products, including coffee, tea, syrup and cake powder. On 14 April 2001, this registered trademark was transferred to Zhongshan Shiqi Hong Ji Food Factory.

On 7 August 2002, Liang Huo set up Zhongshan Cai Die Xuan Food Co., Ltd, its approved scope of business was producing and selling European style cakes and pastries.

On 14 September 2003, Lu Yijian and Liang Huo received the registered trademark "Cai Die Xuan" from Hong Ji Food Factory.

From 2004 to 2010, the SAIC Trademark Bureau gave approval for Liang Huo and Lu Yijian to register trademarks that included a butterfly figure, the Cai Die Xuan characters and "Cai Die Xuan Cate," while receiving 9 graphics, characters and pinyin trademarks with different formats and contents under classification 30 and classification 43.

Liang Huo and Lu Yijian authorised Zhongshan Cai Die Xuan Food Co., Ltd. to use their registered trademark and filed with the SAIC Trademark Bureau. In 2010, Trademark No. 3422492 was considered a famous Guangdong trademark by the Guangdong Adminsitrative Bureau for Industry and Commerce.

On the other hand, Hefei Cai Die Xuan Food Limited Company was established on 8 June 2000, and its scope of business included cake production and sales. Later on this enterprise changed its name to Anhui Cai Die Xuan Bakery Co., Ltd. Cai Die Xuan Service Company and Ba Li Tian Tian Company were established in 2005.

On 28 October 2003, Hefei Cai Die Xuan received the service trademark "Cai De Xuan" in clerical script, its scope of service was advertising and hotel management. On 7 May 2006, the SAIC Trademark Bureau approved the transfer of this registered trademark to Cai Die Xuan Service Company.

From August 2002, Hefei Cai Die Xuan Company received many awards in Anhui province for its cakes, bread and moon cakes.

In September 2012, Zhongshan "Cai Die Xuan" released news and stated that Anhui Cai Die Xuan had violated their company's name and trademark because it had used the characters "Cai Die Xuan" and the butterfly graphic which belonged to their company.

Later on, Liang Huo and Lu Yijian lodged a lawsuit in Hefei Intermediate People's Court and asked Anhui Cai Die Xuan Bakery Croup Co., Ltd (hereinafter referred to as Cai Die Xuan Group) and its three subsidiary companies to stop infringing Liang Huo and Lu Yijian's exclusive right to use their registered trademark; the Cai Die Xuan Group and Cai Die Xuan Service Company to immediately stop using (including changing and withdrawing) "Cai Die Xuan" in their company name, stop using the "Cai Die Xuan characters and butterfly graphic" in their website during operations, and stop its unfair competition; the three defendants were to dismantle and dispose all logos, signboards, posters, advertising boards and other publicity materials as well as external packagings of products which had the "Cai Die Xuan characters and butterfly graphic;" as well as compensate RMB 15 million to Liang Huo and Lu Yijian.

On 3 June 2013, the Hefei Intermediate People's Court made a judgment of first instance to reject Liang Huo and Lu Yijian's claim. The two plaintiffs were dissatisfied with the judgment and appealed in Anhui High Court.

Anhui High Court held that prior rights protection is a basic principle in resolving intellectual property rights conflict. Anhui Cai Die Xuan Group was entitled to prior rights to use the logo "Cai Die Xuan." When Cai Die Xuan Group and Cai Die Xuan Service Company used "Cai Die Xuan" in their company name and used it in their business operations, they did not have the intention to play up the other's trademark, nor did they have malicious intent related to "free riding" or "faking famous brands." The plaintiffs and defendants had run their businesses in different regions for quite long, and their customers were neither confused nor misled. Liang Huo and Lu Yijian did not have any relations corresponding to providing the same goods or services, nor did specific competitive relations exist, thus Liang Huo and Lu Yijian did not meet the subjective elements to submit an unfair competition lawsuit.

Therefore, Anhui High Court made the final judgment to reject Liang Huo and Lu Yijian's appeal and to uphold the original judgment.

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