SPC Rules JDB & GPHL to Use Jointly the Red-can Trade Dress on WongLo Kat
China Supreme People’s Court has brought an end to the trade dress dispute used on the red-can unique design of “Wong Lo Kat” herbal tea drink product between Guangdong Jiaduobao Drink & Food Co., Ltd. (hereinafter “JDB”), and Guangzhou Wanglaoji Pharmaceutical Co., Ltd. (“WLJ”), Guangzhou Pharmaceutical Holdings Limited (“GPHL”) on August 16, 2017, concluding that ?both parties should share the rights to use the subject trade dress design on Wong Lo Kat without damaging any third party’s legal right , considering these two parties have contributed together on this unique package design until developing the famous products.
As early as July 6, 2012, GPHL and JDB respectively brough teach other to court, claiming rights on the subject unique red-can trade dress and suing the counterpart for trade dress infringement. Guangdong High People’s Court has trialed the first instance and held that GPHL should own the legal rights on the trade dress, while JDB is constituting the infringement activity against GPHL, and thus JDB should stop the infringement immediately, eliminate the bad impact caused by their infringement, and compensate GPHL RMB 150,000,000 (approx. USD $22.5 million) plus RMB 260,000 (approx. USD $38,800) for reasonable expenses to stop such infringement.
JDB was unsatisfied with the first instance judgment and appealed to the Supreme People’s Court. SPC holds that ?the red-can package design of Wong Lo Kat herbal tea product, consisting of yellow Chinese characters of Wong Lo Kat with a red background, is an unique packaging of famous product. As the trademark owner of “王老吉” (Wong Lo Kat in Chinese mark), GPHL argued that relevant consumers certainly attribute the red-can trade dress to the registered trademark as the origin of the products, and such attribution is unlikely to be swung by choice of formula or taste. However from the perspective of JDB as the former operator of Wong Lo Kat herbal tea, they thought the trade dress and trademark should be separated when being discussed, and ?consumers prefer JDB’s product for its unchanged taste and thus relate the red-can trade dress to JDB.
SPC deemed that taking into account the history and development of the subject red-can trade dress, the consumers’ recognition and the principle of equity, both JDB and GPHL have respectively contributed importantly to such achievement from its formation, development and reputation, and it would prove unfair and possibly damaging to public interests if the involved trade dress rights are to be completely owned by either side. Consequently, the Court made the final judgment that the subject trade dress on the red can should be jointly used by both JDB and GPHL pursuant to the principle of good faith, and reject their claims of trade dress infringement with cease of use from the counterparts.
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