Trademark Dispute in Xi’an

July 22, 2003

Trademark Dispute in Xi’an

On July 21st, a trademark dispute case commenced in Xi’an’s intermediate people’s court. The defendant was a prominent liquor company, the Sichuan Wuliangye group. The case marked the largest trademark dispute the province has witnessed in years. Wuliangye Group was sent to court by Wanshui Nutrition project Company (hereafter referred to as Wanshui company).

In the pleadings:
Wanshui Company claimed that the trademark “Wanshui” was assigned to them in 1996 by another beverage company. The application of trademark falls under the 33rd division of international classification. The 33rd division permits Wanshui to use the trademark in its alcohol drinks, but also to permit other companies the use of its trademark for a certain fee.

On October of 2001, the Wanshui Company noticed that some of the trademark assignees and distributors had terminated the relationship and the contract due to the fact that Wuliangye Group Co. had started promoting its products using the exact same brandname. Wanshui accused Wuliangye Group Co. of wrongfully stealing market share from Wanshui and causing a significant drop in its sales volume. After rounds of negotiation between the two sides, Wanshui Company took Wuliangye Group to court. They claimed that the defendant should stop using the brand name and selling its products, and furthermore compensate them for the loss of 15,780,000 RMB.

The court has now started the process of investigation in the case. Wuliangye admitted that there might be some wrongdoing in its operations, but insists that the plaintiff has greatly exaggerated its monetary loss suffered. Moreover, Wuliangye stated that they produced fragrant type liquor, while Wanshui Company produced “health care wine” which is not listed in the scope of application of its trademark. The Wuliangye Group believes that their behavior has not lead to the encroachment of anyone’s intellectual property rights. The case is still in the course of trial.