2017-09-27 12:16:10

A time-honored Chinese bakery brand almost lost out on this year’s peak pastry season after a court ruled it potentially infringed on its rival, which goes by the same name.

The Beijing Intellectual Property Court issued an injunction Friday against Suzhou Daoxiangcun Company, ordering the pastry maker to remove its products from e-commerce platforms because they possibly infringed on the trademark of its rival, Beijing Daoxiangcun Foodstuff Co., Ltd, and confused the public. In response, Beijing Daoxiangcun thanked the court, and called on Suzhou Daoxiangcun to “respect the law.”

The brand logos of Suzhou Daoxiangcun (left) and Beijing Daoxiangcun (right). VCG

The brand logos of Suzhou Daoxiangcun (left) and Beijing Daoxiangcun (right). VCG

But the ruling wasn’t the final verdict, and on Tuesday the court retracted its injunction after Suzhou Daoxiangcun paid a 60-million-yuan ($9 million) guarantee, financial news outlet Caixin reported. The sequence of events follows China’s Civil Procedure Law — the guarantee will be returned if the court rules in Suzhou Daoxiangcun’s favor.

The injunction came at an unfortunate time for Suzhou Daoxiangcun, as Oct. 4 this year will be Mid-Autumn Festival, which is synonymous with eating small tarts called mooncakes. A Suzhou Daoxiangcun employee in charge of branding told Caixin that the company had removed some of their products from e-commerce platforms after Friday’s ruling. The company sold more than 100 million mooncakes in 2016.

For more than a century, the rival pastry makers have sold pastries under the same name — Daoxiangcun, meaning “village with fragrant rice paddies” — but in different parts of China. As online sales grow more important, however, the companies increasingly encroached on each other’s territories.

Suzhou Daoxiangcun was founded in 1773 in eastern China’s Jiangsu province; Beijing Daoxiangcun traces its history back to 1895. The Suzhou company registered the three Chinese characters as its trademark in 1982 under the bread and cakes product category. Its Beijing competitor registered in 1997, but for dumplings and glutinous rice cakes. However, both companies produce similar products, including mooncakes.

Friday’s ruling came after years of litigation between the companies.

According to Caixin, Suzhou Daoxiangcun in 2006 applied to the State Administration for Industry and Commerce (SAIC) to register a fan-shaped logo as a trademark. After the application was granted, Beijing Daoxiangcun appealed to SAIC’s trademark review board, arguing that because the fan-shaped logo contained the three Chinese characters for Daoxiangcun, it infringed on its 1997 trademark.

In 2013, the review board concluded that the Suzhou Daoxiangcun logo registration should be revoked. Suzhou Daoxiangcun sued, and the Beijing High Court in 2014 again ruled that its logo was too similar to Beijing Daoxiangcun’s trademark, and denied registration.

But Suzhou Daoxiangcun has continued to use the fan-shaped logo and the three Chinese characters despite the ruling of the High Court.

You Yunting, an intellectual property lawyer at DeBund Law Offices in Shanghai, told Sixth Tone that the dispute was far from owner. “There will be a winner and a loser in the case,” said You. “But judging from similar trademark dispute cases, [it’s likely that] the party that loses the case will be allowed to share the trademark with the one that wins.”

In August, two of the country’s largest beverage producers were ordered by the Supreme People’s Court to share the packaging design they had been fighting over. The court argued that the companies behind herbal teas Wanglaoji and Jiaduobao had both made “important contributions to the trademark.”

Editor: Kevin Schoenmakers.

(Header image: People wait in line to buy ‘yuanxiao’ dumplings at a Beijing Daoxiangcun store before the Lantern Festival in Beijing, Feb. 21, 2005. Lu Xu/VCG)