Shandong Lu Jin Industrial Co., Ltd. V. Juancheng Lu Jin Crafts Co., Ltd

Shandong Lu Jin Industrial Co., Ltd. v. Juancheng Lu Jin Crafts Co., Ltd. and Jining Lizhibang Home Textiles Co., Ltd., A Trademark Infringement and Unfair Competition Dispute

Guiding Case No. 46 (Discussed and Passed by the Adjudication Committee of the Supreme People’s Court Released on April 15, 2015)

CHINA GUIDING CASES PROJECT English Guiding Case (EGC46) November 15, 2015 Edition *

* The citation of this translation of the Guiding Case is: 《山东鲁锦实业有限公司诉鄄城县鲁锦工艺品有限责任公司、济宁礼之邦家纺有限公司侵害商标权及不正当竞争纠纷案》 (Shandong Lu Jin Industrial Co., Ltd. v. Juancheng Lu Jin Crafts Co., Ltd. and Jining Lizhibang Home Textiles Co., Ltd., A Trademark Infringement and Unfair Competition Dispute ), CHINA GUIDING CASES PROJECT , English Guiding Case (EGC46), Nov. 15, 2015 Edition , available at http://cgc.law.stanford.edu/guiding -cases/guiding -case -46. This document was primarily prepared by Ivan Cardillo, Oma Lee, Wen Ou, Jeremy Schlosser, Sean Webb, and Jeff Yau. The document was finalized by Jordan Corrente Beck and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects the formatting of the Chinese document released by the Supreme People’s Court. The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China and was released on April 15, 2015, available at http://www.chinacourt.org/article/detail/2015/04/id/1602326.shtml. See also 《最高人民法院关于发布第十批指导性案例的通知》 (The Supreme People’s Court’s Notice Concerning the Release of the Tenth Batch of Guiding Cases ), Apr. 15, 2015, available at http://www.chinacourt.org/law/detail/2015/04/id/148149.shtml.

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Keywords

Civil Trademark Infringement Unfair Competition

Generic Name of a Commodity

Main Points of the Adjudication

To determine the generic name of a commodity that has regional characteristics, [a court] should focus on conducting a comprehensive analysis of the following aspects: (1) [whether] the name is used as a matter of convention in a certain region or field, and has [also] been commonly used for a long time and recognized by the relevant public [of that region or field]; (2) [whether] the craft for producing the commodity that the name refers to has been formed by long -term common labor practice of the masses in a certain region or field; [and] (3) [whether] the raw materials for producing the commodity that the name refers to have been widely produced in a certain region or field.

Related Legal Rule(s)

Article 59 of the Trademark Law of the People’s Republic of China 1

Basic Facts of the Case

Plaintiff Shandong Lu Jin Industrial Co., Ltd.2 (山东鲁锦实业有限公司 ) (hereinafter referred to as “Lu Jin Company”) claimed: Defendants Juancheng Lu Jin Crafts Co., Ltd. 3 (鄄城县鲁锦工艺品有限责任公司 ) (hereinafter referred to as “Juancheng Lu Jin Company”) and Jining Lizhibang Home Textiles Co., Ltd. (济宁礼之邦家纺有限公司 ) (hereinafter referred to as “Lizhibang Company”) produced and sold a large quantity of Lu brocade products marked with

1 Translators’ note: this refers to the Trademark Law of the People’s Republic of China as amended in 2013, which was in effect when this Guiding Case was prepared. See 《中华人民共和国商标法》 (Trademark Law of the People’s Republic of China ), Article 59, passed and issued on Aug. 23, 1982, effective as of Mar. 1, 1983, amended three times, most recently on Aug. 30, 2013, effective as of May 1, 2014, available at http://www.gov.cn/jrzg/2013 -08/30/content_2478110.htm. 2 Translators’ note: the name “ 山东鲁锦实业有限公司 ” is translated here as “Shandong Lu Jin Industrial Co., Ltd.” The term “ 鲁锦 ” is translated as “Lu Jin” in accordance with the logo used on the company’s website, at http://www.chinalujin.com/qyjj.aspx. The words “ 鲁” (“Lu”) and “ 锦” (“Jin”) mean Shandong Province and brocade, respectively. 3 Translators’ note: the name “ 鄄城县鲁锦工艺品有限责任公司 ” is translated here as “Juancheng Lu Jin Crafts Co., Ltd.” The shortform “Juancheng Lu Jin” is used in accordance with the company’s blog, http://juanchenglujin.blog.163.com, listed on the company’s website, at http://www.lujinchina.com/lxwm.asp.

2015.11.15 Edition the words “Lu Jin”, infringing [the plaintiff’s] exclusive right to use the “Lu Jin” registered trademark. The inclusion of the words used [in] the plaintiff’s “Lu Jin” registered trademark in the enterprise name of Juancheng Lu Jin Company misled consumers and [thus] constituted unfair competition. “Lu Jin” was not a generic name. [The plaintiff] requested that [the court] order the two defendants to bear legal responsibility for the infringement of [the plaintiff’s] exclusive right to use [its] trademark and for unfair competition.

Defendant Juancheng Lu Jin Company defended its position, claiming: Before plaintiff Lu Jin Company was established by registration and before the registration of the Lu Jin trademark was completed, “Lu Jin” had already become a generic name. According to relevant provisions, [the defendant’s use of the words “Lu Jin”] was a type of “proper use”. It did not constitute trademark infringement, nor did it constitute unfair competition.

Defendant Lizhibang Company did not reply during the first-instance adjudication, but stated during the second-instance adjudication: “Lu Jin” was a generic name for southwest Lu’s pure cotton handmade folk textile products. [Lizhibang Company] did not know that “Lu Jin” was Lu Jin Company’s registered trademark. After [Lizhibang Company] received the complaint, [it] ceased the relevant use [of the words “Lu Jin”] and, therefore, should not bear responsibility for compensation.

The court handled the case and ascertained: Lu Jin Company was formerly Rui Jin Folk Handicrafts Factory of Jiaxiang County, which obtained the “Lu Jin” word trademark on December 21, 1999. The registration number [of the trademark] was No. 1345914 and the validity period was from December 21, 1999 to December 20, 2009. The commodities approved for use [with the trademark were] Type No. 25 (clothing, shoes, and hats). On November 14, 2001, Lu Jin Company also obtained the “Lj + LUJIN” combination trademark, whose registration number was No. 1665032 and validity period was from November 14, 2001 to November 13, 2011. The commodities approved for use [with the combination trademark] were Type No. 24 (textiles, cotton products, fabrics for underwear products, gauzes, textile products, terry cloth, nonwoven fabrics, bath towels, bed sheets, and textile furniture covers). On February 9, 2001, Rui Jin Folk Handicrafts Factory of Jiaxiang County changed its name to Lu Jin Industrial Co., Ltd. of Jiaxiang County, which was then changed to Shandong Lu Jin Industrial Co., Ltd. on June 11, 2007.

After Lu Jin Company obtained the exclusive right to use the “Lu Jin” registered trademark, it publicized its products and registered trademark multiple times through quite a few media [outlets]. In March 2006, [the company] was accepted by the “China Time-Honored Brand” Work Committee 4 as a member entity. After many years of effort, as well as a large

4 Translators’ note: the name “‘ 中华老字号 ’工作委员会 ” is translated here as the “‘China Time -Honored Brand’ Work Committee”. Previously named “ ‘中华老字号’研究分会 ” (“‘China Time -Honored Brand’ Research Subcommittee”), the Committee is a social organization that was founded in 2003 by the China General Chamber of Commerce as a social organization to promote the continuation of old enterprise culture, to unite and protect the interests of old and famous enterprises, and to enhance exchange and collaboration among old

2015.11.15 Edition amount of publicity over a long period of time through advertising and marketing, Lu Jin Company’s series of products under the “Lu Jin” brand, especially its clothing under the “Lu Jin” brand, achieved a certain degree of being known in the country. On November 16, 2006, the “Lu Jin” registered trademark was reviewed and approved to be a famous trademark 5 of Shandong Province.

In March 2007, Lu Jin Company purchased from Lizhibang Lu Brocade Specialty Store a commodity produced by Juancheng Lu Jin Company that was the same as or similar to the commodities approved for use [with Lu Jin Company’s registered trademark]. The label (hangtag), packaging box, and packaging bag of the commodity, as well as the façade of the store, all displayed the words “Lu Jin”. The [words] “Lu Jin” [displayed] on the façade of the store were enlarged prominently for use. The seal stamped on the issued invoice was Lizhibang Company’s seal.

Juancheng Lu Jin Company was established on March 3, 2003. The trademark used on [its] products was a combination trademark [consisting of] “the words ‘Jing Yi Fang’ + a graphic”. [The company] had applied to register that trademark, but [the application] had not been examined for approval. In September 2007, Juancheng Lu Jin Company applied to revoke Lu Jin Company’s registered “Lu Jin” trademark (No. 1345914). The Trademark Review and Adjudication Board of the State Administration for Industry and Commerce 6 had already accepted [the application] but had not rendered a ruling.

Based on Lu Jin Company’s application, the court of first instance [approached] Juancheng Lu Jin Company and Lizhibang Company to preserve evidence in accordance with law. [The court] discovered that the two defendants had in their possession a large quantity of commodities which were either of the same category as or similar to the products approved for enterprises. For more information, see, e.g., http://www.cgcc.org.cn/news.php?id=43415 and http://www.21jrr.com/news/zhxw/2015/0718/99168.html. 5 Translators’ note: the term “著名商标 ” is translated here as “famous trademark”. In China, there are three types of trademarks, namely, “驰名商标 ” (“well -known trademarks”), “著名商标 ” (“famous trademarks”), and “知名商标 ” (“known trademarks”). Well -known trademarks are recognized by the Trademark Office of the State Administration for Industry and Commerce or people’s courts, whereas famous trademarks and known trademarks are recognized by administration departments of industry and commerce at the provincial level and local (municipal) level, respectively. Among these three types of trademarks, only well -known trademarks are covered by the Trademark Law of the People’s Republic of China . Studies have shown that some local authorities have somewhat abused the system by recognizing famous or known trademarks too readily in order to promote the development of local companies and thereby the economic development of the localities. For more discussion of this topic, see, e.g., 吴汉东、周俊强 (WU Handong & ZHOU Junqiang), 地方商标战略及其制度完善 以《湖北省著名商标认定与促进条例》的制定为例 (Local Trademark Strategy and Its System Perfection Using the Formulation of the “Regulation of Hubei Province on the Recognition and Promotion of Famous Trademarks” As An Example ), 《江汉论坛》(JIANGHAN TRIBUNE ), Issue No. 8 (2008). 6 Translators’ note: the name “ 国家工商总局商标评审委员 ” is translated here as “the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce” in accordance with the translation used on the board’s website, at http://www.saic.gov.cn/spw/.

2015.11.15 Edition use under the registered “Lu Jin” trademark. The label (hangtag), packaging box, packaging bag, and price tag of the commodity, as well as the defendant’s store façade all displayed the words of the plaintiff’s registered “Lu Jin” trademark. The words “Lu Jin” were enlarged on the label (hangtag), packaging box, and packaging bag of the allegedly infringing commodity. [These words] were displayed in an eye-catching and prominent fashion as the commodity name or commodity decoration, and the packaging bag did not identify the manufacturer or its address.

[The Court] also ascertained: southwest Lu’s folk brocade is a type of pure cotton handmade folk textile products in Shandong [Province]. It is named [“Lu Jin”] because its patterns are so colorful and beautiful that they are as magnificent as [those of] brocade. [“Lu Jin”] has a history of over a thousand years in the southwest Lu region, and forms part of the Qilu7 culture that [also] has a long history. Beginning in the mid-1980s, southwest Lu’s brocade started to be developed for use. On January 8, 1986, the “Briefing on Southwestern Lu’s Brocade and Modern Life Exhibition” was held in Jinan. On August 20, 1986, the “Lu Brocade and Modern Life Exhibition” was organized by the Cultural Palace of Nationalities 8 in Beijing. Before and after 1986, various newspapers and periodicals, including People’s Daily , Economic Information ,9 and Farmers’ Daily ,10 published feature reports on “Lu Jin” and China Central Television and Shandong Television also produced multiple feature films on “Lu Jin”. Since then, “Lu Jin” has been widely used as a generic name for cotton handmade folk textile products in Shandong. Research, development, and production of Lu brocade have gradually become popular and grown stronger and larger. On November 15, 1987, in order to promote further integration of Lu brocade culture and modern life, the Canadian International Development Agency (CIDA) and the All-China Women’s Federation 11 jointly organized in Yangtun Village, Juancheng County, a bilateral cooperation project the Training Class for Juancheng Yangtun Women’s Lu Brocade Textile Union.

There are many records of “Lu Jin” in the local chronicles of Shandong Province and

7 Translators’ note: both “ 齐” (“Qi”) and “ 鲁” (“Lu”) were vassal states during the Spring and Autumn Period of ancient China and together they occupied the same territory as today’s Shandong. Qi played a major role in the politics of its era, whereas Lu had significant cultural influence because it was the home of Confucius. Qi absorbed the indigenous “Dongyi culture” (“ 东夷文化 ”), whereas Lu was deeply influenced by Confucius’ thoughts. Relatively speaking, Qi culture emphasizes innovation and Lu culture emphasizes respect for tradition. The two cultures gradually developed and merged together to form the Qilu culture (“ 齐鲁文化 ”). For more information about China’s plan to promote Qilu culture internationally, see WANG Qian, Plans to Take Qilu Culture to Overseas Audiences , CHINA DAILY , available at http://www.chinadaily.com.cn/cndy/2015 - 08/22/content_21670369.htm. 8 Translators’ note: the name “ 民族文化宫 ” is translated here as “the Cultural Palace of Nationalities” in accordance with the translation used on the organization’s website, at http://www.cpon.cn/. 9 Translators’ note: the name “ 《经济参考》 ” is translated here as “ Economic Information ” in accordance with the translation used on the newspaper’s website, at http://jjckb.xinhuanet.com/. 10 Translators’ note: the name “ 《农民日报》 ” is translated here as “ Farmers’ Daily ” in accordance with the translation used on the newspaper’s website, at http://szb.farmer.com.cn/nmrb/. 11 Translators’ note: the name “ 中华全国妇女联合会 ” is translated here as “the All -China Women’s Federation” in accordance with the translation used on the federation’s website, at http://www.womenofchina.cn/.

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[places such as] Jining and Heze where they discuss [regional] history, local specialties or traditional crafts. They all consider “Lu Jin” to be a type of traditional textile product prevalent in many rural areas in the southwestern regions of Lu and the main raw material [of the textile product] is cotton yarn. [They consider “Lu Jin”] to be one of the main varieties of folk art in Shandong. Relevant reference books and publications also have many explanations of “Lu Jin”, and all [of these sources] consider “Lu Jin” to be Shandong folk hand-woven cotton cloth with jacquard [pattern produced using] cotton as the main raw material and [through processes of] manual spinning, dying, and weaving. [The cloth] is commonly known as “homespun cloth” or “hand-woven cloth”. Because the cloth is as colorful as brocade or embroidery, it is named “Lu Jin”.

On December 25, 1995, the Cultural Heritage Bureau of Shandong Province 12 issued A Reply Concerning the Construction of the “China Lu Brocade Museum”, agreeing that the Bureau of Culture13 in the Heze region [could] establish the “China Lu Brocade Museum” in Juancheng County. On December 23, 2006, the People’s Government of Shandong Province announced the first batch of [those arts selected for inclusion in] the provincial-level intangible cultural heritage. The “Lu Brocade Folk Craftsmanship”, which was nominated for approval [to have such recognition] by the Department of Culture of Shandong Province, Juancheng County, and Jiaxiang County, was [finally] assessed to be an intangible cultural heritage. On June 7, 2008, the State Council [issued] the Guo Fa (2008) No. 19 Document, confirming that “Lu Brocade Weaving Techniques”, which were reported [for approval] by the Juancheng County and Jiaxiang County of Shandong Province, [should] be included in the list of the second batch of the national-level intangible cultural heritage.

Results of the Adjudication

On August 25, 2008, the Intermediate People’s Court of Jining Municipality, Shandong Province, rendered the (2007) Ji Min Wu Chu Zi No. 6 Civil Judgment:

1. [The court orders] Juancheng Lu Jin Company to cease immediately from the day the judgment comes into effect 14 the use of “Lu Jin” as its commodity name or

12 Translators’ note: the name “ 山东省文物局 ” is translated here as “the Cultural Heritage Bureau of Shandong Province”. The term “ 文物 ” is translated as “Cultural Heritage” in accordance with the term used on the website of the State Administration on Cultural Heritage (“ 山东省文物局 ”), at http://www.sach.gov.cn/. 13 Translators’ note: the name “ 文化局 ” is translated here as “the Bureau of Culture” in accordance with the formats used on the website of the Ministry of Culture of the People’s Republic of China (“ 中华人民共和国文化部”), at http://www.mcprc.gov.cn/. 14 Translators’ note: the original text reads “判决生效 ” (“the judgment comes into effect”). According to Article 155 of the Civil Procedure Law of the People’s Republic of China , judgments and rulings that have come into effect are judgments and rulings of the Supreme People’s Court as well as judgments and rulings which, according to law, may not be appealed or which have not been appealed within the prescribed time limit. See 《中华人民共和国民事诉讼法》 (Civil Procedure Law of the People’s Republic of China ), passed, issued on, and effective as of Apr. 9, 1991, amended two times, most recently on Aug. 31, 2012, effective as of Jan. 1, 2013, available at http://www.gov.cn/flfg/2012 -09/01/content_2214662.htm .

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commodity decoration on Type No. 25 clothing-type commodities that it produces and sells, and to remove, within 30 days of the judgment’s coming into effect, the words “Lu Jin” from the allegedly infringing products that still exist; [the court orders] Lizhibang Company to cease immediately the sale of the allegedly infringing commodities produced by Juancheng Lu Jin Company.

2. [The court orders] Juancheng Lu Jin Company to pay Lu Jin Company 250,000 yuan as compensation for economic losses within 15 days of the judgment’s coming into effect; [the court orders] Lizhibang Company to pay Lu Jin Company 10,000 yuan as compensation for economic losses.15

3. [The court orders] Juancheng Lu Jin Company to alter [its] enterprise name within 30 days of the judgment’s coming into effect, and the altered enterprise name must not include the words “Lu Jin”; [the court orders] Lizhibang Company to remove the words “Lu Jin” from its store façade immediately from the day the judgment comes into effect.

After the judgment was pronounced, Juancheng Lu Jin Company and Lizhibang Company appealed. On August 5, 2009, the Higher People’s Court of Shandong Province rendered the (2009) Lu Min San Zhong Zi No. 34 Civil Judgment: [the court] revokes the (2007) Ji Min Wu Chu Zi No. 6 Civil Judgment [rendered by] the Intermediate People’s Court of Jining Municipality, Shandong Province, and rejects Lu Jin Company’s litigation requests.

Reasons for the Adjudication

In the effective judgment, the court opined: 16 Based on the facts of this case, it could be determined that before Lu Jin Company registered “Lu Jin” as a trademark in 1999, [“Lu Jin”] had already become a generic name for cotton handmade folk textile products in Shandong. “Lu Brocade Weaving Techniques” was an intangible cultural heritage. The acts of Juancheng Lu Jin Company and Jining Lizhibang Company did not constitute trademark infringement, nor were they unfair competition.

First, “Lu Jin” had already become a generic name for textile products that possessed regional characteristics. The generic name of a commodity refers to the usual appellation [for] a certain commodity [in accordance with] the industry norm or [used as] a public convention in the society [where the commodity is popular]. A generic name can be an appellation established by the industry norm or it can also be the abbreviated name [used as] a convention by the public.

15 Translators’ note: there is no clear reference to the time limit for Lizhibang Company’s payment of the compensation. 16 Translators’ note: the Chinese text does not specify which court opined. Given the context, this should be the Higher People’s Court of Shandong Province.

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Lu brocade refers to southwest Lu’s pure cotton handmade folk brocade. Its patterns are so colorful and beautiful that they are as magnificent as [those of] brocade. [Lu brocade] has a history of over a thousand years in the southwestern regions of Lu. As a generic name for handmade textile products that possess Shandong’s characteristics, “Lu Jin” has been generally recognized by the State mainstream media, various kinds of specialized newspapers, and the news media of Shandong Province. All provincial, municipal, and county level chronicles [available in] Shandong Province, [as well as in places like] Jining, Heze, Jiaxiang, and Juancheng, have recorded “Lu Jin” as the “new name” of the traditional folk brocade in southwest Lu. Reference books on arts and crafts and fine arts have confirmed that “Lu Jin” is a type of pure cotton handmade folk textile product produced in Shandong.

“Lu Jin” weaving techniques have a long history. The very mention of “Lu Jin” makes people think of the long tradition of cotton handmade folk textile products in Shandong and their craftsmanship. “Lu Brocade Weaving Techniques” have been confirmed to be a national-level intangible cultural heritage. The craft for producing the pure cotton handmade textile products represented by “Lu Jin” was neither invented by a certain natural person nor an enterprise legal person. [The craft] was formed by the long-term labor practice of the masses in Shandong, especially the southwest Lu region. The raw materials for producing the pure cotton handmade textile products represented by “Lu Jin” were neither specifically planted by a certain natural person nor an enterprise legal person. [The main raw material used] was cotton widely planted in unspecified regions in Shandong. Since the mid-1980s, after a large amount of publicity by the media, “Lu Jin” has become the generic name for handmade folk textile products in the Shandong region that are [produced using] cotton as the main raw material and [by] manual spinning, dying, and weaving. In addition, the term [“Lu Jin”] has become generally used by the textile industry in the Shandong region and accepted by the relevant public [of this region’s] society. In conclusion, [the court] determined that “Lu Jin” is a generic name for pure cotton handmade folk textile products in Shandong, especially the southwestern regions of Lu.

On Lu Jin Company’s claim that the name “Lu Jin” was not extensively used [because] other places in China 17 also produced traditional coarse cloth which was not called “Lu Jin”, the court opined that the specific regions of production and the relevant public [of those regions], instead of the country as a whole, should be used as the standard to determine the extensiveness of the generic name of a commodity that had regional characteristics. [The fact that] cotton handmade textile products in other provinces in China are not called “Lu Jin” does not affect the fact that “Lu Jin” specifically refers to the specific cotton handmade folk textile products in the Shandong region.

On Lu Jin Company’s claim that [the use of] “Lu Jin” was not scientific [because] cotton textile products should be called “Mian” [(“cotton”)] instead of “Jin” [(“brocade”)], the court opined that there was no inevitable relationship between the determination of a name and whether it conformed to science. With respect to a name that has already been accepted by the

17 Translators’ note: the original text reads “ 我国 ” (“my country”) and is translated throughout this Guiding Case as “China”.

2015.11.15 Edition relevant public [of a particular region], has had a clear reference, and has become conventional, any aspect that is not scientific does not affect its becoming a generic name.

On Lu Jin Company’s other claim that “Lu Jin” did not have prevalence [because] some business operators and consumers in Shandong Province called these cotton handmade folk textile products “coarse cloth” or “traditional homespun cloth”, the court opined that the appellation “Lu Jin” was a new name confirmed in the mid-1980s, which had become known to and accepted by the relevant public [of Shandong] after many years of publicity and use. The existence of old names like “coarse cloth” and “traditional homespun cloth” does not affect the determination of “Lu Jin” as a generic name.

In addition, the exclusive rights holder of a registered trademark has no right to prohibit other people from properly using the generic name of the commodity that is included in the registered trademark. Article 49 of the Implementing Regulation on the Trademark Law of the People’s Republic of China 18 provides:

The exclusive rights holder of a registered trademark has no right to prohibit other people from properly using the generic name, graphic, or model of the commodity that is included in the registered trademark, or [from properly using either other details] that directly show the quality, main raw materials, functions, uses, weight, quantity or other features of the commodity, or the geographic name included in [the registered trademark].

The main function of a trademark is [its] ability to identify, meaning that consumers are able to distinguish the providers of corresponding commodities and services according to different trademarks. The objective of protecting trademark rights is to avoid [consumer] confusion as to the origin of commodities and services. Because Lu Jin Company’s “Lu Jin” word trademark and “Lj + LUJIN” combination trademark were consistent with the generic name “Lu Jin” of cotton handmade folk textile products in Shandong, the notable distinguishing features that [these trademarks] should have possessed were weakened. Although “Lu Jin” is not the generic name for Lu brocade clothes, it was the generic name for cotton handmade folk textile products in Shandong. A trademark registrant does not enjoy exclusive rights over [any] part of the trademark that [consists of] a generic name, and [therefore] the proper use of “Lu Jin” as a generic name by others is not affected. There are quite a few manufacturers in the southwestern region of Lu who use Lu brocade as fabric for producing bedding, crafts, and

18 Translators’ note: this provision was incorporated into the Trademark Law of the People’s Republic of China to be Article 59 of the law when the law was amended in 2013. As a result, the provision is no longer part of the Implementing Regulation on the Trademark Law of the People’s Republic of China. See 《中华人民共和国商标法实施条例》 (Implementing Regulation on the Trademark Law of the People’s Republic of China ), issued by the State Council on Aug. 3, 2002, effective as of Sept. 15, 2002, amended on Apr. 29, 2014, effective as of May 1, 2014, available at http://www.gov.cn/zhengce/content/2014 -04/30/content_8792.htm. See also 《中华人民共和国商标法》 (Trademark Law of the People’s Republic of China ), Article 59, supra note 1.

2015.11.15 Edition clothing and all of these manufacturers can properly use the “Lu Jin” name to descriptively indicate that Lu brocade is used as fabric in their products.

In this case, Juancheng Lu Jin Company used the two words “Lu Jin” on the packaging boxes and packaging bags of its products at issue. Although the commodity generic name that was included in the Lu Jin Company’s trademark was used in these products, [the use] was merely to indicate that its products used Lu brocade as fabric and that its production techniques had features of [those used in making] Lu brocade. [Juancheng Lu Jin Company] did not have the subjective bad faith of infringing on Lu Jin Company’s exclusive rights to use the “Lu Jin” registered trademark , nor did [Juancheng Lu Jin Company] use [the “Lu Jin” name ] as a business identifier. [Therefore,] it was a type of proper use and should not be determined to be an act of infringing on [Lu Jin Company’s] exclusive right to use the “Lu Jin” registered trademark. Based on the same reasoning, Juancheng Lu Jin Company’s u se of the words “Lu Jin” in its enterprise name was also [a type of] proper use and did not constitute unfair competition. Similarly, as a specialty store for Lu brocade products, Lizhibang Company also had the right to use the words “Lu Jin” and [this use] also did not constitute an infringement of the exclusive right to use the “Lu Jin” registered trademark.

Furthermore, since Lu Jin Company’s “Lu Jin” word trademark and “Lj + LUJIN” combination trademark were both approved for registration by the Trademark Office 19 of the State and for use with Type No. 25 and Type No. 24 commodities, [Lu Jin Company’s] exclusive rights to use these registered trademarks should be protected in accordance with law. Although Juancheng Lu Jin Company submitted an application to revoke the [“Lu Jin”] trademark [(No. 1345914)], the above-mentioned validly registered trademarks should still be protected in accordance with law prior to the Trademark Review and Adjudication Board of the Trademark Office of the State’s 20 revocation of [the “Lu Jin” trademark (No. 1345914)]. Given that “Lu Jin” was a registered trademark, in order to regulate the order of the market and safeguard fair competition, Juancheng Lu Jin Company, in its future use of the words “Lu Jin” to indicate the nature of the fabric of its products, should reasonably yield to Lu Jin Company’s exclusive rights to use the registered trademark and should use its own “Jing Yi Fang” trademark in a prominent fashion on the packaging of its products so as to distinctively distinguish the product origin, [allowing] consumers to conveniently identify [the products].

19 Translators’ note: the name “ 商标局 ” is translated here as “the Trademark Office” in accordance with the translation used on the office’s website, at http://sbj.saic.gov.cn/. 20 Translators’ note: the Chinese text reads “ 国家商标局商标评审委员 ” (the Trademark Review and Adjudication Board of the Trademark Office of the State”). Earlier in this Guiding Case, the relevant board is named “ 国家工商总局商标评审委员 ” (“the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce”).