China Law Blog

China Business Law blog has an excellent post up on Anheuser-Busch's recent Chinese court victory trademark infringement lawsuit against a Chinese infringer, obtaining substantial damages and an injunction. The post is entitled, "Anheuser-Busch: How Good Does a Slam Dunk in Chinese Court Feel?"

Around April of 2006, Anheuser-Busch (AB) became aware of a Chinese company named Putian Golden Key Company (“PGKC”) selling "New Generation Beer" with AB's “Wheat + Sash” graphic in boxes "with Chinese characters saying “American Budweiser International Beer Group, Ltd." PGKC sold this beer in various China provinces and various local branches of China's Bureau of Industrial and Commerce fined four companies for distributing this beer.

Since AB had many years earlier registered its Budweiser trademark and its "Wheat + Sash” graphic, AB sued PGKC and these four distributors in the Shanghai First Intermediate People’s Court for trademark infringement, seeking an injunction stopping PGKC from m'anufacturing the infringing product and the four distributors from distributing it, plus 500,000 Yuan against PGKC in damages. Additionally, Anheuser-Busch had signed (and presumably registered) a trademark use agreement with Wuhan Budweiser Co., making that Wuhan company the only party in China with permission to AB's registered trademarks. AB's case appeared so strong PGKC never even responded to the complaint.

China Business Law blog rightly highlights how the court found PGKC's packaging so misleading as to constitute "obvious malice" and then, based on this, it imposed a 10,000 Yuan civil penalty on PGKC. The post notes how civil penalties are rare in Chinese civil cases and not provided for in China's trademark statutes. The court apparently used Article 134 of The General Principles of Civil Law of China (1986) (China's “Civil Code”), which gives couts the discretion to “impose fines or detentions as stipulated by law.”

China Business Law concludes by stating he sees this case as demonstrating "the overall judicial trend, especially in economically more developed areas of China, to step up intellectual rights protection." I concur.

It appears AB positioned itself beautifully for this case and took all necessary and appropriate action. For more on what you can and should be doing to protect your trademarks in China, check out this article I wrote for the China Trade Law Report last year, entitled, "China's Trademark Laws: Simple and Effective."