Hearing authority: Shandong Provincial High People's Court
Cause of action: Trademark infringement and unfair competition dispute
Unitalen representative: Jinsha Cellar Wine Company （Appellant-plaintiff in the original trial)
All parties filed an appeal. The defendant in the original trial Jinsha Andi Dou Liquor Company and Jinsha Gu Liquor Company, used the mark "金沙古沙(Jinsha Gusha)" on the liquor goods they produced and sold, and the appellee, Shandong Heidou Company, sold the above sued infringing goods. After hearing, the court of first instance held that the use of the mark "金沙古沙(Jinsha Gusha)" constituted trademark infringement. The defendant in the original trial was not satisfied, and appealed to Shandong High People's Court, arguing that: (1) the trademark "金沙回沙酒(Jinsha Hui Sha Jiu)" contained the name of the place "金沙(Jinsha)" and the generic name of a specific part of the brewing process, and was not distinctive; (2) the mark "金沙古沙(Jinsha Gusha)" was used properly, and Jinsha Cellar Wine Company had no right to prohibit; and (3) the trademark involved had become a geographical indication, and entered the public domain, which did not have the conditions for trademark protection. Shandong High People's Court held that: (1) the role of Jinsha Huisha liquor as a liquor trademark indicating the source of goods had been significantly greater than its popularity as a place name and the generic name of wine obtained in a specific part of the brewing process, and Huisha liquor as a liquor trademark had achieved a high degree of prominence through long-term use. (2) The use of the mark "金沙古沙(Jinsha Gusha)" was clearly beyond the descriptive use that described the source of the goods and the Jinsha production region and the corresponding brewing process, which was trademark use, and the defense of proper use was not established. (3) The trademark involved was a geographical indication and belonged to the public resource. The argument that it shall not be protected by the trademark law lacks legal basis.
The case fully discusses the distinctiveness of trademarks containing place names and generic names. The essence of whether a trademark is distinctive lies in whether it can play the role of identifying the source of goods, rather than just making a simple judgment on the form. Moreover, the court made a precise distinction between the use of the sued mark as trademark use, or fair descriptive use. Neither of the plaintiff and the court in the original trial of this case prohibited the defendant from properly using the place name "金沙(Jinsha)" and the corresponding generic name of the brewing process, but only required that the defendant shall follow the principle of honesty and credit when using the place name "金沙(Jinsha)" and the corresponding generic name of the brewing process in the case where the plaintiff already has been a well-known trademark, and should not infringe the prior rights of others. However, the defendant in this case obviously broke through the scope of fair descriptive use by highlighting and enlarging the sued mark, which constituted trademark use and trademark infringement. In addition, the goods with registered trademark being recognized as geographical indications does not ipso facto affect the exercise of the exclusive right of the registered trademark.