Lactic Acid Bacteria Beverage ≠ Lactic Acid Beverage: One-character Difference Costs RMB 300,000
A company registered the trademark “Junyao Weidongli” but used it on products outside its approved scope, and was sued by the owners of the well-known “Junyao” and “Weidongli” brands. The Yuhang District People’s Court of Hangzhou ruled that using the trademark beyond the approved goods categories constituted infringement, awarding RMB 300,000 in damages. A one-character difference comes at a price of RMB 300,000, sounding the alarm for all food enterprises.
“Same-name” Products Emerge on the Market
“Junyao” and “Weidongli” are well-known brands under Junyao Group Dairy Co., Ltd., focusing on lactic acid bacteria beverages and enjoying high nationwide popularity. Since 2017, Junyao Group has found in market monitoring that a lactic acid bacteria beverage named “Junyao Weidongli” has been sold in multiple regions. The product prominently displays the characters “Junyao Weidongli” on its packaging, which is highly similar to the packaging of Junyao Group’s “Weidongli” beverage and easily confuses consumers.
Investigation shows that the product is produced by a Beijing-based company and Jinan 某 Dairy Co., Ltd., and sold by a daily necessities store in Chongxian Subdistrict, Yuhang, Hangzhou.
In response to the infringement, Junyao Group filed a lawsuit. On September 18, 2017, it brought a trademark infringement action before the Yuhang District People’s Court of Hangzhou, claiming RMB 1 million in damages.
In September 2018, the Yuhang Court heard the case.
In court, the defendant company argued that it had registered the “Junyao Weidongli” trademark in Class 32 and was lawfully using its own registered trademark without infringing the plaintiff’s rights. According to law, disputes between two registered trademarks should go through administrative procedures, and the court should not have jurisdiction.
This threw the question back to the court: should the accused lactic acid bacteria beverage fall under Class 32 or Class 29? The defendant added that “milk beverages” in Class 29 are milk-based; since lactic acid bacteria beverages have low milk content, they should not be classified as milk beverages.
Lactic Acid Bacteria Beverage ≠ Lactic Acid Beverage
After hearing the case, the Yuhang Court issued a clear ruling based on the official reply of the Trademark Office of the State Administration for Industry and Commerce dated July 16, 2015 and national standards: Class 32 “lactic acid beverages (fruit-based, non-dairy)” are made from lactic acid and fruit juice, contain no milk ingredients and are not dairy products.
The “lactic acid bacteria beverage” in this case contains “skimmed milk powder” in its ingredient list, indicating it contains milk components. According to national standards, lactic acid bacteria beverages are fermented and prepared from milk or dairy products, and thus belong to milk-containing beverages.
In response to the defendant’s claim of “low milk content”, the court clearly stated that product attributes are determined by the main functional ingredients and production process, not by proportion. Although milk powder content is not high in this lactic acid bacteria beverage, milk powder and lactic acid bacteria together determine the product’s nature, so it shall be classified as a milk-based milk beverage.
The conclusion is clear: lactic acid bacteria beverages fall under Class 29 “milk beverages”, not Class 32 “lactic acid beverages”. The court further pointed out that the defendant company deliberately exploited loopholes in registered trademarks to commit market-confusing infringement.
Accordingly, the Yuhang Court found infringement established and issued the first-instance judgment as follows:
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The Beijing-based defendant company, as the entrusting party and actual operator of the infringing products, deliberately used the trademark across categories with obvious subjective malice, and was ordered to pay RMB 300,000 in damages.
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Jinan 某 Dairy Co., Ltd., as the processor, had reviewed the other party’s trademark registration certificate and fulfilled its duty of reasonable care, and thus bears no compensation liability.
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The daily necessities store defendant, as a seller with small business scale, was ordered to pay RMB 3,000 in damages.
The Beijing-based defendant company refused to accept the judgment and appealed.
On March 8, 2019, the Hangzhou Intermediate People’s Court issued the second-instance judgment, dismissing the appeal and upholding the original judgment. On December 13, 2019, the judgment was fully enforced and the RMB 300,000 compensation was paid.
Having a Trademark but Using It in the Wrong Place
The most distinctive part of this case is that the defendant actually legally held the “Junyao Weidongli” trademark. On March 21, 2017, Flanders Food Co., Ltd. successfully registered the “Junyao Weidongli” trademark in Class 32 for “lactic acid beverages (fruit-based, non-dairy)”.
Normally, holding a trademark certificate should mean lawful use. The problem is that the defendant did not use this trademark on “lactic acid beverages”, but on lactic acid bacteria beverages.
Lactic acid bacteria beverages and lactic acid beverages sound similar, but they are completely different categories in trademark classification. The former belongs to Class 29 “milk beverages”, the latter to Class 32. Cross-class use, even with a trademark certificate, may still constitute infringement.
“Legally registered” does not equal “lawfully used”.
Holding a trademark certificate is one thing, but the categories of products it is used on must strictly follow the approved scope. Cross-class use still constitutes infringement. Trademark registration is not a free pass; using it in the wrong place comes at a cost.
