IPR case a wet noodle for Baijia

Chinese characters, with their varieties of frame and font, seem to be a consistent source of trademark infringement conflicts.

Take the recent lawsuit between domestic instant rice noodle makers Baixiang (which means white elephant) and Baijia (which means white home).

The battle began in November 2007. Baijia filed a lawsuit against Baixiang at the Henan province Supreme People's Court, alleging that Baixiang's instant rice noodle products infringed on trademark rights by using Chinese characters similar to Baijia's upright-type trademark, thus affecting Baijia's business.

Baixiang wins

However, after the trial dragged on for a year, the Henan court ruled in favor of the defendant Baixiang and ordered the Baijia company to stop manufacturing and selling its instant rice noodle products with the upright-type of trademark.

Zhenglong Group, as the parent of Baixiang Food Co, established in November 1997, was the owner of the Baixiang trademark. After gaining the right to use an upright-type, regular script of Chinese characters for a trademark in 2001, Baixiang started to manufacture and sell its instant rice noodle products. And until now, the Baixiang product only had a unique upright trademark.

Sichuan Baijia Food Co, established in May 2001, simultaneously sold its instant noodle products with two kinds of trademarks, a horizontal one with boldface characters and an upright one with regular script from the beginning of its business.

In December 2001, the State Administration for Industry and Commerce approved Baijia Co's use of its horizontal trademark.

But without government approval, Baijia has also used the upright trademark since 2001.

After comparing their sales channels, raw materials, eating method, function and targeting of consumers, the court judged the instant rice noodles made by the two companies to be almost the same kind.

According to the court, the two companies were manufacturing the same products - Baixiang was approved to use the trademark right, but Baijia did not gain the right to use the upright-type trademark.

Chen Zhaohui, chairman of Baijia Co, complained that the company's use of the upright trademark was just an effort to seek a more beautiful image.

A manager of Baixiang Co, surnamed Zhang, said the trademark infringement not only results in unfair business competition, but it also confuses customers.

Chen said that by the end of 2008, the Baijia product had a 45 percent share of the domestic instant rice noodle market.

Be careful

However, he added that the current case had been especially significant in reminding the company to be more careful in using trademarks.

"The same as most domestic companies, from the beginning of our business, we did not think much about the intellectual property rights (IPR), especially for our trademark value," Chen said.

Seeking business opportunities from illicitly using Chinese characters similar to a trademark has increased in recent years.

Another recent lawsuit between two domestic pharmacy companies (Tianhe Co from Guilin of Guangxi Zhuang autonomous region, and Tianlin Co from Wuhan of Hubei province) was also due to the same infringing actions - using two similar trademarks with alike Chinese characters.

Experts said the lawsuit between Baijia and Baixiang reflected an increasing awareness of IPR among Chinese companies.

"And thanks to the great efforts, more domestic companies learned to use legal tools in actively protecting themselves on IPR issues," an official from the State Intellectual Property Office pointed out.

Baijia Food, based in western China, had sales exceeding 400 million yuan last year, according to its website (http://www.scbaijia.com).

Shanghai Securities News reported in October last year that Nissin Food Products Co, a leading Japanese maker of instant noodles, was in talks to buy a major stake in Baijia Food. But Baijia makes no comment about it, saying that "we are not going to take the company as son and sell it like a 'pig'," the website said.

The newspaper quoted unnamed sources as saying the talks were focusing on the size of the stake, with Nissin seeking to buy at least 33.4 percent and Baijia Food aiming to sell a smaller stake of between 20 and 25 percent.

Nissin spokesman Katsuhiko Kiyofuji said his company was in talks with the Chinese firm, but he denied reports that it intended to acquire the Sichuan company.