Meng Niu vs Yi Li: IP infringment case in food industry

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It often appears that competitors imitate package designs of famous products, in bad faith, to confuse consumers and further grab market shares.

 

Recently, Beijing Haidian People’s Court made the first trial judgement, holding that the production of “WEI LAI XING” nutritional juice yogurt drinks of Neimenggu Meng Niu Dairy (Group) Company Limited (defendant, hereinafter referred to as “Meng Niu”) constituted unfair competition against “QQ XING” nutritional juice yogurt drinks of Neimenggu Yi Li Industrial Group Company Limited (plaintiff, hereinafter referred to as “Yi Li”). It was held that Meng Niu should immediately stop infringement, stop selling the infringing products, eliminate all design influenced by “QQ XING” and pay Yi Li RMB 2.15 in compensation for economic loss and reasonable expenses.

The plaintiff stated that the packaging of the “WEI LAI XING” products by Meng Niu, imitates the package design of its own “QQ XING”, which confuses consumers and constitutes unfair competition and therefore instigated litigation proceedings.

Yi Li stated that “QQ XING” products were designed for children and began being marketed in 2012, which included strawberry and banana flavor. The package and package design of the products is unique and was designed according to the pioneering of 3D volumetric packaging by Disney in China. The products have won multiple awards since 2012 when they were first introduced to the market. Due to advertisement and promotion, it has gained a high reputation and large market share, which makes it a famous product which is well known by the public.

Later, in March, 2015, the defendant, Meng Niu marketed “WEI LAI XING” products, also including banana and strawberry flavor, the package and package design of which are also 3D volumetric based on a cartoon character similar to that of “QQ XING” products.

The plaintiff, Yi Li, stated that, the package and package design of suspected infringing products of the defendant are similar to the products of plaintiff in regards to composing elements, design style, as well as product name. Therefore, since the products of the plaintiff and defendant are similar, an ordinary consumer would easily be confused as to the source of the products.

After the hearing, the court held that the category of the product, targeted consumers, profit model and market segments of the plaintiff and the defendant overlapped, so that there was direct competition between the products of the plaintiff and defendant. According to the relevant articles under the Anti-Unfair Competition Law of P.R.C., the court held that since the defendant began marketing the products after the plaintiff, and because the products of the plaintiff enjoy an elevated reputation in the market due to the significance of the single product package design, single set of products and its boxes, and the long-term competition between the plaintiff and the defendant; it is impossible that the defendant did not know about the product package design of the plaintiff; therefore that the defendant packaged the products in bad faith.

According to this, the court decided that the acts of the defendant constituted unfair competition. In the appeal, the appeal court modified the judgement of the original court, deciding that only the single bottle design and the bottle-set design, and not the box packaging design, of the defendant’s products constituted unfair competition against the plaintiff and upheld the conclusion in the original judgement. Therefore, the appeal court decided to maintain the original judgement.

 

 

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