Budweiser wins compensation from infringement case

Recently the Foshan Intermediate People's Court made the first instance judgment on the case in which Budweiser (Wuhan) Beer International Inc. sued a bear company in Henan Province for patent infringement and unfair competition. The court ruled that the defendant should stop manufacturing and selling the infringing products and compensate a total of RMB 300,000 to the plaintiff.

In the summer of 2006, tinned beer in the brand name of "百龙同威" appeared in more than 30 cities in China. The package of the beer was quite similar to that of Budweiser beer in color and design. The words "美国百威集团有限公司" (meaning "Budweiser Beer International Group Co. Ltd." in English) were also obvious on the packaging tin, which lead the consumers to mistake it as a new product of Budweiser. However, the beer was much cheaper than Budweiser beer.

Investigations by Budweiser indicated that the infringing beer was manufactured by a beer company in Henan Province. In October 2007, Budweiser instituted a proceeding against the manufacturer of the infringing beer, the designer of the packaging and a distributor in Foshan. Budweiser requested the defendant to stop the act of unfair competition, stop manufacturing and selling the infringing products, and compensate a total of RMB 1.5 million.

At the trial held in December 2007, the defendant argued that, since it used the package with good faith and had stop the act of infringement, it should not bear the liability for infringement. According to the defendant, it was authorized to use, rather than copied or counterfeited, the package of the beer which had obtained a patent for design, thus it should not bear the liability of compensation.

According to the court, since substantive examination is not applied to a patent for design in China, it is possible that the defendant’s patent for design might infringe others' intellectual property right. Under the meditation by the court, both parties agreed that the defendant should stop manufacturing and selling the infringing products and compensate RMB 200,000 for patent infringement. Regarding the plaintiff's claim for unfair competition, the court ruled that the defendant should compensate RMB 100,000 to the plaintiff.