Sweater brand wrapped in suit

Beijing Snow-Lotus Cashmere Co Ltd, the first cashmere sweater producer in China, recently prosecuted Shanghai Yagewei Knitted Garment Co Ltd and Beijing New Century Clothing Trade Market Co Ltd for trademark infringement.

According to Beijing Snow-Lotus, cashmere sweaters branded "Snow Lotus Yi Meng" produced by Shanghai Yagewei violated legal rights of the trademark "Snow Lotus" registered by Beijing Snow-Lotus.

Beijing New Century was sued because those "SnowLotus Yi Meng" sweaters were sold in stores in their market.

Beijing Snow-Lotus required the accused two to stop infringement acts immediately and pay 500,000 yuan for the loss they caused. Beijing Fengtai District People's Court accepted the lawsuit.

In 1964, the first China-made cashmere sweater was produced by Beijing Snow-Lotus. The company registered the trademark "Snow-Lotus" in the same year for its cashmere products. In June 2006, the trademark was honored as "China's Famous Trademark" by Trademark Office of State Administration for Industry and Commerce (TOSAIC). The company presently produces more than one million cashmere sweaters every year.

However, Beijing Snow-Lotus recently found in the market a cashmere sweater branded "Snow Lotus Yi Meng". What upset the company was that the two Chinese characters "Snow Lotus" in the trademark are much bigger and more obvious than the other two, "Yi Meng". Beijing Snow-Lotus also found the Shanghai-based company highlighted "Snow Lotus Group" in counters of its stores in Beijing and other cities.

According to a search result in Ctmo.gov.cn, the homepage of TOSAIC, the trademark "Snow Lotus Yi Meng" was registered by a Hong Kong-based company Snow Lotus Group (China) Ltd in 2000, and the four Chinese characters in the trademark have no obvious difference in size. In 2007, the Hong Kong-based company authorized Shanghai Yagewei to use its trademark in cashmere products.

Beijing Snow-Lotus said "Snow Lotus" was well recognized among customers. When consumers see the two Chinese characters, the company maintained they will usually associate the trademark with the cashmere products produced by Beijing Snow-Lotus.

Although "Snow Lotus Yi Meng" is a legally registered trademark, the behavior of Shanghai Yagewei to highlight "Snow Lotus" allegedly changed the original form of the trademark, which is likely to mislead customers. Therefore, the Beijing-based company brought the Shanghai-based company to court.

"Shanghai Yagewei is using the popularity of our trademark to help sales of their products. Such behavior will mislead customers because some of them have called our company asking whether Snow Lotus Yi Meng was another trademark of Beijing Snow-Lotus," said manager Hu with Beijing Snow-Lotus, who is in charge of the case.

According to Article Five in Law against Unfair Competition in China, business operators are forbidden to use trademarks or packages similar to that of well-known products with the intention to mislead customers.

Shanghai Yagewei denied the charge. The company said it is legal to use the trademark "Snow Lotus Yi Meng" through authorization by Snow Lotus Group (China) Ltd. Besides, there are many other trademarks that involve "Snow Lotus". Therefore, the two characters do not exclusively refer to the cashmere products produced by Beijing Snow-Lotus. The company said it might have some improper usage of the trademark, but such usage does not equal infringement.

"We will express our dissent from TOSAIC on those trademarks involving 'Snow Lotus'," said Hu.

The other defendant, Beijing New Century, said it sold the sweaters produced by Shanghai Yagewei because it did not know they were involved in a lawsuit. The company believes it has already fulfilled its obligation as a market supervisor. Beijing New Century said it has commanded the stores to stop selling those products involved in the lawsuit.

The case is still under hearing.