Facts:

Martell is the oldest of the great cognac houses, having created cognacs for three centuries. Since 2005, Martell has registered two-dimensional (2D) or three-dimensional (3D) trademarks to protect its cognac bottles. Through continual advertising campaigns, Martell’s cognac and their bottle shape have acquired a high reputation in China.

Court Holds:
The court asserted that when assessing the similarity between an allegedly infringing product and a 3D trademark, it is necessary to take a global view so as to determine whether the shapes are likely to be confused by the relevant public. The court therefore found that the bottle shape of the defendants’ bottles is confusingly similar to Martell’s registered 3D trademarks and that trademark infringement could be established.

The court added that trade dress can be protected by a 2D trademark embodying the front view of the product. It reasoned that Martell’s continual advertising had led the relevant public to link the specific bottle of the 2D trademark to Martell brand and Martell Cordon Bleu. Consequently, the slavish copy of Martell’s Cordon Bleu trade dress was likely to make the relevant public, believe that it has a certain association with Martell, which constituted trademark infringement.

The Court ruled in Martell’s favor and specifically ordered Mr. Gan, the codefendant (legal representative of the accused infringers) to bear joint and several liability based on the reasoning that: 1) Gan acted in the capacity of legal representative and the largest shareholder of the accused companies; 2) Gan registered word trademarks and design patents and then authorized the accused companies to use them on the allegedly infringing products; and 3) Gan owned several bank accounts and was probably using them to receive money on behalf of his companies.

The defendants appealed and the cases are now in the second instance.

Comments:

The cases reaffirm that in civil lawsuits involving 3D trademark infringement, it is essential to demonstrate that the shape fully functions as the source indicator of the products. It is, therefore, necessary to 1) accurately define the features of the 3D trademark, i.e., its protection scope; 2) submit all necessary evidence to prove the reputation acquired by the 3D trademark and the corresponding product; and 3) collect and submit evidence to prove the bad faith of the infringer, such as simultaneously producing/ distributing lookalikes of other brands.

Still it is not easy to obtain the registration of 3D trademark in China, due to the strict examination criteria over the 3D trademark applications. As an alternative and backup plan, brand owners may resort to protect the front view of a product by a 2D trademark, in order to protect its trade dress against infringement.

Finally, to impose more deterrence on the infringer, it is advisable to collect evidence on the infringer’s shareholders, to find out whether they are engaged in the infringement, and to identify the level of their financial entanglement, so as to request the shareholder(s) to bear joint and several liability.

Contributed by: Du Tong