As the saying goes, 'fame brings trouble.' Since the Jiangxiaobai brand took the market by storm, a series of disputes have erupted over the ownership of the Jiangxiaobai trademark family. Recently, the administrative lawsuit over the invalidation of the 'Jiangji Xiaobai' trademark, part of the Jiangxiaobai series, was heard at the Beijing Intellectual Property Court. This marks the fourth trademark ownership dispute between Chongqing Jiangxiaobai Liquor Co., Ltd. (Jiangxiaobai Company) and Chongqing Jiangjin Distillery (Group) Co., Ltd. (Jiangjin Distillery) to enter judicial proceedings, following previous cases involving 'Jiangxiaobai,' 'Jiangdabai,' and 'Xiaobaijiang.' During the hearing, both sides' agents engaged in intense debate over whether the application for registration of the disputed trademark constituted the situation stipulated in Article 15, Paragraph 1 of China's Trademark Law: "Where an agent or representative, without authorization, registers the trademark of the principal or represented party in their own name, and the principal or represented party raises an objection, the trademark shall not be registered and its use shall be prohibited." -01- Cooperation Breakdown Sparks Disputes The disputes between the two parties have a long history, dating back eight years. In 2011, Tao Shiquan, who had extensive experience in the baijiu industry, reached a cooperation intention with Jiangjin Distillery to develop a baijiu product targeting young consumers. Subsequently, Sichuan Xintantu Trading Co., Ltd. (Xintantu Company), with Tao Shiquan as its legal representative, and Jiangjin Sugar and Tobacco Co., Ltd. (Jiangjin Sugar and Tobacco), an affiliate of Jiangjin Distillery, formally signed a "Customized Product Sales Contract" on February 20, 2012. It was this contract that laid the groundwork for many subsequent disputes between the two parties. Before Xintantu Company and Jiangjin Sugar and Tobacco signed the "Customized Product Sales Contract," Chengdu Geshang Advertising Co., Ltd. had been filing applications for the registration of the "Jiangxiaobai" series trademarks starting from December 19, 2011. Subsequently, the relevant trademarks were transferred to Xintantu Company and later to Jiangxiaobai Company. Among them, Trademark No. 10325554 "Jiangxiaobai" was opposed by Jiangjin Distillery after its preliminary approval announcement, and after opposition review, the Trademark Review and Adjudication Board of the former State Administration for Industry and Commerce (hereinafter referred to as the former TRAB) ruled that the opposition grounds were not established, and it was approved for registration on February 13, 2016, on goods in Class 33, such as fruit wine and distilled spirits. The Trademark No. 12065938 "Jiangji Xiaobai" involved in this case was filed by Xintantu Company on January 18, 2013. After its preliminary approval announcement, Jiangjin Distillery filed an opposition, but the Trademark Office of the former State Administration for Industry and Commerce ruled that the opposition was not established, and it was approved for registration on January 13, 2016, on goods in Class 33, such as fruit wine and distilled spirits. Subsequently, "Jiangxiaobai" liquor became an instant hit in the market, leading to strong sales. However, the cooperation between the two parties soon showed cracks, and in March 2013, Jiangjin Distillery and Xintantu Company terminated their cooperation through negotiation. Since then, Jiangjin Distillery has continuously filed trademark oppositions, opposition reviews, and invalidation requests against the "Jiangxiaobai" series trademarks applied for by Xintantu Company and Jiangxiaobai Company. Meanwhile, through the efforts of Xintantu Company and Jiangxiaobai Company, the "Jiangxiaobai" brand achieved great success in the baijiu market, gaining popularity among young consumers. Within just a few years, sales reached billions of yuan. In May 2016, after failing to oppose the "Jiangxiaobai" series trademarks, Jiangjin Distillery filed an invalidation request with the former TRAB, claiming prior rights to the "Jiangxiaobai" trademark and arguing that the "Jiangxiaobai," "Jiangdabai," and "Xiaobaijiang" trademarks applied for by Xintantu Company, as its distributor, should be declared invalid. Due to a change in Jiangxiaobai Company's address, it did not receive the defense notice sent by the former TRAB and was unable to participate in the review procedure. Based on evidence provided by Jiangjin Distillery, the former TRAB determined that Xintantu Company was a distributor of Jiangjin Distillery and that the two had a cooperative relationship. It also found that Tao Shiquan, legal representative of Xintantu Company and Jiangxiaobai Company, had email correspondence with Jiangjin Distillery regarding design drafts, and thus should have been aware of Jiangjin Distillery's "Jiangxiaobai" trademark. The former TRAB ruled that Xintantu Company's application for registration of the disputed trademarks, which were highly similar to Jiangjin Distillery's trademark, was clearly malicious, and therefore declared the "Jiangxiaobai," "Jiangdabai," and "Xiaobaijiang" trademarks invalid. However, in the administrative litigation, the Beijing Intellectual Property Court ruled in the first instance that, before the filing date of the disputed trademarks, the "Jiangxiaobai" trademark was not Jiangjin Distillery's trademark, and Xintantu Company's application for registration of the disputed trademarks did not infringe upon Jiangjin Distillery's legitimate rights and interests, nor did it constitute the situation under Article 15 of the Trademark Law as amended in 2001. The court revoked the former TRAB's ruling. Nevertheless, in the subsequent second-instance proceedings, the Beijing Higher People's Court agreed with the former TRAB, determining that Xintantu Company was a distributor of Jiangjin Distillery, and that the "Customized Product Sales Contract" signed by both parties did not stipulate the ownership of intellectual property rights such as trademarks. Evidence submitted by Jiangjin Distillery, including sales contracts, product delivery orders, and cargo transport agreements, indicated that before the filing date of the disputed trademarks, Jiangjin Distillery had already made preparations for the actual use of "Jiangxiaobai" and had actually used the "Jiangxiaobai" brand first. The final judgment revoked the first-instance judgment and upheld the former TRAB's ruling. -02- Ownership Rights Deserve Attention The "Jiangji Xiaobai" case heard this time is related to the above cases, with the core dispute being whether the relationship between the two parties is a distributor relationship or an OEM (original equipment manufacturer) processing relationship. Since this case is a continuation of the "Jiangxiaobai" case, the arguments from both sides largely revolved around the "Jiangxiaobai" case. From Jiangxiaobai Company's perspective, the relationship is undoubtedly an OEM processing contract relationship. The agent for Jiangxiaobai Company pointed out during the hearing that on February 20, 2012, Xintantu Company and Jiangjin Sugar and Tobacco signed two contracts: one was the "Customized Product Sales Contract," and the other was a "Sales Contract." The names, agreed content, and rights and obligations of the two contracts are clearly different; the former is an OEM processing contract, while the latter is a typical agency distribution contract. According to the "Customized Product Sales Contract," Jiangjin Distillery and its affiliates explicitly acknowledged that Xintantu Company had exclusive rights to the product concept, packaging design, advertising graphics, advertising slogans, and marketing promotion plans for the customized products, and the product concept here undoubtedly refers to the later-launched "Jiangxiaobai" brand. Meanwhile, the multiple pieces of evidence used by the former TRAB and the second-instance court in the "Jiangxiaobai" case to determine that Jiangjin Distillery had prior use of the "Jiangxiaobai" trademark had obvious problems such as inconsistent dates, illogical reasoning, and self-contradictions, and were all false evidence. "Jiangxiaobai" was not a trademark previously used by Jiangjin Distillery. The agent for Jiangxiaobai Company argued that the "Jiangxiaobai" series trademarks were originally conceived and designed by Tao Shiquan and others, and that Xintantu Company and Jiangxiaobai Company had invested over 160 million yuan in promoting and marketing "Jiangxiaobai" liquor, adopting unique and innovative marketing strategies for market development, resulting in strong sales. The fruits of this market development should rightfully belong to Xintantu Company and Jiangxiaobai Company. Rong Jin, the agent for Jiangjin Distillery and a lawyer at Beijing Jingshi Law Firm, stated that based on the "Customized Product Sales Contract" signed by both parties and the content agreed therein, it can be seen that there was an agency relationship between the two, and the contract did not stipulate the ownership of intellectual property rights such as the "Jiangxiaobai" trademark. The sales contracts, delivery orders, and cargo transport agreements provided by Jiangjin Distillery all prove its prior use and thus its prior rights, and these pieces of evidence are not false evidence as claimed by Jiangxiaobai Company. Therefore, the "Jiangji Xiaobai" trademark should be revoked just like the previous "Jiangxiaobai" and other trademarks. It is understood that in the "Jiangxiaobai" case, the first-instance court's penalty decision against Jiangjin Distillery for submitting false evidence was also revoked during the reconsideration procedure. Jiangxiaobai Company has filed retrial applications with the Supreme People's Court for the three administrative cases concerning the invalidation of the "Jiangxiaobai," "Jiangdabai," and "Xiaobaijiang" trademarks. Jiangxiaobai Liquor intends to downplay the negative impact of the lawsuit loss on the company in its statements. However, judging from the second lawsuit that followed, the trademark disputes between the two parties are far from over. Given that Jiangxiaobai Liquor once served as a distributor for Jiangjin Distillery and was accused by Jiangjin Distillery of "trademark squatting," it is likely that more trademark disputes will arise between the two parties in the future. Looking at the trademark disputes between Jiangxiaobai Liquor and Jiangjin Distillery, they bear a striking resemblance to the famous "Wong Lo Kat vs. JDB" battle. JDB ultimately lost the dispute and suffered a loss of a business worth tens of billions. Will Jiangxiaobai Liquor follow the same path? At present, it is unclear. However, given its previous loss, Jiangxiaobai Liquor clearly needs to be more cautious. Sources: China Intellectual Property News, New Financial Report If a tip is adopted, a reward of 400-2000 yuan will be paid. 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