Wawi’s 3D trademark and OEM dispute in China

Hogan Lovells China team and Hogan Lovells Fidelity have recently secured an important victory for WAWI Xiamen (i.e. the Chinese subsidiary of the leading German chocolate manufacturer Wawi Group), successfully defending it from a 3D trademark infringement claim before a Chinese court. The case involves cutting-edge IP issues such as the distinctiveness and infringement assessment for 3D-trademarks, and the non-infringement defence for Original Equipment Manufacturing (“OEM”).

Wawi Xiamen, a chocolate manufacturer based in China, regularly receives orders from one of its U.S. clients to manufacture rose-shaped chocolates, bearing the U.S. client’s word mark, produced exclusively for export to the U.S. market (i.e. Original Equipment Manufacturing, or “OEM”). A local chocolate company (“the Plaintiff”) owning a PRC 3D trademark registration for a rose shape, covering, inter alia, chocolates, alleged that the production of the chocolates in the PRC by Wawi Xiamen infringed its 3D rose shape trademark. It therefore requested China Customs to seize Wawi Xiamen’s shipments to its U.S. client. Subsequently, the Plaintiff also brought a trademark infringement case against Wawi before the Xiamen Intermediate People’s Court (“the Court”).

The key issues involved in this civil case are (1) whether the 3D rose shape applied on chocolates can serve as a source identifier; and (2) the applicability of the non-infringement defence for OEM production, when some elements for a clear-cut application of such defence are lacking.

In its judgement, the Court held that the 3D rose shape chocolate does not function as the source indicator and has low distinctiveness. In addition, the Court recognized that Wawi had fulfilled its duty of care, and therefore allowed the OEM defense.

This is a significant victory for the WAWI Group, especially considering the highly contentious nature of OEM in trademark procedures in China and the many divergent opinions in Chinese legal practice on these issues. Our client is highly satisfied with the result and considers the Court’s judgment encouraging, and a clear message about the improving clarity and efficiency of intellectual property litigation in China. The case also highlights Hogan Lovells’ capacity to successfully litigate complex IP disputes before the Chinese courts, in cooperation with our associated firm Hogan Lovells Fidelity.

Hogan Lovells advised WAWI Xiamen wiith Helen Xia (Picture), Jonathan Liang, Crystal Li, and Fred Liang.

Involved fees earner: Jonathan Liang – Hogan Lovells; Fred Liang – Hogan Lovells; Helen Xia – Hogan Lovells;

Law Firms: Hogan Lovells;

Clients: WAWI-Schokolade AG;

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Author: Michael Patrini