Unauthorized Labeling Of "Supervised By The Palace Museum" On Alcohol Products Constitutes Unfair Competition

• Published date: 05 April 2024
• Subject Matter: Consumer Protection, Consumer Law
• Law Firm: Beijing East IP Law Firm
• Author: Beijing East IP Law Firm

Recently, the Palace Museum discovered that a Sichuan liquor company and a Beijing trading company used the words "Supervised by the Palace Museum" in the process of promoting and selling alcohol products. The Palace Museum filed a lawsuit against them alleging unfair competition.

The first instance court found that the actions of the Sichuan liquor company and the Beijing trading company constituted unfair competition, and ordered them to compensate the Palace Museum for its economic losses and reasonable expenses. The defendants appealed to the Beijing IP Court. The Beijing IP Court affirmed the lower court's finding that the defendants' action constituted unfair competition but adjusted the compensation amount based on new evidence.

Regarding the issue of whether the use of the words "Supervised by the Palace Museum" on the alleged goods and the related publicity in the online store constituted unfair competition, the Beijing IP Court found that:

Article 6 of the Anti-Unfair Competition Law stipulates that operators shall not use without authorization the names of other enterprises, social organizations, or persons that have certain influence to cause people to mistakenly believe that the goods are from others or that they have a specific connection with others. Regarding the use of the words "Supervised by the Palace Museum" on the alleged infringing products, the evidence can prove that the production dates marked in the online store were after the expiration of the supervision agreement involved. After the expiration, the Sichuan liquor company continued to label its liquor products with the words "Supervised by Palace Museum," which includes the full name of the Palace Museum, without the authorization or permission. Even though the Sichuan liquor company continued using the packaging design and product promotion style which were authorized during the supervision agreement period, but the words "Supervised by the Palace Museum" will not only make consumers believe that the Palace Museum supervises the packaging design and product promotion of the alleged infringing goods, it will inevitably make the public mistakenly believes that this product is closely related to the Palace Museum, or that the Sichuan liquor company still has a cooperative relationship with the Palace Museum on alcohol products, etc. This is obviously a case of obtaining unfair competitive advantages and commercial interests by taking advantage of the popularity of the Palace...