The nationwide reknowned skin care brand Inoherb recently claimed lawsuit against skin care producer DependentHerb, on the ground that the former uses "DependentHerb" to imitate its registered trademark style, and the packaging and decoration style is highly similar to the packaging of the sixth generation products that gradually withdrew from the market in 2016. As a result, both parties launched a trademark infringement and unfair competition dispute.

Recently, new progress has been made in disputes between the two sides. According to the judgment published by Shanghai Higher People's Court recently, Shanghai Baixuantang Cosmetics Co., Ltd. (hereinafter referred to as Baixuantang Company) used the logo "DependentHerb and Picture" on its products and packaging, which infringed the trademark of Shanghai Inoherb Cosmetics Co., Ltd. (hereinafter referred to as Inoherb Company) No.7378930 "INOHERB and Picture", as well as the exclusive rights enjoyed by trademarks No.10778354 and No.14233718 (hereinafter referred to as trademarks involved); Baixuantang Company uses the decoration similar to that of the sixth generation cosmetics of Inoherb Company on the alleged infringing goods, which constitutes unfair competition.

Packaging hijack and disputes

Founded in 2000, the "Inoherb" brand focused on the development of materia medica skin care products. In 2009, 2012 and 2014, the Company successively submitted three applications for registration of trademarks involved, which were approved for registration and use in cosmetics and other third-class commodities in 2010, 2013 and 2015 respectively.

Baixuantang Company was established on November 8, 2016, and its business scope includes the sales of cosmetics, chemical raw materials and products, packaging materials and daily necessities. In 2017 and 2020, the Company successively submitted the registration applications for the trademarks No.22704207 and No.52284264 (hereinafter referred to as the trademarks of "DependentHerb"), which were approved for registration and use in Class 3 commodities such as cosmetics in 2018 and 2021 respectively.

On August 10, 2020, Inoherb Company filed a request for invalidation of the trademark No.22704207 "DependentHerb" of Baixuantang Company, The Trademark Office of the State Intellectual Property Office (hereinafter referred to as the Trademark Office) determined that the trademark was similar to the trademark No.10778354 "INOHERB" and No.7378930 "INOHERB" of the Inoherb company, and the coexistence of the same or similar goods easily caused confusion or misunderstanding of the source of the goods by the relevant public. On August 9, 2021, the trademark was invalidated. On January 13, 2022, the Trademark Office issued a notice declaring the trademark invalid.

According to the court judgment, in 2019, Inoherb Company found cosmetics sold with the trademark of "DependentHerb" on Taobao, Pinduoduo and other e-commerce platforms. Not only the trademark style is similar to the trademark involved, but also the packaging and decoration style is highly similar to its sixth generation cosmetics. In August, 2020, through investigation and evidence collection, Inoherb Company found that the "Northeast Pharmacy Shop" on Taobao platform was on sale with the product "120ml of Dependent Grass Plant Leaf Toner", which was produced by Baixuantang Company.

According to Inoherb Company, the text composition, pronunciation call and meaning of the logo of "DependentHerb" used by Baixuantang Company are similar to the trademark involved, which constitutes trademark infringement. At the same time, the outer packaging color, pattern, shape and layout of "DependentHerb" cosmetics products produced and sold by Baixuantang Company are highly similar to their influential packaging decoration, which constitutes unfair competition. On October 28, 2020, Inoherb Company jointly sued Baixuantang Company and its Taobao online store to the court, claiming economic losses of 500,000 yuan and reasonable expenses of 26,500 yuan.

Baixuantang Company argued that since January 2021, it has stopped producing cosmetics. After Inoherb Company requested to declare its trademark "DependentHerb" invalid on the ground of its similarity with the trademark involved, it did not use the trademark "DependentHerb" again, and its previous use within the approved scope of the trademark was legal. The Taobao online store, on the other hand, did not reply to the demands of Inoherb Company.

After trial, the Shanghai Intellectual Property Court held that Baixuantang Company used the alleged infringing logo "DependentHerb and Picture" on the goods and packaging produced and sold, which easily caused the relevant public to confuse or misunderstand the source of the goods, thus infringing the exclusive right enjoyed by the appropriate herbal company to the trademark involved; Baixuantang Company argues that it uses a registered trademark with rights, but there are obvious differences between its actual use of the sued infringing logo and its two "DependentHerb" trademarks, and one of the trademarks has been declared invalid, so the claim that its sued behavior does not constitute trademark infringement cannot be established. At the same time, the overall visual effect of the decoration used by Baixuantang Company is similar to that of the sixth generation cosmetics of Inoherb Company. Considering the fact that the merchandise decoration of Inoherb Company is significant and well-known, as well as the general attention that ordinary consumers may exert when purchasing such goods, the similarity of their overall visual effects will easily lead the relevant public to misunderstand the source of the alleged infringing goods or think that there is a specific connection with the Inoherb Company. On such ground, Baixuantang Company was accused of unfair competition.

To sum up, on August 30, 2022, Shanghai Intellectual Property Court ruled that Baixuantang Company and its Taobao online store shall stop the alleged trademark infringement and unfair competition, and ordered Baixuantang Company to compensate the Inoherb Company for economic losses of 300,000 yuan and reasonable expenses incurred to stop infringement of 26,500 yuan, of which the Taobao online store was jointly and severally liable for 2,000 yuan.

Baixuantang Company refused to accept the first-instance judgment and then appealed to Shanghai Higher People's Court.

Infringement caused by trademark "deformation"

The Shanghai Higher People's Court held that the use of the alleged infringing logo by Baixuantang Company may cause confusion or misunderstanding on the source of goods by the relevant public, and was thereby liable for trademark infringement due to its use of logos similar to the registered trademark of the Inoherb Company on the same or similar goods; Baixuantang Company claimed that its sued act was a legal business act using its own registered trademark. However, its trademark No.22704207 "DependentHerb" has been declared invalid, and its logo actually used in business activities is quite different from its trademark No.52284264 "DependentHerb", and its sued behavior does not belong to the "use of its own registered trademark" as accused by Baixuantang Company. 

At the same time, the decoration of the alleged infringing goods and the cosmetics involved in the case of Inoherb Company is basically the same in overall layout, with only slight differences in some details. The overall visual effects of the two marks are similar to each other, which may easily cause the relevant public to misunderstand the source of the alleged infringing goods or think that there is a specific connection with Inoherb Company; Considering the fact that the decoration involved is significant and well-known, and it takes a certain time for the products to completely withdraw from the market, even though Inoherb Complay had ceased to sell products with the sixth generation packaging since 2016, the decoration usage behavior of Baixuantang Company still constitutes unfair competition behavior which may lead consumer to be mistaken for goods of others. To sum up, the court ruled that the appeal request of Baixuantang Company was rejected.