"Donbeiren" vs. "Dongbeicai"
- Passing-off Restaurant ruled Unfair Competition

A restaurant named "Dongbeiren" ("东北人" in Chinese, meaning "Northeasterner") had a good reputation in Guangzhou(Canton), Haikou and neighboring areas in Southern China. It was passed off by someone who wanted to trade on the name, namely the proprietor of "Dongbeicai" ("东北菜" in Chinese, meaning "Northeastern Cuisine"). "Dongbeiren" believed that "Dongbeicai" violated the principles of Anti-Unfair Competition Law, thus petitioned to the court for ordering "Dongbeicai" to stop the infringement and compensate the damages suffered. The Higher People's Court of Guangdong Province rendered a judgement on this case on 19th April 2002.

The case can be traced back to 1995 when designer JI Wenjing of Dongbeiren Enterprise Co. Ltd. ("Dongbeiren", the claimant) designed a VI (Visual Identification) system named "Dongbeiren", and chose the adverting slogan of the restaurant and the slogan to appear on waiters' T-shirts. The VI system includes colors, writing style of the trade name of the restaurant, the style and textile of waiters and waitresses' dresses, as well as paper-cut patterns for window decoration. The designs were also used on Dongbeiren's napkins, table covers and menus.

In March 1999, the respondent, then RIRI Steak Restaurant, also in Guangzhou, changed its name to Dongbeiren Dumpling Restaurant. The writing style of its trade name "Dongbeiren" was identical with that of the claimant. Having been complained by the claimant, it changed its trade name to "Dongbeicai" and its writing style. But the menus, napkins, design of waiters' dresses, slogan on waiters' T-shirts, decoration of the restaurant were identical with or similar to those of the claimant. Customers took "Dongbeicai" as a branch restaurant of "Donbeiren". In June 2000, "Dongbeiren" started legal proceedings against "Dongbeicai".

The court of first instance, Guangzhou Intermediate People's Court ruled that the designs of the VI system of "Dongbeiren" was based on special local customs and cultural characteristics, and its form of expression was unique and special, and that the decoration of the restaurant, the writing style of the trade name, etc. of the respondent were similar to or identical with those of the reputable "Dongbeiren", therefore the respondent violated the principles of fairness, honesty and credit. The court found that the intent to trade on the claimant's fame on the part of the respondent was obvious, and its acts constituted unfair competition. The court decided that the infringement be stopped immediately, and the amount of 100,000 RMB Yuan (about $ 12,000) be paid to the claimant, at the same time, the respondent should make a public apology to the claimant.

"Dongbeicai" was not satisfied with the first instance decision. It appealed to the Higher People's Court of Guangdong Province, arguing that the VI system contained almost all the customary and cultural characteristics in Northeastern China, which should not be protected by law as exclusive rights and were not subjects of intellectual property law protection. However, the Higher People's Court of Guangdong Province ruled that the "Dongbeiren" VI system as a combination of stylized word of the trade name, decoration of the restaurant, design of waiters' dresses, and slogans, etc., was protectable intellectual work; and that although the system was originally based on the customs and cultures in Northeastern China, it was not a mere copy of the customs and cultures thus should be protected by relevant laws. The court found that "Dongbeicai" indeed had the intent to mislead customers, and had violated the principles of credit and honesty, which constituted unfair competition. The Higher People's Court of Guangdong Province rejected the appeal, and affirmed the judgment of the court of first instance.