Yangtse Evening Post
January 28, 2010

Hengyuanxiang, a wool clothing brand notorious for its annoying TV commercials, is involved a legal wrangle with a crafty independent businessman who claims that an image used by the company infringes on his trademark.

Yu Wenqing, the owner of the Xingyelong Garments Company Changshu, Jiangsu Province, filed his lawsuit after discovering that Hengyuanxiang was selling shirts bearing a stylized sheep's head logo — actually a character found on ancient bronzes — that he registered as a trademark in 2002. Yu is seeking 10 million yuan in compensation.

Hengyuanxiang countersued, claiming that it had created the logo in 1997 and registered it with the copyright office in 2002. The company initially sought 4,000 yuan in compensation, but amended its claim before trial to 500,000 yuan.

But as the dispute between the two companies is more than just a simple trademark infringement case, the Yangtse Evening Post reports:

Forty-four year old Yu Wenqing is the head of a private enterprise in Changshu whose Xingyelong Garments Co, Ltd. was founded in 1999. It signed a franchise contract with Hengyuanxiang to take on the manufacture and sales of Hengyuanxiang-branded jacked and sports parkas in 2001, and the company expanded in size. However, Xingyelong was investigated by commerce bureaus in Harbin, Shanghai, and Chengdu for producing fake Hengyuanxiang-branded products, and in March 2006, the two ended their relationship when Hengyuanxiang decided to remove Xingyelong as a contract manufacturer.

Xingyelong had more than one hundred people on staff at that time, and Yu Wenqing had already decided to create his own brand. What no one knew at the time was that the company had registered a sheep's head trademark in November, 2001. The registration was approved in 2003, and the trademark was transferred to Yu himself in 2004. After the end of the Hengyuanxiang partnership, Xingyelong began to use the logo in large quantities on its own branded products.

Yu revealed that he chose to file his lawsuit in November 2009 because according to Article 41 of the Trademark Law, "any person disputing a registered trademark may, within five years from the date of approval of the trademark registration, apply to the Trademark Review and Adjudication Board for adjudication." "More than five years have passed since our trademark was approved, so I am confident that I will win this suit. Everything is being done according to the law."

On the website of the State Administration for Industry and Commerce's Trademark Office, this reporter found the sheep's head in question registered to a person named "Yu Wenqing" for use on twenty-five items including clothing, shoes, and hats. Apart from the sheep logo itself, this reporter also found that 羊 (sheep) and 羊羊羊 [a slogan used by Hengyuanxiang] were registered for use on twenty-five items; the registrants were companies in Fujiang and Zhejiang, but did not include Hengyuanxiang.

L-to-R: Bronze character as shown in dictionary; Hengyuanxiang's "artistic work"; image from Yu Wenqing's trademark registration

In court yesterday, Hengyuanxiang argued that the logo shown in the middle of the above image was an artistic work created in 1997 after consulting ancient oracle bone, bronze, and seal characters. The logo began appearing on the company's clothing in 1998 and on company publications in 2000, and as an artistic work, it ought to be protected from copyright infringement.

Yu countered by charging that Hengyuanxiang's "artwork" was nothing more than a copy of a bronze character used in the Shang Dynasty (left image). Yu's lawyer mocked Hengyuanxiang: "It's a graphic of text that existed 3,000 years ago. So tell me which of the plaintiff's rights the defendant has infringed: plagiarism rights or reproduction rights?"

The court session ended yesterday at 3pm without reaching a decision. Despite a chain of events that would seem to paint Yu's trademark as the malicious appropriation of a mark already in use by Hengyuanxiang, a lawyer consulted by the Yangtse Evening Post said that the larger company's copyright claim has little hope of prevailing against Yu's stronger trademark registration.

For his part, Yu just wishes that Hengyuanxiang would stop picking on him:

Yu admitted that his company had indeed been called out for producing fake Hengyuanxiang products. The problem had resulted from management issues within the company, and he had already taken responsibility for them and paid a heavy price. However, he believes that Hengyuanxiang should not be obsessed with "those matters in the past." As for the lawsuits, he is confident of victory, "because I am the legal holder of the sheep's head trademark." He also said that his company has left behind its contract-factory chains and is taking its own brand forward.