A patient receives a blood glucose test in a hospital in Beijing in July 2013. Photo: CFP

 

The Trademark Appeal Board of the State Administration for Industry and Commerce has ruled to revoke the "OneTouch" trademark owned by US healthcare giant Johnson & Johnson (J&J), Chinese firm Guilin Zhonghui Technology Co, whose lawyer filed the appeal with the trademark board, announced Wednesday.

Guilin Zhonghui, based in South China's Guangxi Zhuang Autonomous Region, had been accused of infringing on J&J's blood glucose test strip trademark "OneTouch" by the US firm. The case has lasted for 5 years.

The test strips are used in glucose meters to detect the patients' blood glucose level.

The trademark board made the ruling on December 27, according to a document provided to the media by Guilin Zhonghui on Wednesday. J&J has been given 30 days to appeal the ruling in court, otherwise its "OneTouch" products will be forced out of the Chinese mainland market.

The US company is also facing a compensation demand from Guilin Zhonghui, as its previous legal actions against Guilin Zhonghui has resulted in "huge" damage to the latter, the Chinese company's chairman Li Zhong said at a press conference in Beijing on Wednesday.

Guilin Zhonghui was accused of trademark infringement by J&J back in 2007 because "ONE TOUCH" appeared on the blood glucose test strips produced by Guilin Zhonghui. But different from J&J's trademark, the "ONE TOUCH" on Guilin Zhonghui's products is two separate words.

Guilin Zhonghui argued that the "ONE TOUCH" sign on its products is only a description of the product, which has its own trademark Zhonghui.

J&J did not comment on the matter when contacted by the Global Times on Wednesday.

Li said that Guilin Zhonghui's business has been seriously dampened by the long-lasting trademark dispute with J&J.

"We barely managed to run the company so far," Li told the Global Times at the press conference.

According to a report on nbd.com.cn, a news portal run by National Business Daily, back in May 2011, Guilin Zhonghui used to report around 20 million yuan ($3.3 million) sales revenue each year before the trademark dispute, and the blood glucose test strip production accounted for around 80 percent of its business.

Li said that his company was still producing blood glucose test strips during the past few years, but mainly for export.

With the ruling made by the trademark board, Guilin Zhonghui can sell the blood glucose test strips in the Chinese market, Huang Yunzhong, Guilin Zhonghui's representing lawyer who works for a Beijing law firm, said at the press conference.

The Trademark Appeal Board's ruling is based on a legal clause saying that if an expression has been widely used to describe a product feature, then it is suitable to be registered as a trademark.

Evidence provided by Guilin Zhonghui showed that it already used the "ONE TOUCH" description on its products even before J&J's registration of the trademark.

Zhang Qihuai, chief attorney of Beijing Lanpeng Law Firm, told the Global Times that the Trademark Appeal Board is highly professional. "There is little chance that the court will withdraw the ruling, though this is still possible," Zhang told the Global Times.

Foreign healthcare companies such as J&J, Roche and Bayer used to have a strong presence in China's glucose meter market, Zhong Hongyue, an industry analyst at consultancy Frost&Sullivan, told the Global Times.

However, they have been facing increasing competition from domestic companies in the past few years, as domestic products are also of good quality but the prices are lower, Zhong said.

Besides Guilin Zhonghui, Shenzhen-listed Sinocare Inc and Jiangsu Yuyue Medical Equipment and Supply Co also produce glucose meters and blood glucose test strips. A price search online showed that J&J's blood glucose test strips were priced at 4.5 yuan to 5.5 yuan each, while domestically produced ones were priced at less than 3 yuan.

"If the J&J products were pulled out of the China market, even within a short period, it will be a great opportunity for domestic companies," Zhong said.

Timeline:

 

Oct 2007 J&J reported to Guangxi police that fake “OneTouch” products were found on the market

 

Sep 2009 A local procurator office instituted a public prosecution against Guilin Zhonghui on the case

 

Dec 2011 Guilin Zhonghui appealed to the Trademark Appeal Board to annul J&J’s “OneTouch” trademark

 

Mar 2012 The Trademark Appeal Board accepted the case

 

Dec 2013 The Trademark Appeal Board made a ruling to annul J&J’s “OneTouch” trademark