Court recognises Heinz Chinese trademark as well known

In 2006 a Chinese individual applied to register the trademark 亨氏, which is identical to the Chinese equivalent of HJ Heinz Company's house mark HEINZ, in respect of goods including "feeding bottles; condoms" in Class 10, for which Heinz did not hold prior registration.

Facts
The application was published in 2008 and Heinz filed opposition with the China Trademark Office (CTMO). One of the major grounds of the opposition was the violation of Heinz’s rights in its Chinese trademark, which had become well known before 2006. Despite substantial evidence on the use and reputation of Heinz’s Chinese trademark being adduced, the CTMO refused the opposition and rejected Heinz’s well-known trademark claim. Heinz appealed to the Trademark Review and Adjudication Board (TRAB) in 2011 but was unsuccessful. On appeal to the Beijing No 1 Intermediate People’s Court, the court again held that although Heinz had used and promoted its Chinese mark in China, the threshold for a well-known trademark had not been met. In 2014 Heinz appealed to the Beijing Higher People’s Court. As additional evidence, Heinz adduced a judgment issued by the Guangzhou Intermediate People’s Court in a 2014 infringement case in which the court recognised Heinz’s English and Chinese marks as well known in China in relation to “baby food" before 2010.

Decision
The 2014 Guangzhou Court judgment was regarded by the Beijing Higher People’s Court as irrelevant to the present opposition as the evidence in that case did not pre-date the application date of the opposed mark (2006). Nevertheless, based solely on the evidence of use and reputation of Heinz’s Chinese trademark previously adduced in the opposition proceedings, the court held that the rejection of Heinz’s well-known mark claim by the TRAB and the lower court was erroneous. Instead, the court held that the evidence adduced proved the high market share, extensive sales region and long-term promotion of Heinz baby food, which demonstrated that Heinz’s Chinese trademark had attained a high reputation in the Chinese market and become well known in China. Use of the application in respect of the applied-for goods by the applicant would thus damage Heinz’s interests. Accordingly, the Beijing Higher People’s Court set aside the lower court and TRAB decisions and ordered the CTMO to re-issue the decision on the opposition.

Comment
In China, pre-emptive applications by trademark squatters in classes of goods and services in which rights holders have no prior registrations have always been a serious issue faced by international brand owners. It is often necessary for brand owners to rely on well-known trademark claims in oppositions against such pre-emptive applications. Not only is the threshold high for such recognition, but the determination by the authorities or courts is often subjective. Taking the present case as an example, the fact that the Beijing Higher People’s Court recognised Heinz’s Chinese trademark as well known based on the same evidence as adduced before the CTMO indicates that the lower authorities have adopted excessively stringent standards in examining well-known trademark claims. As Heinz’s first well-known trademark recognition decision from the Beijing Higher People’s Court in opposition proceedings in China, the recent case has significant value for Heinz’s future brand protection. It is hoped that in future, the Chinese authorities will more readily recognise the well-known trademark status of famous brands.

Meanwhile, recognition of well-known trademark status does not necessarily mean that the rights holder will succeed in all oppositions thereafter, as it is still necessary to prove damage to the well-known trademark owner (ie, confusion or dilution). Previously the authorities in China have been more inclined to adopt the confusion theory to grant well-known protection only against applied-for goods or services which are in some way related to the well-known goods or services, and thus easily arouse confusion (in this case, feeding bottles and baby food). In recent years there have been an increasing number of cases in which the authorities have adopted the dilution theory to grant well-known protection against those goods and services which, although not closely related to the well-known goods, might dilute the distinctiveness of the well-known trademark (in this case, condoms and baby food). It is hoped that in future, the Chinese authorities will more readily adopt the dilution theory and extend the scope of well-known trademark protection.