Judicial interpretation mediates between trademarks and prior rights

On 18th February 2008 the Supreme People’s Court of China passed the Provisions on Issues Concerning the Trial of Civil Cases Involving the Conflict between a Registered Mark or an Enterprise Name with Prior Rights. The provisions came into force on 1st March 2008.

There have been many cases whereby the word or device in a registered trademark may conflict with another’s prior right (eg, copyright, design patent right or enterprise name right). The provisions now clarify that the aggrieved owner of the prior right may sue the trademark owner in court without first having to invalidate the trademark before the Trademark Review and Adjudication Board (TRAB) under the provisions of the Trademark Law.

The Supreme People’s Court of China has handled many such cases and so has gained substantial experience in this area. Moreover, unlike the TRAB, which takes a few years to issue a cancellation ruling, the Supreme People’s Court can deal with the matter much more quickly.

However, where the prior right in question is an earlier trademark registered in respect of identical or similar goods/services, its owner must still invalidate the subsequently registered trademark at the TRAB before initiating any court action. It was thought that trademark cancellations were more appropriately handled by the TRAB so that the same standard could be applied to different cases. Moreover, there is less chance for local protectionism. On the other hand, a civil action may be launched directly if (i) the unauthorised use of the mark is in respect of goods/services beyond the registration’s specification, or (ii) the mark has been altered (eg, used in combination with another registered mark).

The provisions also clarify that an enterprise name owner may rely on Article 5(3) of the Unfair Competition Law to commence a court action against use of an identical or similar enterprise name registered subsequently if such use is likely to cause confusion among consumers as to the source of the goods/services. Article 5(3) of the law provides that unauthorised use of the enterprise name of another person causing confusion as to the source of goods/services is an act of unfair competition. The provisions state that the proper cause of action to be pleaded is infringement, unfair competition and the like. “Conflict” between the rights is not a proper cause of action.

In the case of infringing use of an enterprise name, the Supreme People’s Court may, in appropriate cases, impose a restriction on the use instead of ordering the infringer to cease use of the name.