Wanhuida Intellectual Property - China
Last year, a number of interesting trademark cases were adjudicated. As well as showcasing that the level of protection of trademark rights in China is constantly rising, the following decisions provide important insight into the handling of trademark refusals, oppositions and invalidations (relative grounds).
Most of the judgments were rendered by the Beijing IP Court and the Beijing High Court, with prosecution disputes handled by the trademark administration (ie, the China National IP Administration (CNIPA), which replaced the China Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) after an administrative reshuffling).
Cases centred on the similarity of trademarks and goods
The likelihood of confusion is the ultimate reason for refusing or invalidating a trademark. Yet, this concept, which depends on several factors, is not defined in the law. The Beijing IP Court and Beijing High Court are frequently faced with the difficulty of evaluating the degree of similarity between trademarks and between goods, the level of the reputation of a prior trademark, the consequence of a coexistence agreement or, even, decide if it is possible to ‘extend’ the reputation of a registered trademark to a subsequent application. Thus, the below cases are instructive.
John Deere, a US-based manufacturer of agricultural equipment, requested the invalidation of the trademark ZHONGCEDEER, citing its prior trademarks DEERE and JOHN DEERE. The registrant argued that other trademarks including the word ‘Deere’ had been registered without any confusion. The TRAB, the Beijing IP Court and the Beijing High Court ((2019) Jing Xing Zhong No 7233) agreed to invalidate the trademark, adding that the existence of other registered marks containing the word Deere was not decisive to the case.
US-based 3M Company tried to eliminate a series of 3LM trademarks designating sandpapers and abrasives registered in 2015. The TRAB refused to invalidate, considering that the marks and the products were not similar, and the Beijing IP Court confirmed the TRAB's decision. However, the decisions were reversed by the Beijing High Court ((2019) Jing Xing Zhong No 1164), which acknowledged the reputation of 3M and determined that the marks were similar and that their products overlapped to a large extent.
Reputation can, however, be a double-edge argument. This happened to Swedish car manufacturer Volvo, which requested the invalidation of VOVO filed in Class 9 (notebooks). The Beijing IP Court considered that, since Volvo was very well known for cars, but had not yet used the mark in Class 9, the public would not be confused. Fortunately for the auto brand, the Beijing High Court ((2019) Jing Xing Zhong No 3870) disagreed with this reasoning and said that the examination rules do not provide that there is less likelihood of confusion if a trademark enjoys a high reputation.
Coexistence agreements can help (sometimes)
When similarity is not too high, a coexistence agreement can help – but not always, as the cases below illustrate.
Dulwich College’s application for the registration of its name in Chinese was rejected by the CTMO, citing a trademark using the same two Chinese characters (德威). The TRAB maintained the refusal. Before the Beijing IP Court, Dulwich College produced a letter of consent from the registrant of the cited trademark, and the court approved the registration. The TRAB appealed to the Beijing High Court ((2020) Jing Xing Zhong No 2872), which took into account the global difference between the visual elements of the trademarks, as well as the coexistence agreement, adding that such agreement did not violate any law.
The same scenario happened when Hunter Boots, a UK-based company, filed an application for the registration of HUNTER in Class 3 (shoe cream, waxes and abrasive), which was rejected by the CTMO, citing two prior trademarks using the same word. The Beijing High Court ((2020) Jing Xing Zhong No 1117) finally considered that, given the coexistence agreement, and again the global difference between the two marks, there was no risk of confusion.
Aviko, a Dutch potato food maker, filed the trademark AVIKO TULIP, including additional Chinese characters, in Class 29 (potato pancakes and other products) but the application was rejected by the CTMO, which cited no less than 10 prior trademarks. After challenging and eliminating several of the marks before the TRAB and the Beijing IP Court, Aviko produced letters of consent signed by the two remaining trademark owners. The Beijing High Court ((2019) Jing Xing Zhong No 6070), based on such coexistence agreements, agreed that the applied-for trademark could be registered.
Peter Thomas Roth was not so lucky. His trademark was rejected by the CTMO, citing his own related company’s prior identical mark. Roth submitted his coexistence agreement and the Beijing IP Court agreed. But the Beijing High Court ((2017) Jing Xing Zhong No 761) refused to have two almost identical trademarks registered by two different entities.
Extension of reputation of a prior registration
This is a relatively rare scenario. The owner of a registered trademark (trademark N1) wishes to file a new application for another trademark (trademark N3), but a third party has successfully registered a similar trademark (trademark N2). Is the application of new trademark N3 an extension of its prior registered trademark N1? Such an argument is normally not accepted, except in very few cases.
For instance, Italian garments company Dama filed a visual trademark in Class 25, which was refused by the CTMO, citing several prior marks. Dama produced evidence of its international reputation and argued that the new trademark was a simplification of its own prior registered trademark in China, but neither the TRAB, the Beijing IP Court nor the Beijing High Court ((2020) Jing Xing Zhong No 3868) accepted the argument. The new application remained rejected.
Swiss company Novartis filed the mark ALCON in Class 9 (contact lenses). The mark was refused by the CTMO, which cited a prior trademark AICON. Novartis tried, in vain, to convince the TRAB, the Beijing IP Court and the Beijing High Court ((2019) Jing Xing Zhong No 8139) that the reputation acquired by its own prior marks should extend and benefit to its new application.
However, Gillette successfully persuaded the Beijing IP Court and the Beijing High Court to accept to register its MACH 3 application for shaving lotion in spite of an existing prior trademark ‘Mach & device’. The TRAB and the Beijing IP Court refused but the Beijing High Court ((2019) Jing Xing Zhong No 7466) acknowledged that Gillette had obtained a high reputation for razors, and that, even if there are some overlapping elements between MACH 3 and ‘Mach & device’, the registration of MACH 3 would not create a likelihood of confusion when used on shaving lotion.
Using the right of name (Article 32 of the Trademark Law)
Nicholas Kirkwood successfully opposed an application for the registration of his name in Class 9 (sunglasses). The CNIPA, the Beijing IP Court and the Beijing High Court ((2019) Jing Xing Zhong No 2653) considered that Nicholas Kirkwood is known to the public as a shoe designer, that shoes and sunglasses have a certain relation, and that the applicant was unable to provide a reasonable explanation for choosing such name.
Jeremy Shu-How Lin, the first Chinese basketball player to have been drafted in the NBA, found that his name had been registered in 2011 in Class 25 for garments. He applied to the TRAB for the invalidation of the trademark. The TRAB agreed, after verifying that, at the time when the mark was filed, the name of the basketball player was already known in China. Both the Beijing IP Court and the Beijing High Court ((2019) Jing Xing Zhong No 1230) confirmed the decision.
Basketball legend Michael Jordan was faced with an even more difficult situation. His Chinese name ("乔丹Qiaodan") had been registered for more than five years and was, therefore, "irrevocable". However, he took action before the Shanghai Intermediate Court, asking for an injunction to stop using his name. The court could not order the cessation of use but found an original solution: order the defendant to always use signs indicating that it is not related to Michael Jordan ((2012) Hu Er Zhong Min Yi (Min) Chu Zi No 1).
Utilising copyright protection (Article 32)
Copyright can be a useful tool. US company American Water Chemicals requested the invalidation of the trademark AWC registered in Class 1 (water purifying chemicals), based on its copyright on the design below. The TRAB rejected the request. The Beijing IP Court, however, recognised that the presentation of the three letters, with a wave inside, was unique and deserved to be protected by copyright and invalidated the mark. The decision was confirmed by the Beijing High Court ((2019) Jing Xing Zhong No 147).
The famous Cognac producer Hennessy registered a copyright protecting the shape of its famous bottle Paradis and launched a civil action against several brandy producers that were using this bottle. The Guangdong High Court, after Hennessy produced a statement from the designer of the bottle establishing the transfer of the right, awarded Rmb500,000 as damages ((2019) Yue Min Zhong No 1665). This protection of a work of applied art granted in the context of a civil litigation could naturally extend to the context of invalidation or opposition based on Article 32 of the Trademark Law.
Bad faith (Articles 32, 15 and 44.1)
Several cases were adjudicated on the ground of Article 32 of the Trademark Law, which protects a prior used trademark which, although not registered in China, has already reached a "certain influence" in China. The prior user of such a mark must establish that the registration has been obtained by "improper means". In such cases, "improper means" can be proven by the existence of prior business relationships, a circumstance specifically evoked in Article 15. Sometimes, Article 44.1 (obtaining registration by fraudulent means) is also involved.
In one case, German company Dr Fritz Faulhaber GmbH requested the invalidation of the trademark FAULHABER, registered in Class 7 (electronic industrial equipment), based on its prior use of the mark and on the existence of its prior business relationship with the registrant. The TRAB rejected the request. The Beijing IP Court maintained the decision, considering that the products involved were not the same (the mark had been used on machine parts, while the registration designated complete machines). The Beijing High Court ((2019) Jing Xing Zhong No 2782) reversed the decision, finding that the goods machine and spare parts were associated products and that, in view of the previous business relationships, the bad-faith subjective intention of the trademark registrant should be taken into consideration.
Elsewhere, US-based cutlery maker Ergo Chef had a distributor in China. This distributor filed an ERGO CHEF trademark application designating electric toasters, refrigerated cabinets and water purification installations. Ergo opposed the application and the CTMO agreed to reject the trademark. The TRAB and the Beijing IP Court disagreed, considering that cutlery and toasters are not similar products. The Beijing High Court ((2020) Jing Xing Zhong No 3727) reversed the decisions, finding that cutlery and toasters are similar products and considering further that the distributor of Ergo Chef had filed the trademark application in bad faith.
Nobilia is a German company specialising in fitted kitchens which owns the trademark NOBILIA in Class 20 (furniture). Nobilia requested the invalidation of the trademark NOBILIA registered by Chinese citizen Duan in Class 11 (electric heaters). The TRAB refused the request, considering that the products were not similar. The Beijing IP Court maintained the decision. However, the Beijing High Court ((2019) Jing Xing Zhong No 9579) reversed the decision, taking into account the high reputation of the NOBILIA trademark for kitchens and finding further that Duan had been squatting a significant number of other renowned trademarks, thereby committing the act of "obtaining registration by fraudulent means" under Article 44.1 of the Trademark Law.
Creaddict is a Paris-based jeweller, reputed for its brand Redline. In 2016 Creaddict filed a request for invalidation against the trademark REDLINE, which had been filed in 2010 by a Mr Chen in Class 14 (watches and clocks). The mark had been transferred to Yiquan Trading Company. Creaddict claimed and proved that Chen had falsified a licence pretending that he was self-employed. The TRAB, then the Beijing IP Court, supported the invalidation and cancelled the trademark on the ground of Article 41.1 (now 44.1, (registration obtained by fraudulent means)). The cancellation was confirmed by the Beijing High Court ((2019) Jing Xing Zhong No 4866).
Well-known trademarks (Article 13.3)
Article 13.3 of the Trademark Law provides what is called ‘cross-category’ protection. When a trademark is sufficiently known, its reputation is considered as extending to other categories of goods/services, and the decision is made on a case-by-case basis. Recent key cases are detailed below.
Claiming the well-known status of its trademark, Rolls Royce requested the invalidation of a trademark which was the transliteration of its name in Chinese (劳狮來狮) and had been registered in Class 19 (ceramic tiles, floors, marble and architectural glass). The TRAB, finding no relation between cars and floors, refused the request. The Beijing IP Court reversed the decision of the TRAB, which appealed to the Beijing High Court. The Beijing High Court ((2019) Jing Xing Zhong No 9720) upheld the Beijing IP Court's decision and maintained the invalidation.
Volkswagen requested the invalidation of DA ZHONG (大夂in Chinese characters) that had been registered in Class 7 (engine sparks plugs, auto water pumps and shock absorbers). The TRAB refused the request but the Beijing IP Court considered that the protection of well-known trademarks is not limited to associated goods and should extend to cases where the public may think that there is some association between the trademarks, which could lead to free riding on the reputation of the well-known mark. The Beijing High Court ((2019) Jing Xing Zhong No 3671) upheld the invalidation.
This article first appeared in WTR in February.