The Beijing Intellectual Property Court issued the “Guidelines for Handling Supporting Documents Certifying the Subject Qualification in Foreign-related Cases”

On December 19, the Beijing Intellectual Property Court released the statist for cases in 2023 and the “Guidelines for Handling Supporting Documents Certifying the Subject Qualification in Foreign-related Cases.”

From January to November, a total of 24,324 intellectual property cases of various types were accepted, a year-on-year decrease of approximately 7%. Among them, first-instance administrative cases such as trademark and patent authorization and confirmation cases were the most accepted types of cases, with a total of 18,867 cases accepted, accounting for 77.6%. Among the first-instance cases filed, 16,436 cases were accepted online, accounting for 81.3%. In addition, with the acceleration of economic globalization, intellectual property disputes have also become cross-regional and more international. From January to November this year, the Beijing Intellectual Property Court accepted 4,292 first-instance cases involving foreign countries, Hong Kong, Macao, and Taiwan, accounting for 21.2% of the total first-instance cases, involving more than 100 countries and regions on six continents around the world.

In order to facilitate the parties involved in foreign-related cases to exercise their litigation rights, the Beijing Intellectual Property Court compiled and released the ” Guidelines for Handling Supporting Documents Certifying the Subject Qualification in Foreign-related Cases,” which covers 6 countries including the United States, France, and Germany. Based on the previous experience in reviewing notarized and certified documents for foreign-related cases, it introduces the names, styles, processing steps of certification documents, etc., and samples that demonstrates the actual template for each jurisdiction are provided.

Should you need any additional information related to the Guidelines, please contact us!

Click HERE to download the “Guidelines for Handling Supporting Documents Certifying the Subject Qualification in Foreign-related Cases.”
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Quarterly China Trademark News Updates

October – December 2021

1. Notable trademark and anti-unfair competition cases

a. Ralph Lauren prevailed in the second instance unfair competition dispute regarding the “POLO” logo and was awarded RMB 3 million in damages

The Beijing IP Court concluded a copyright infringement and unfair competition dispute between appellants Ralph Lauren Corporation (“RLC”), Polo/Lauren Company, LP. (“PLC”) and appellees Guangzhou Gangpai Garment Co., Ltd. (“Gangpai”), Guangzhou Huaren Garment Industry Co., Ltd. (“Huaren”), Beijing Dahongmen Fuhai International Trading Co., Ltd. (“Fuhai”), which revoked the first-instance decision and ordered Gangpai and Huaren to stop using PLC’s corporate name and compensate PLC RMB 3 million in damages and RMB 100,000 in reasonable litigation expenses.

The Beijing IP Court found the following facts in its judgment:

Regarding the issue of whether the appellees use the appellants’ trade names without authorization amounted to unfair competition. First, the appellants continued to promote and use the “POLO” logo on clothing products in China through media reports and the establishment of retail stores. The “POLO” logo enjoyed high reputation among the relevant public in China. “POLO” was the main part of the trade name that the appellants have been using since their establishment. According to the relevant public’s long-term exposure of the term “POLO,” the relevant public was accustomed to using the “POLO” logo to refer to the appellants, which constituted as the abbreviation of the appellants’ trade name. Therefore, “POLO,” as the appellants’ name and abbreviation, should be protected under the Anti-Unfair Competition Law of China (“AUCL”). Second, the appellants accused Gangpai and Huaren of unauthorized use of the marks “LEYUDN POLOPOS,” “POLO SIMON, “POLO SIMON,” and “Paul Simon in Chinese & POLO SIMON.” Gangpai and Huaren argued that these were legally registered trademarks, however, these marks were invalidated by the courts. According to Article 47 of the Chinese Trademark Law 2019 and Article 30 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Administrative Cases for the Authorization and Confirmation of Trademarks (Amended in 2020), the above-mentioned trademarks were not protected by the exclusive right to use from the beginning. Therefore, the appellees’ arguments were untenable. Third, the accused clothing products such as T-shirts, casual pants, belts, etc. were identical or similar to the appellants’ famous clothing products; the alleged infringing luggage had strong relevance to clothing goods in terms of function, use, sales channels, target consumer, etc., especially in this case, where these products were all placed and sold in the same retail store, which had caused consumers to be confused. Thus, the alleged infringing goods constituted as similar goods to the appellants’. The use of “LEYUDN POLOPOS,” “POLO SIMON,” “POLO SIMON,” “Paul Simon POLO SIMON,” and other marks containing the words “POLO” on the above-mentioned accused infringing goods constituted as similar to the appellants’ trade name “POLO” in terms of overall visual appearances, which was likely to cause the relevant public to misidentify the sources of goods. Gangpai and Huaren were ordered to stop using the infringing logo, to publish news to eliminate negative impacts, and to compensate for losses.

Regarding the issue of compensation for losses, since PLC did not provide direct evidence of the actual losses suffered due to the infringement and the infringer’s gains due to the infringement, the court referred to the duration of the infringement involved, scope of implementation of the infringing actions, sales price of infringing goods, and other subjective infringing factors to ascertain an economic compensation within the scope of statutory compensation. Especially considering the fact that the official website of Gangpai introduced that “the brand “POLOSIMON” has been created since 2010, and there are nearly a hundred stores across the country,” it can prove that its infringement duration was long and the profits were huge; Gangpai has never applied for the registration of a separate “POLO” word mark, but clothing displayed in its business premises has a separate “POLO” logo, and its official website emphasized that its products “incorporate American style,” which proved that Gangpai had obvious bad faith in taking advantage of other’s goodwill. Although the appellants filed a separate lawsuit against Huaren and Gangpai’s infringement of its trademark rights and claimed financial compensation, the above facts were sufficient to prove that Huaren and Gangpai have made huge profits from the infringement and its gains obviously exceeded the amount of economic compensation claimed by the appellants. Therefore, the Beijing IP Court fully supported PLC’s economic compensation.

b. Mary Kay lost in a trademark infringement and unfair competition dispute

Recently, the Zhejiang High Court rendered a second instance judgement against Mary Kay Inc. (“Mary Kay”) in a trademark infringement and unfair competition dispute. The court found that even if barcodes were scratched, such action cannot be seen as a trademark infringement because Mary Kay’s trademark right was exhausted on first sale.

Mary Kay registered the trademarks “Mary Kay in Chinese” and “MARY KAY” in Class 3 for “cosmetics” related goods. Since Mary Kay entered China in 1995, it has continued to use and extensively publicize the said trademarks. The “Mary Kay in Chinese” trademark had relatively high fame. The defendant, Ma Shunxian, was the operator of the Taobao shop “Pink Shop Authentic Beauty Mall.” Various pictures of beauty and skin care products marks with the “Mary Kay” logo were found in the shop’s page. The shop’s front page indicated that all products sold were authentic and had explanations regarding reasons for scratched barcodes. Mary Kay sued Ma’s shop for trademark infringement and unfair competition based on the scratched barcodes to the Zhejiang Intermediate Court and requested relief to immediately stop infringement actions and pay compensation for economic loss of RMB 500,000 (USD 77,971). The Zhejiang Intermediate Court found for Mary Kay and Ma appealed to the Zhejiang High Court.

The Zhejiang High Court reasoned that in a trademark infringement case, if the alleged infringing product was a genuine product, it would be an objective fact that the product originated from the right holder, although some of the barcodes and production batch numbers of the alleged infringing product that can be traced back to the dealer’s partial information were scratched, but if the seller had fully notified the code scratching, it would not harm Mary Kay’s trademark function as to identify the source of the goods, nor would it cause confusion or misunderstanding to the relevant public. It would certain not affect consumers’ perception of Mary Kay’s product and Mary Kay’s reputation. Therefore, the trademark exhaustion principle could be applied in this case and the defendant did not infringe upon Mary Kay’s trademark.

c. Theory was awarded RMB 3.2 million in a trademark infringement and unfair competition lawsuit

The Shanghai IP Court recently rendered the final decision for a trademark infringement and unfair competition lawsuit for Theory LLC (“Theory”) against  defendants Xierrui (Shanghai) Apparel Co., Ltd. (“Xierrui”), Shaanxi Wangfujing Outlets Commercial Co., Ltd. (“Shaanxi Outlets”), Xi’an Xien Hot Spring Outlets Cultural Tourism Co., Ltd. (“Xi’an Outlets”), Shandong Bailian Haina Commercial Co., Ltd. (“Shandong Bailian”), Beijing Saite Outlets Trading Co., Ltd. (“Beijing Outlets”), Wuxi Bailian Outlets Commercial Co., Ltd. (“Wuxi Outlets”), and Nanjing Tangshan Bailian Outlet Commercial Co., Ltd. (“Nanjing Outlets”). The court revoked the first instance’s decision, ordered the defendants to immediately stop infringements, and compensate Theory for RMB 3.2 million (USD 501,500).

The Shanghai IP Court held that although the alleged infringing mark was a graphic and word mark, its distinguishing part was the word “TheoryLuxe,” and “TheoryLuxe” completely includes the word “THEORY,” which was similar to “Theory” in terms of text composition, pronunciation, and meaning. And the said mark was used on apparel products, packaging, and related commercial activities. Therefore, Xierrui’s use of the alleged infringing logo may easily cause the relevant public to confuse the source of the goods or misunderstand that there was an association between the two, and infringe upon Theory’s trademark right. Xierrui claimed that it had obtained the exclusive right to use the “TheoryLuxe” mark in Class 35 as a service mark on shop signboard, apparel product packaging, hangers, store decorations, etc. The court found that although Xierrui had the right to use “TheoryLuxe” in Class 35 as a service mark, the approved services, promotion of apparel, shoes, hats, etc. (for others), etc., the promotion services (for others) were services to provide assistive services to other’s sales but not for the mark owner itself. In this case, however, Xierrui promoted its own apparel products but not the service approved. Given that Xierrui’s use of the “TheoryLuxe” logo was able to allow its apparel products to be recognized, Xierrui had infringed upon Theory’s rights. Moreover, Xierrui’s domain name theoryluxe.com completely included Theory’s registered trademark. Xierrui used its website to introduce and promote its apparel products to the public. Xierrui used the “theory” logo on its packaging. These uses can easily cause relevant consumers to be confused regarding the source of the goods and infringe upon Theory’s rights. Likewise, Shaanxi Outlets, and Xi’an Outlets, Shandong Bailian, Beijing Outlets, Wuxi Outlets, and Nanjing Outlets all used the marks “TheoryLuxe,” “TheoryLuxe Xierrui in Chinese,” “THEORY and Xierrui in Chinese,” and “THEORY” in its respective shop’s directory and guides. Among them, Beijing Outlets also used “TheoryLuxe” and “Theory” on its Weibo. These uses infringed upon Theory’s trademark rights.

d. Beijing Chaoyang District Court issued an injunction for the first direct one-sided price comparison case in China

In October 2021, the Beijing Chaoyang District Court rendered a favorable decision for Markor International Home Furnishings Co., Ltd. (“Markor”) against the defendants Baichuan Times (Beijing) Trading Co., Ltd. (“Baichuan Times”), Beijing Baichuan United Technology Development Co., Ltd. (“Baichuan United”), and Baichuan Wujie (Beijing) Technology Co., Ltd. (“Baichuan Wujie”) for behavior preservation in a trademark infringement and unfair competition dispute. The court ordered the defendants to immediately stop one-sided price comparison of the Markor brand and stop using the slogans “remove the undue price bubble,” “restore the original price,” and “the product price is the lowest in the industry.”

Markor and the three defendants are owners of American styled furniture companies. Markor owns the trademarks “Meike Meijia in Chinese and MarkorFurnishings,” “Palaluoli in Chinese.” The three defendants are affiliated companies who promoted as a whole through brick and mortars, websites, WeChat public accounts, Weibo, and exhibitions. In its promotions, the defendants did not fully disclose its products’ quality, size, raw materials, production technology, and after sale services but excessively focusing on price comparison against Markor’s products while claiming its “products have the lowest price in the industry” because it has “removed the undue price bubble” and “restore the original price” of the products. Such promotions would easily cause confusion to the public that Markor’s prices were marked up. The defendants’ actions amounted to false advertisement and commercial slander of unfair competition.

The defendants promote online and offline within a broad peripheral, if the said actions were left untreated, the relevant public was likely to continue to be mistaken and falsely believe that Markor’s products prices were marked up, which would increase the popularity of the defendants’ products on the market and harm Markor’s goodwill and market share. If such actions were not stopped, the potential harm to Markor would be irreparable. Accordingly, the court supported Markor’s request to have the defendants remove the said slogans and order Baichun Times to stop using “Palaluooli in Chinese” as a slogan in selling its furniture.

e. Hyatt won well-known mark recognition in court appeals

Recently, the Beijing High Court rendered a second instance judgment, affirming “Hyatt in Chinese” in respect of hotel services has constituted a well-known mark and accordingly invalidated the registration of “HyattSen in Chinese (凯悦森) and HyattSen” on clothing and other goods in class 25.

Zhi-Peng Corporation applied the mark “HyattSen in Chinese and HyattSen” (presented as HyattSen in Chinese stacked on HyattSen)(“Disputed Mark”) in 2014 on clothing, belts, gloves, swimming suits, tops, pants, shoes, hats, hosiery, and ties. Hyatt cited its registrations of “Hyatt in Chinese” and “HYATT” in class 43 in an opposition and later an invalidation against the Disputed Mark, but received unfavorable decision on both proceedings.

Hyatt brought the invalidation case to the Beijing IP Court and obtained a favorable judgment based on the well-known mark clause.

The court found that: Hyatt submitted publicity reports on many newspapers, magazines, and websites from 2000 to 2013, award rankings, hotel introductions, protected records, and other evidence, which can prove that through continuous use and extensive promotion, the cited mark “Hyatt in Chinese” has gained high reputation in hotel services and is widely known by the relevant public. Therefore, the evidence in the case can prove that the cited mark “Hyatt in Chinese” has constituted a well-known trademark on hotel services. The Disputed Mark contains the cited mark “Hyatt in Chinese” in its entirety, the two marks are similar in terms of composition, pronunciation, and overall appearance. So the Disputed Mark has constituted a copy and imitation of the cited mark. Although clothing and other goods designated under the Disputed Mark fall into a different class from the hotels services under the cited mark “Hyatt in Chinese,” those goods and services all belong to the field of daily consumables and the target consumers are also related in a certain extent. In the case that the Disputed Mark has constituted a copy and imitation of the cited mark, the relevant public could easily deem the registrant of the Disputed Mark is closely related to the registrant of the cited mark, thereby weakening the distinctiveness of the cited mark or improperly taking free ride of the goodwill of the cited mark. Such misleading is likely to damage Hyatt’s rights based on its well-known mark. Accordingly, the application for registration of the Disputed Mark has violated Article 13 of the Chinese Trademark Law and should not be approved for registration.

The CNIPA disagreed and further appealed the case to the Beijing High Court. The second instance court affirmed the first instance judgment, holding that:

According to the evidence, it can be determined that before the application date of the Disputed Mark, the cited mark “Hyatt in Chinese” had been widely known by the relevant Chinese public in hotel and other services and had constituted a well-known mark. The Disputed Mark is composed of the Chinese characters “HyattSen in Chinese” and the English letters “HyattSen,” of which “Hyatt in Chinese” is the distinctive and recognizable part for the mark; the two marks are similar in terms of composition and pronunciation. Given the fame of the cited mark and the recognition sensitivity of the public, the Disputed Mark has constituted a copy or imitation of the cited mark. Although the clothing goods under the Disputed Mark and the hotel services fall into different classes in the Similar Goods and Services Classification, these goods and services are closely related in terms of target consumers. As the mark “Hyatt in Chinese” has been widely known to the public, upon seeing the Disputed Mark being used on the above-mentioned goods, the public is likely to associate it to the well-known mark of Hyatt. Based on such association, the relevant public may mistakenly believe that the Disputed Mark has a certain connection with the well-known mark of Hyatt, thereby misleading the public and splitting the inherent connection between the cited mark and Hyatt’s services in hotels, which would further lead to the detrimental consequences of weakening the distinctiveness of the Hyatt’s well-known mark and harming the legitimate rights and interests of Hyatt.

f. MUJI prevailed against Wuyinliangpin in a trademark infringement lawsuit

Based on its “Wuyinliangpin (MUJI in Chinese)” registered trademark in Class 20 for “pillow” related goods (“Cited Mark”), MUJI sued Beijing Wuyinliangpin Investment Co. Ltd. (“Wuyinliangpin”) for using the Disputed Mark on its u-shaped pillow product without authorization and infringed upon MUJI’s trademark rights. Wuyinliangpin defended by citing its licensed trademark “Wuyinliangpin” in Class 24 for “fabrics; pillowcase, duvet.”

The court found that the said goods in Class 20 and Class 24 largely overlapped in function, use, and target consumer. Given that both parties have its registered or licensed trademarks, both parties should use its trademarks within the scope of its approved goods. The alleged infringing products in this case were labeled as “u-shaped pillowcase” or “neck pillowcase,” but the products photo showed “u-shaped pillow with filler.” The invoice showed the product name as “textile product neck cushion.” Thus, the alleged infringing product was in fact a neck pillow product, which falls into the same product category as the Cited Mark’s approved goods “pillow.” Meanwhile, Wuyinliangpin prominently used its licensed mark “Wuyinliangpin” on the alleged infringing product’s hangtag, packaging, washing labels. Wuyinliangpin’s licensed mark and MUJI’s registered trademark had identical composition, pronunciation, and meaning, and the only differences were the use of simplified and traditional Chinese. The two marks were similar marks. Accordingly, the first instance’s decision against Wuyinliangpin was affirmed.

g. New Balance prevailed again in the second instance court winning RMB18 million in damages

New Balance Athletics, Inc and New Balance Trading (China) Co., Ltd. (together as “New Balance”) sued Putian Shengfengsheng Shoes Co., Ltd. (“Shengfengsheng”), Putian Wobaili Trading Co., Ltd. (Wobaili”), Wang Jinbiao, Gusu District Meibailu Shoe Store (“Meibailu”) for infringing its registered trademark the “N” logo on Class 25 for “sneakers” (“Cited Mark”) in Suzhou Intermediate Court. The defendants cited its registered trademark “N & design” (“Disputed Mark”).

Disputed Mark	Cited Mark

The court found that New Balance is the registrant of the Cited Mark and New Balance is the authorized party in China, which gave New Balance the exclusive right to use the trademark and its rights should be protected under the law. The alleged infringing product are sneakers, which prominently used the N logo on two sides of the shoe and significantly weakened the arrow design appeared at the lower portion of the Disputed Mark. When paying ordinary attention, consumers could recognize the Disputed Mark as used appeared as an “N” logo in bold font, which was highly similar to the Cited Mark. Considering New Balance have been selling sneakers with the N logo for many years through continuous promotion and publicity, its N logo has obtained relatively high fame. Thus, the Disputed Mark was likely to cause confusion and mistake the public regarding the source of the goods of the two marks. The evidence also proves that there were actual confusions on the market. Therefore, the Disputed Mark constituted as an infringement on the Cited Mark. Meanwhile, the New Balance sneakers have been using the N logo on two sides of the shoes as its decoration for a fairly long time. With extensive publications, the N logo can be seen as a special decoration of New Balance’s sneakers. Wobaili and Shengfengsheng, as competitors in the industry, knowing the popularity of New Balance sneakers and the distinctiveness of using the N logo on both sides of the shoes, they still used the unique decoration of well-known goods without authorization. Their actions showed subjectively malicious to free-riding others fame, and objectively crouching a large number of New Balance sneakers market share, which violated the good faith principle and amounted to unfair competition. Comprehensively considering the circumstances of the case, the first instance court ruled that the three defendants should compensate New Balance for economic losses and reasonable expenses of RMB18 million. The second instance court upheld the judgment of the first instance court.

h. Christian Louboutin prevailed in a trademark infringement against an online reseller

Christian Louboutin is one of the world’s leading designer brands for men’s and women’s shoes, bags, and related accessories created in 1991 by Christian Louboutin himself. The Christian Louboutin brand has become a world-famous manufacturer of luxury shoes and opened retailers in more than 60 countries. Christian Louboutin registered the “CHRISTIAN LOUBOUTIN” mark, the “Louboutin” mark, and the “Louboutin and Design” mark in China. Lanli Co. opened a store named “Guangzhou Lanli International Trade Co., Ltd.” on the 1688 platform, used the said trademarks without Christian Louboutin’s authorization, and sold goods that infringed the said trademarks. Another company, Shiyu, posted a moment story on a WeChat account using the said trademarks without authorization and sold goods that infringed the said trademarks. The infringing activities of Shiyu can be traced back to 2015, which lasted for quite some time.

Lanli Co. and Shiyu jointly sold infringing goods, but did not submit evidence to prove the source of purchase of the infringing goods at issue. In addition, Lanli Co. operated the shop involved in this case as a manufacturer and advertised in details that “the disputed shoes can be customized and all shoes can be made.” Combining with Shiyu’s statements, such as “we are manufacturer” “can start making shoes tomorrow,” etc. the court found both Lanli Co., and Shiyu were manufacturing the infringing goods.

Lanli Co. and Shiyu produced and sold the infringing goods at issue, which infringed upon Christian Louboutin’s registered trademark rights, and the court ordered the defendants to pay the Christian Louboutin RMB150,000 (USD23,540) in damages.

i. Kluber Lubrication won over RMB 2 million in damages in a trademark infringement lawsuit

On November 29, 2021, the Shanghai IP Court made a final judgment in the case of Kluber Lubricant (Shanghai) Co., Ltd. (“Kluber Shanghai”) against Shanghai Xinyu Lubrication Technology Co., Ltd. (“Xinyu”), Zou Ming and Yuan Jianguo for trademark infringement disputes, and affirmed the first instance judgment. Xinyu and Zou Ming should jointly and severally compensate Kulber for economic losses of RMB2 million (USD313,819) and reasonable expenses of RMB150,000(USD23,536).

There are two types of alleged infringements in this case. One was filling other brands of lubricants as “Kluber in Chinese” brand lubricants. The other was filling large bottles of “Kluber in Chinese” brand lubricants into small bottles of “Kluber in Chinese” brand lubricants.

As Xinyu’s legal representative and actual controller, Zou Ming organized Xinyu’s employees, including Yuan Jianguo et al., to pack low-priced lubricants of other brands into customized containers, affix the self-printed Kluber trademark and sell the lubricant under the guise of Kluber. Under the Chinese Trademark Law, said action performed without Kluber’s authorization and used a mark identical to Kluber’s registered trademarks on identical goods, which violated Kluber’s trademark right.

The issue in this case was whether the sub-packaging acts of the accused genuine lubricant involved in this case constituted trademark infringement may be analyzed from the following aspects:

1. The alleged act of attaching a trademark to a small bottle for sub-packaging falls within the use as mentioned in the Chinese Trademark Law. In this case, Zou Ming instigated his employees to purchase 1kg of lubricant cans from the market, load the genuine large “Kluber” lubricant bottle into the aforesaid small bottle, and affix the forged registered trademark that were made. The attachment of such a trademark did not change the function of identifying the source of the trademark. Therefore, Zou Ming’s use of the trademark involved in this case was not within the reasonable scope of use, and thus he could not be deemed to have used the registered trademark of Kluber in good faith.
2. The accused sub-packaging damaged the quality assurance function of the trademark. The act of sub-packaging of goods will involve the change of the original packaging or product itself, so that the sub-packaged goods are different from the original goods, and the owner has lost control of the quality of goods, such change may directly affect or even damage the owner’s reputation of goods. Especially for lubricant, which is a product that has strict storage conditions and refined internal material requirements, which make the quality assurance function of the trademark more prone to damage.
3. The principle of exhaustion of trademark rights shall not apply to the accused act of sub-packaging. Xinyu, as a dealer of Kluber, purchased genuine Kluber lubricant, and its source of products was legal. However, when Xinyu resold the lubricant, it damaged the packaging of the lubricant for its own greater benefit, or labeled low-grade lubricant as high-grade ones, which damaged the quality of products and the fame of the trademark owners. Therefore, the sub-packaging involved in this case shall not be governed by the principle of exhaustion of trademark rights.

Accordingly, the sub-packaging involved in this case fall within the trademark infringement act of “causing other damage to the exclusive right of others to use a registered trademark” as prescribed in Article 57(7) of the Chinese Trademark Law.

j. Sale of Michael Kors parallel imports were found to infringed upon Michael Kors’ trademark rights

The Dongguan Intermediate Court of Guangdong Province recently concluded a trademark infringement case between Michael Kors (Switzerland) International Co., Ltd. (“Michael Kors”), Shanghai Yiteng Brand Management Co., Ltd. (“Shanghai Yiteng”), Dongguan International Trade City Branch, Shanghai Yiteng Brand Management Co., Ltd. (Shanghai Yiteng), etc. The court upheld the first instance court’s judgment that Shanghai Yiteng’s sale of parallel imported “MK” handbags constituted infringement.

In this case, the court found that the alleged infringing products were the same as the products approved for use in the registered trademark of Michael Kors. “MICHAELKORS” and “MICHAELMICHAELKORS” used on the alleged infringing products sold by Shanghai Yiteng were the same as the registered trademarks of Michael Kors. The use of “MKMICHAELKORS” on the packaging of the alleged infringing products sold by Shanghai Yiteng constituted trademark use in the meaning of the Chinese Trademark Law, which was similar to the registered trademark of Michael Kors, and was likely to cause confusion among the relevant public. As the owner of the exclusive right to use the registered trademark involved in this case, Michael Kors issued an appraisal report after appraising the alleged infringing handbag and confirmed in the first instance trial that the alleged infringing products were not authorized products produced by Michael Kors. Shanghai Yiteng claimed that the alleged infringing products were genuine products purchased from Yunnan Aishe Trading Co., Ltd. through parallel import, and the alleged infringing products sold by it had lawful sources. Since the registered trademark involved in this case has a relatively high popularity in China, Shanghai Yiteng, as a company specialized in selling alleged infringing products, shall have a higher duty of care when purchasing from lawful sources. The scanned copies of its sales contracts, bank transfer records, the power of attorney issued by Shenzhen Huarui Ri-Sun Watch Co., Ltd., and the Import Goods Declaration Form and other evidence submitted by Shanghai Yiteng could not prove the corresponding relationship between the alleged infringing products it sold and the goods indicated in the Import Goods Declaration Form. Shanghai Yiteng failed to prove that the entire procurement channel for the alleged infringing products it sold and the products it obtained were genuine products obtained through parallel imports. Therefore, the evidence submitted by Shanghai Yiteng could not negate the arguments of Michael Kors regarding the non-genuine products, and its claim that the infringing products were parallel imports lacked sufficient evidence. In accordance with Article 57(3) of the Chinese Trademark Law, the sale of the alleged infringing products by Shanghai Yiteng infringed upon Michael Kors’ exclusive right to use its trademark.

k. The Beijing High Court cited claim preclusion in affirming the “Rejoice in Chinese” trademark invalidation case

The “Rejoice in Chinese” trademark (“Disputed Mark”) was filed by an individual He Dun on September 19, 2002. Proctor & Gamble (“P&G”) filed an opposition against the Disputed Mark when the Chinese Trademark Law 2001 was still in force. The Disputed Mark was later approved for registration after an opposition appeal, first instance, and second instance appeals.

While the Chinese Trademark Law 2013 was in force, P&G filed an invalidation against the Disputed Mark. After adjudication, the CNIPA invalidated the Disputed Mark because the Disputed Mark violated Article 13(2) of the Chinese Trademark Law 2013. He Dun was unsatisfied with the CNIPA’s decision and appealed to the Beijing IP Court.

The Beijing IP Court found that the opposition filed by P&G in 2001 has clearly cited P&G’s prior registered trademark “Rejoice in Chinese” and claimed that the Disputed Mark violated Article 13(2) of the Chinese Trademark Law 2001, which was an identical claim to this case. Evidence submitted for this case were identical to those submitted for the opposition filed based on the Chinese Trademark Law 2001, the evidence cannot reflect whether the time of its formation was after the opposition decision was made, there were no evidence showing that there were circumstances that could not be previously obtained due to objective reasons, or the evidence would have substantially affected the application of Article 13(2) of the Chinese Trademark Law 2001 in the opposition. Thus, P&G’s invalidation constituted as claiming identical facts and reasons to a prior case, which violated the principle of claim preclusion. P&G’s new citation of its registered trademark “Rejoice & Rejoice in Chinese & Design” did not violate the principle of claim preclusion, but the registration date was later than the application date of the Disputed Mark. Even if such mark was recognized with well-known mark status, P&G would not be able to prove that such mark had obtained well-known status prior to the Disputed Mark’s application date, because well-known mark protection for non-similar or non-identical goods can only extend to the registration date of the well-known mark. Accordingly, the Beijing IP Court concluded that the P&G’s invalidation was claim precluded because the same issue was previously decided on merit citing Article 13(2) of the Chinese Trademark Law, and revoked the CNIPA’s invalidation decision. The Beijing IP Court’s decision was then appealed to the Beijing High Court.

The Beijing High Court in its decision affirming the Beijing IP Court’s decision reasoned that “the scope of the administrative power of the court for trademark granting and verification shall generally be determined based on the plaintiff’s litigation claims and reasons. If the plaintiff did not raise a claim in its complaint but the relevant findings of the Trademark Review and Adjudication Board were obviously improper, the court may review the relevant matters and make judgments after the parties have stated their opinions.” The evidence in the case can prove that He Dun filed and obtained hundreds of trademarks identical or similar to other famous trademarks in Classes 3, 5, 16, 20, 24, 30, and 32, and failed to provide reasonable explanations on his intention and creative sources of the designs of his massive filings for distinctive and famous trademarks, which can be seen as He Dun has the subjective malice of plagiarizing and imitating others’ trademarks, and constituted as bad faith registrations that should not be limited by the five-year limitation for filing invalidation under the Chinese Trademark Law. Considered that the CNIPA’s invalidation decision was revoked and the CNIPA was ordered to issue a new decision for the Disputed Mark, the Beijing High Court ordered the CNIPA to reexamine the case based on Article 45(1) of the Chinese Trademark Law for He Dun’s bad faith.

2. Notable trademark laws, regulations, and news updates

a. Starting January 1, 2022, the CNIPA will no longer issue paper trademark certificates

Recently, the CNIPA announced that starting from January 1, 2022, applicants who filed paper trademark applications will receive a “Notice of Issuing a Trademark Registration Certificate,” and the trademark registrant can use the web address and access code provided to retrieve electronic trademark registration certificate from the Trademark Office’s website. Applicants who filed trademark applications electronically can log into the Trademark Office’s online platform to view, download, and print electronic trademark registration certificate. The CNIPA will no longer issue paper trademark registration certificates.

b. The CNIPA has cracked down on 376,000 malicious trademark registration applications in 2021

Since this year, the CNIPA has launched a special campaign to severely crack down on abnormal patent applications and malicious trademark registration. The CNIPA has focused on high quality development of intellectual property rights, launched a crackdown on malicious trademarks, and cumulatively cracked down on 376,000 applications for malicious trademark registration.

c. The CNIPA: Stop handling the trademark agency business of these two companies for 12 months / forever!

On December 10, 2021, the CNIPA issued two administrative penalty decisions: Permanently stop accepting the trademark agency business of Jiangsu Bainian Trademark Agency Co., Ltd. (“Bainian”), and stop accepting the trademark agency business of Guangzhou Zhongchuang International Brand Management Co., Ltd. (“Zhongchuang”) for 12 months.

In the process of engaging in trademark agency business, Bainian, in order to avoid the requirement that trademark agency companies cannot apply for registration of trademarks other than trademark agency services, it preemptively registered trademarks that were previously used by others and have certain influence in the names of three affiliated companies. A malicious trademark application for the purpose of use violates the principle of good faith and constitutes Article 19(3) of the Chinese Trademark Law, which states that trademark agency knows or should know that the trademark applied for by the client belongs to Article 4, Article 15, and Article 32 of this law shall not accept their entrustment.” Article 19(4) states that “trademark agencies shall not apply for the registration of other trademarks except for the registration of trademarks for their agency services.” Bainian implemented the above-mentioned illegal acts, which showed its subjective bad faith, and the duration of its operation was long, and there were a large number of malicious trademark applications, which seriously disrupted the order of trademark registration management, which should be considered as serious circumstances. In accordance with the provisions of Article 68(1)iii of the Chinese Trademark Law, Article 68(2) and Article 90 of the Regulations for the Implementation of the Trademark Law, the CNIPA decided to permanently stop accepting trademark agency business from Bainian, and announced this news on the CNIPA’s website.

Entrusted by 58 overseas companies, Zhongchuang filed 224 trademark applications with the CNIPA that were identical or similar to the trademarks registered and used by others, which interfered with the normal trademark examination, and at the same time, its behavior had server impact against some of the other companies, which belonged to the situation of “disrupting the order of the trademark agency market by other improper means” and “serious circumstances” as stipulated in Article 68(1)ii of the Chinese Trademark law. According to Article 68(1)ii, Article 68(2), and Article 90(1) and (2) of the Regulations for the Implementation of the Trademark Law, the CNIPA decided to stop accepting the trademark agency business of Zhongchuang for twelve months and announce this news on the CNIPA’s website.

d. The Standards for Judging General Trademark Violations was recently issued by the CNIPA with a view to further tightening trademark administration

The CNIPA recently issued the Standards for Judging General Trademark Violations (“Standards”), which unify the standards for judging violations of the trademark administration order, with a view to strengthening trademark administration, unifying law enforcement standards, and improving law enforcement.

The Standards include 35 articles and detail nine types of violations against the administrative order of trademarks, including the failure to use of a registered trademark as prescribed by the existing Trademark Law, regulations and departmental rules, the use of a mark that shall not be used as a trademark, the use of the word “well-known trademark in Chinese” in commercial activities, the failure of a trademark licensee to indicate its name and the place of origin of goods, the change of a registered trademark, the name, and address of a registrant by itself, falsely using of an unregistered trademark as a registered trademark, failure to perform the obligation of managing collective trademark and managing certification trademark, filing bad faith trademark application. The Standards shall come into force on January 1, 2022.

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Quarterly China Trademark News Updates

July – September 2021

1. Notable trademark and anti-unfair competition cases

a. The Beijing High Court rejected a retrial petition filed by Beijing Wuyinliangpin against MUJI

On July 13, 2021, the Beijing High Court rejected a retrial petition filed by Beijing Miantian Textile Co., Ltd. (“Beijing Miantian”) against Muji (Shanghai) Commercial Co., Ltd. and Beijing Chaoyang Third Branch of Muji (Shanghai) Commercial Co., Ltd. (together as “MUJI”).

Beijing Miantian owns registered trademarks “Wuyinliangpin in Chinese” in class 24 for “cotton textiles and towels.” These trademarks were licensed to Beijing Wuyinliangping Investment Co., Ltd. for use in China. Ryohin Keikaku Co., Ltd. owns the “MUJI” registered trademark in class 24, the “Wuyinliangping in Chinese” registered marks in class 16 and class 35, and the “Wuyinliangping in Chinese and MUJI” registered mark in class 35. Ryohin Keikaku Co., Ltd. licensed the said trademarks to MUJI for use in China. Beijing Miantian sued MUJI alleging that MUJI’s use of the “Wuyinliangpin in Chinese” mark on store signboard, header of the shopping receipt, and shopping bags infringed upon its registered trademarks “Wuyinliangpin in Chinese” in class 24 for “cotton textiles and towels.”

The court found that MUJI’s use of the “Wuyinliangpin in Chinese” mark on its signboard shall be considered as use on selling general merchandise goods. The use of the “Wuyinliangpin in Chinese” logo on the header of the shopping receipt was the unified format of the shopping receipt provided by the store when selling goods, and did not specifically point to towels, quilts or other specific products. Such use still constituted as trademark use in providing general merchandise sales services. Except for the “Wuyinliangpin in Chinese and MUJI” logo on the outside, no other words were printed on the body of the disputed shopping bag. From the appearance, the disputed shopping bag cannot be seen to have a specific connection with the goods approved for use under Beijing Miantian’s trademarks in this case. Meanwhile, MUJI was authorized by its parent company, Ryohin Keikaku Co., Ltd., the right to use the “Wuyinliangpin in Chinese” trademark in class 16 for packaging paper bags and other goods. The court found that MUJI’s uses of the disputed trademarks on its store signboard, head of the shopping receipts and shopping bags were trademark use in the process of sales services, which were not identical with or similar to approved goods under Beijing Miantian’s trademarks and did not constitute as trademark infringement.

b. Schneider China won a RMB 3 million judgement against malicious and repeated trademark infringement

On July 21, 2021, the Beijing Chaoyang District Court heard a trademark infringement case involving Schneider China and fully supported Schneider China’s economic losses claim of RMB 3 million (USD 462,600).

In January 2013, Schneider China filed a complaint against the defendant Hangzhou Dongheng Company’s predecessor Hangzhou Schneider Electric Co., Ltd. (“Dongheng”) for trademark infringement, and using the “Schneider” brand name in corporate names and publicity before the Hangzhou Xiacheng District Court. Through mediation by the court, Dongheng ceased its infringement, changed its company name, and compensated Schneider China for economic losses and reasonable expenses of RMB 100,000 (USD 15,419).

The Beijing Chaoyang District Court’s investigation revealed that after the mediation was concluded, Dongheng had since continued to use the “Schneider” trademark extensively throughout its official website. Meanwhile, in the “China Supplier Network” operated by a technology company in Beijing, Dongheng also had a product display page which used a large number of Chinese and foreign trademarks of “Schneider/Schneider in Chinese” in the company and products introductions. The said use continued until 2019.

The Beijing Chaoyang District Court found that Dongheng’s use of the “Schneider” and “Schneider/Schneider in Chinese” logos on its website and web pages constituted trademark infringement. Considering that Dongheng was a repeated infringer, its subjective malice was obvious, the infringement duration was long, and the fame of Schneider’s trademark, the court fully supported its compensation claim of RMB 3 million (USD 462,600).

c. Ralph Lauren was found not infringing in a second instance decision

Guangzhou Aichi Leather Co., Ltd. (“Aichi”), the owner of the “POLO” mark in class 18 “wallets, school bags, small wallets, handbags, travel bags (cases), etc.,” sued Ralph Lauren to the Beijing Chaoyang District Court, requesting an order to stop the infringement and compensate for economic losses and other legal expenses.

The Beijing Chaoyang District Court found that Ralph Lauren’s prominent display or independent use of “POLO” on the alleged infringing products and tags could easily cause relevant consumers to be confused and misidentify the source of the goods, which infringed on Aichi’s trademarks rights. Considering factors such as the location, scale, quantity, and duration of the stores operated by Ralph Lauren, the unit price of the alleged infringing goods, and the degree of subjective fault of Ralph Lauren, the Beijing Chaoyang District Court ordered Ralph Lauren to compensate Cichi for economic losses of RMB 3 million (USD 462,900).

Ralph Lauren appealed to the Beijing Intellectual Property Court. The court recently made a final judgment in favor of Ralph Lauren’s appeal request, revoked the first instance judgment and dismissed Aichi’s request. The court found that: although the word “POLO” was embroidered or highlighted on some of the goods, from the perspective of the specific usage and usage scenarios of the alleged infringing mark, the said allegedly infringing goods were all displayed and sold at Ralph Lauren shops, and all labeled with “RALPH LAUREN” and “Ralph Lauren Trading (Shanghai) Co., Ltd.,” which clearly indicated the provider of the alleged infringing goods. On the contrary, Aichi did not provide evidence of use of the disputed trademark on the allegedly infringing goods and its trademark had obtained certain influence through use. Therefore, when consumers entered Ralph Lauren stores to purchase related goods, they would clearly recognize that the goods they bought were from Ralph Lauren without associating them with Aichi, or mistakenly believing that there is specific relationship between the two entities. Accordingly, the use of the alleged infringing mark would not cause the relevant public to confuse or mistake the source of the goods.

As far as the subjective intention of taking advantage of other’s goodwill, the evidence in the case proved that Ralph Lauren’s registration of multiple “POLO” and “POLO RALPH LAUREN” trademarks in multiple related classes, and the extensive promotion and use of “POLO” and “RALPH LAUREN” on clothing and other goods has established a stable correspondence between the “RALPH LAUREN” logo with Ralph Lauren and its affiliates and has gained a certain degree of popularity and influence. Therefore, Ralph Lauren’s selling of the allegedly infringing goods in its stores did not have subjective bad faith in taking advantage of Aichi’s goodwill.

Accordingly, although Aichi had the right to claim trademark rights as the legal rights holder, Ralph Lauren’s use of the alleged infringing mark will not cause market confusion. The Beijing Chaoyang District Court erred in its findings and should be amended.

d. The “BVLGARI and BVLGARI in Chinese” mark was recognized as a well-known mark

Bulgari S.P.A. (“Bulgari”) filed an invalidation request against Cai Qinghe’s trademark (“Disputed Mark”) based on its prior trademark in Class 14 and International trademark in Class 42.

Disputed Mark	Bulgari Prior Mark in Cl. 14	Bulgari Prior Mark in Cl. 42

Upon hearing, the Beijing High Court found that the invalidation request was filed on April 2, 2017, more than five years after the Disputed Mark’s registration date (November 6, 2011). Therefore, Bulgari’s invalidation request based on Article 28 and Article 31 of the Chinese Trademark Law 2001 (“TM Law 2001”) shall be rejected. However, combined with the journals and magazines submitted by Bulgari and various media reports on Bulgari regarding its “BVLGARI and BVLGARI in Chinese” brand jewelries and watches, national library search reports, award certificates and materials, introduction to the distribution of Bulgari specialty stores, and the lease contract of its China retail stores, lease contracts and photos of its China franchised stores and watch counters, sales invoices and bank card slips, records of administrative and judicial protection of the “BVLGARI and BVLGARI in Chinese” trademark, and other evidence can prove that Bulgari has carried out long-term and continuous promotion and sales of its “BVLGARI and BVLGARI in Chinese” jewelries and watch products in China. Bulgari had obtained a wide range of publicity and high sales income. Based on the foregoing, it can be determined that Bulgari’s prior mark in Class 14 had obtained a great reputation and influence on “decoration (jewelry); watch” related goods and had been widely known to the public, which constituted as a well-known trademark under Article 13 Paragraph 2 of the TM Law 2001. The Beijing High Court concluded that the Disputed Mark’s registration improperly took advantage of Bulgari’s well-known trademark’s market reputation and damaged its rights, which violated Article 13 Paragraph 2 of the TM Law 2001.

e. Dr. Martens’ “Marten Boots in Chinese” was found to be lack of distinctiveness

Dr. Martens International Trading GmbH is the owner of the well-known footwear brand “Dr. Martens.” Its Chinese trademark “Marten boots in Chinese” in Class 26 was rejected by the China National Intellectual Property Administration (“CNIPA”) because the mark directly referred to the function and purpose of the goods. After the first and second instances, both the Beijing Intellectual Property Court and the Beijing High Court found that “Marten boots” is a type of leather shoes, and when such mark was used on “shoelaces” and related goods in Class 26, it directly indicated the function and purpose of the goods. Such use was difficult to distinguish the mark and the source of goods based on the relevant consumer’s knowledge. Moreover, Dr. Martens did not submit sufficient evidence to prove that the “Marten Boots in Chinese” mark had obtained distinctiveness through its use (Beijing East IP’s search of the prosecution history of “Marten Boots in Chinese” revealed that the mark in Classes 25 and 35 was also rejected based on the same reasoning).

f. Universal Pictures was awarded RMB 5.1 million in compensation in a “Minions” copyright dispute

Recently, the Jiangsu High Court rendered a favorable decision for Universal Pictures against defendants Cangzhou Qianchixue Food Co., Ltd. (“Qianchixue”), Jingbaojiang, Jingshusong, Wangzi Beverage (Guangzhou) Group Co., Ltd. (“Wangzi”), Guangdong Tainiu Vitamin Beverage Co., Ltd. (“Tainiu”), Wuxi Weiwei in a copyright dispute involving the “Minions” copyright. The court affirmed the first instance court’s decision and ordered the defendants, except Wuxi Weiwei, to pay RMB 5 million (USD 788,400) altogether and ordered Wuxi Weiwei to separately pay RMB 100,000 (USD 15,458) in compensation to Universal Pictures.

Universal Pictures is a world-renowned film and television studio. After being released in China, the Minions film series gained enormous reputation. Without the authorization of Universal Pictures, Qianchixue mass-produced and sold dairy beverages with a graphic that was substantially similar to the “Minions.” Before the alleged infringing products were put on the market, other beverage companies had obtained authorization to use the “Minions” image from Universal Pictures. Qianchixue’s infringing products affected the sales of licensed products by other legal licensees. The court ruled that although the alleged infringing image used by the alleged infringing product was slightly different from the artwork involved, it included many main original features of the “Minions,” which constituted as substantially similar.  Without the permission of Universal Pictures, Qianchixue used the involved artwork on the alleged infringing products, manufactured, sold, publicized and promoted the alleged infringing products, infringing the reproduction and distribution right of the involved artwork. The defendants Jingbaojiang and Jingshusong facilitated Qianchixue’s alleged infringing activities, which constituted as joint infringement. The defendants, Tainiu and Wangzi, as the trademark owners and licensees of the alleged infringing products involved in the case, had a close interest and cooperation relationship with Qianchixue, which constituted joint infringement. Wuxi Weineng sold the alleged infringing products online, which constituted as infringement, and was ordered to separately compensate Universal Pictures for RMB 100,000 (USD 15,458).

g. “NEW BALANCE” ousted “New bunren”

On August 13, 2021, the Beijing High Court affirmed the first instance court decision in favor of the CNIPA over a trademark invalidation dispute.

Disputed Mark	Cited Mark

The Disputed Mark was approved for registration on January 7, 2011, and New Balance filed an invalidation petition on June 28, 2018, after the five-year statute of limitation on filing an invalidation petition against a registered trademark. The CNIPA, however, found that the Disputed Mark constituted as maliciously imitating other’s well-known registered trademark under Article 13(3) of the Chinese Trademark Law, and concluded that New Balance’s invalidation petition was not limited by the five-year statute of limitation.

The Beijing High Court affirmed the first instance court decision finding that New Balance had submitted sufficient evidence proving that the Cited Mark was widely known and enjoyed high fame among the relevant public on “shoes” related goods and constituted as a well-known mark.

Article 13(3) of the Chinese Trademark Law protects well-known trademarks in China and is applicable to registered trademarks. The legislative intention of Article 13(3) is to provide stronger protection to well-known trademark than general registered trademarks. If identical or similar trademarks are registered or used on identical or similar goods approved for the well-known trademark, the consequential damage on the well-known trademark is obviously higher than those trademarks registered or used on different or dissimilar goods. Therefore, applying for trademark registration by copying, imitating, and translating other’s registered well-known trademark on “identical or similar goods” shall be regulated by Article 13(3).

In this case, both the Disputed Mark and the Cited Mark contained “NEW,” while the pronunciation of “BALANCE” and “bunren” was similar, thus, the Disputed Mark and the Cited Mark were similar in terms of word compositions, pronunciations, overall appearances, and visual effects. The Disputed Mark constituted as an imitation of the Cited Mark. The goods approved for the Disputed Mark were identical or similar to the shoes related goods approved under the Cited Mark in terms of function, use, production department, sales channels, consumers, etc., which constituted as identical or similar to the Cited Mark’s approved goods. Where the Cited Mark has constituted a well-known trademark and the Disputed Mark is an imitation of the Cited Mark, when purchasing goods approved for use by the Disputed Mark, the relevant public would easily believed that such goods had certain association with the Cited Mark, which would weaken the Cited Mark’s distinctiveness and damage New Balance’s interests obtained through its well-known Cited Mark. The Court concluded that the Disputed Mark violated Article 13(3) and shall be invalidated.

h. The mark “MOPIDICK in Traditional Chinese” was maintained on cosmetic goods

IKEDA MOHANDO CO., LTD. (“IKEDA”) registered the MOPIDICK in Traditional Chinese mark (“Disputed Trademark”) on August 28, 2014, in Class 3 for “cosmetics, soaps, fragranced soaps, fragrances, cosmetic nails, cosmetic eyelashes, perfume, toothpaste.”

A individual filed a non-use cancellation and later a cancellation appeal against the Disputed Trademark. The CNIPA concluded that the evidence submitted by IKEDA showed that the Disputed Trademark was used on anti-mosquito and anti-itch liquid products, which were closely related to cosmetic products in function, sales location, consumer, etc., and the trademark shall be maintained on cosmetic goods. However, the evidence did not show that the Disputed Trademark was used for soaps, fragranced soaps, fragrances, cosmetic nails, cosmetic eyelashes, perfume and toothpaste, and the mark’s registration on these goods shall be cancelled accordingly.

IKEDA appealed to the Beijing Intellectual Property Court and the court found that the online sales and publicity evidence submitted by IKEDA could prove that it had actually used the Disputed Trademark on the “anti-mosquito and anti-itch liquid” products within the specified period. In view of the strong correlation between the “anti-mosquito and anti-itch liquid” products and the “cosmetics” goods approved for the Disputed Trademark in terms of function, use, sales location, and consumers, the Disputed Trademark shall be maintained on the “cosmetics” goods. According to the Classification of Similar Goods and Services, “fragrance, cosmetic nails, cosmetic eyelashes, soap, fragranced soap” and “cosmetics” goods belong to the same subclass, and the Disputed Trademark shall be maintained on these goods as well. In addition, the Disputed Trademark’s approved goods of “toothpaste, perfume” and “cosmetics, soaps, fragrance” were all daily washing and chemical goods, and they were highly similar in terms of function and use, production department, sales channel and consumers. According to Article 2 of the Regulations on Hygiene Supervision of Cosmetics and relevant regulations, cosmetics refer to daily chemical industrial products that are spread on skin, hair, nails, lips and other parts of the human body by wiping, spraying or other similar methods to achieve the purposes of cleaning, eliminating bad smell, skin care, beauty and decoration. Therefore, the Disputed Trademark’s approved use of “toothpaste and fragrance” products should also be covered by cosmetics in terms of function and use. Therefore, “toothpaste and fragrance” and “cosmetics” should be deemed as similar goods, and the Disputed Trademark’s approved use for “toothpaste and fragrance” shall be maintained.

The CNIPA appealed the first instance decision to the Beijing High Court. The Beijing High Court recently affirmed the first instance court decision that the disputed trademark “MOPIDICK in Traditional Chinese” shall be maintained for its registration on cosmetics, toothpastes, fragrances, and other designated goods.

Guangzhou Xinbailun and Jiangxi Xinbailun were unsatisfied with the judgment, and NB was unsatisfied with the court’s findings of “New Balance in Chinese” and the compensation amount ordered. All parties appealed the first instance judgment to the second instance court, the Beijing IP Court. The Beijing IP Court affirmed the first instance court’s judgment.

i. The Beijing High Court: Trademark co-existence agreement does not automatically equal to grant of trademark protection

Volkswagen applied the “TAYRON” mark which was blocked by the prior registered trademark “TYRON.” Volkswagen submitted a trademark co-existence agreement issued by the owner of the prior trademark, however, the Beijing High Court found that the disputed mark “TAYRON” was almost identical to the prior trademark “TYRON,” thus, even if the co-existence agreement is legal, authentic, and effective, it would not be enough to eliminate the possibility to confuse or to mislead the relevant public regarding source of the goods. Therefore, the trademark co-existence agreement could not be the basis for the registration of the disputed mark “TAYRON” and the court rejected Volkswagen’s appeal.

2. Notable trademark laws, regulations, and news updates

a. Summary analysis of administrative litigation of trademark review and adjudication cases in 2020

In 2020, the Trademark Office’s review and adjudication departments have ruled a total of 358,300 cases and received a total of 14,977 first instance response notices. The number of first instance responses received accounted for 4.18% of the total number of adjudications, which basically leveled with the previous year. A total of 5,933 second instance response notices were received, a slight increase from last year.

The overall review cases loss rate of the Trademark Office’s review and adjudication departments in 2020 was 24.62%, and the actual loss rate after excluding cases with change in circumstances is only 9.8%, which was a significant drop from the actual loss rate of 13.9% in the previous year.

b. The CNIPA publicly solicits opinions on the “General Trademark Violation Judgment Standards“

To strengthen trademark management, improve trademark enforcement guidance, and unify enforcement standards, the CNIPA has drafted the “General Trademark Violation Judgment Standards (Draft for Comment) (“Standards”),” which the CNIPA publicly solicited opinions until October 1, 2021.

The Standards stipulates ten general trademark violations, including: violation of Article 6 of the Chinese Trademark Law, that is, must use a registered trademark but failed to use it; violation of Article 10(i) of the Chinese Trademark Law, that is, use logos that are not allowed to be used as a trademark; violation of Article 14(5), that is, use the words “well-known mark” during business activities; violation of Article 49(i) of the Chinese Trademark Law, that is, in the process of using the registered trademark, the registrant changes the registered trademark, registrant’s name, address or other registration matters by himself; violation of Article 52 of the Chinese Trademark Law, that is, uses unregistered trademarks as registered trademarks; violation of Article 3 of the Several Rules on the Regulation of Trademark Registration, that is, applying for trademark registration in bad faith and etc.

c. From September 1, 2021, intentional IP infringements, filing irregular patent applications, bad faith trademark applications, and serious violation of patent and trademark agency will be included in the serious violations of law and dishonest list

The Administrative Measures for Lists of Parties with Seriously Unlawful and Dishonest Acts for Market Regulation Authorities (“Administrative Measures”), passed on July 22, 2021, came into force on September 1, 2021.

Article 2 of the Administrative Measures states where a party violates laws and administrative regulations, who’s conduct has a bad nature, under serious circumstances, imposes great social harm and is subject to heavy administrative punishment by the market regulation authorities, the relevant market regulation authorities shall list violators in the Lists of Parties with Seriously Unlawful and Dishonest Acts in accordance with the provisions of the Administrative Measures, publish it through the national enterprise credit information publicity system, and implement corresponding management measures.

Article 9 of the Administrative Measures states those who commit the following illegal acts that undermine the order of fair competition, disrupt the market order and fall under the circumstances specified in Article 2 of the Administrative Measures shall be included in the Lists of Parties with Seriously Unlawful and Dishonest Acts:

• Unfair competition actions that seriously undermine the order of fair competition, such as infringing trade secrets, business slander, organizing false transactions, etc.;
• Intentional infringement of intellectual property rights; submitting irregular patent applications and bad faith trademark applications that damages the social and public interests; and engage in serious violation of patent and trademark agency.

d. China’s trademark registration cycle will be further reduced

On August 26, 2021, the CNIPA specially held a mobilization and deployment meeting to shorten the trademark registration cycle. The CNIPA pointed out that the State Council had decided that the general trademark registration cycle will be reduced to 7 months. It is one of the important measures to deepen the reform of the “delegation of administration and decentralization” (simplification of administration and decentralization, combination of delegation and regulation, and optimization of services) in the field of intellectual property rights. The CNIPA’s most important task of the year.

The CNIPA issued a notice on September 14, 2021, in accordance with the “Working Plan for Reduction of the Trademark Registration Cycle in General Situations,” stating that from September 29, 2021, the deadline for payment shall be adjusted from within 15 days from the date of receipt of the payment notice to within 7 days. If the payment is not made within the time limit, the CNIPA will not accept the application.

It can be seen from the above that the CNIPA has shortened the trademark registration cycle in an all-round and multi-stage manner, not only speeding up the formal and substantive examination, but also furthering the process in terms of processing. According to our recent experience, if it all goes well, it will take about 3 to 4 months from submission of an application to preliminary approval; and if excluding the office action for the non-standard goods and services and the payment duration, it will take as short as about one month from the issuance of official filing receipt to preliminary approval.

3. Trademark Practices Series – Bad Faith Application in China and Protection of Chinese Equivalents of Foreign Trademarks

Previously, we shared our insights on the application of bad faith clause with exemplary cases. This time, we are going to share cases to show how we identify the bad faith and how we present the evidence to convince the CNIPA and the courts to achieve favorable outcomes. In the last part of this series, Part IV, we will share cases and our suggestions on two issues, one is the impact on bad faith assessment in the event of later trademark assignment, the other is the necessity to assess bad faith if the right holder’s interests have already been protected by applying other clauses of the Trademark Law.

1. Tackling Bad Faith Trademark Applications or Registrations In China – Part III
2. Tackling Bad Faith Trademark Applications or Registrations In China – Part IV

When an oversea brand enters Chinese market, selecting a Chinese equivalent of the oversea brand is crucial because native Chinese pronounce and remember the Chinese language much easier than any foreign language. This is precisely why nearly all famous international brands have and use its Chinese equivalent names in China. Our article aims to shed light on how foreign brand owners can protect their Chinese equivalent trademarks.

1. Protection of Chinese Equivalents of Foreign Trademarks

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Protection of Chinese Equivalents of Foreign Trademarks

by Yan Zhang & Austin Chang

When an oversea brand enters China market, selecting a Chinese equivalent of the oversea brand is crucial because native Chinese pronounce and remember the Chinese language much easier than any foreign language. This is precisely why nearly all famous international brands have and use its Chinese equivalent names in China. For example, the well-known tech company APPLE has its Chinese name of “PING GUO in Chinese (苹果)” and MICROSOFT uses “WEI RUAN in Chinese (微软).” Both APPLE and MICROSOFT used literal translation as their Chinese equivalent. Literal translation is one of the three ways in selecting a Chinese equivalent. The famous hotel brand HILTON uses “XI ER DUN in Chinese (希尔顿)” and the fashion brand ARMANI uses “A MA NI in Chinese (阿玛尼).” Hilton and Aermani used transliteration, which is another popular way of creating a Chinese equivalent that could be highly distinctive and have a similar pronunciation to its foreign counterpart. Literal translation or transliteration, it is critical that the Chinese equivalent has no negative meanings.

A combination of literal translation and transliteration is also used in creating Chinese equivalents. For example, STARBUCKS uses “XING BA KE in Chinese (星巴克).” The first character “XING in Chinese (星)” is the literal translation of “STAR,” and the last two characters “BA KE in Chinese (巴克)” are the transliteration of “BUCK.” Another great example is “LOCK & LOCK,” a Korean household brand. Its Chinese name sounds like “Le kou Le kou” and means “happily locked or buttoned.”

As Chinese equivalents could involve various Chinese translations or non-exclusive transliterations, in China trademark prosecution, a foreign language trademark will not automatically be deemed similar to its Chinese equivalent. So registering the foreign language trademark alone may not be sufficient to establish priority over all Chinese translations, nor prevent others from registering various transliterations.

More importantly, China adopts the first-to-file trademark system. If a Chinese equivalent of a foreign language trademark is not promptly selected, it is likely that distributors, consumers, or media may “self-select” a Chinese name for that foreign language trademark and even have it registered to block that oversea brand owners from using its Chinese marks in China. So it is vital for an oversea brand owner to create and timely protect its Chinese equivalent.

1. Factors considered in prosecution and litigation

Determining whether or not a foreign language trademark is similar to a prior Chinese language trademark, the general understanding of Chinese relevant public shall be considered, and the following factors should be taken into account according to the Beijing High Court Guidelines for the Trial of Trademark Right Granting and Verification Cases: (i) the ability of Chinese consumers to recognize the foreign language trademark; (ii) the relevance or correspondence in meaning and pronunciation between the foreign language trademark and the Chinese language trademark; (iii) the distinctiveness, popularity and ways of use of the cited trademark; and (iv) the actual use of the trademark in dispute. These factors should be comprehensively considered in different proceedings and evaluated on a case-by-case basis.

For the factor “the ability of Chinese consumers to recognize the foreign language trademark,” two elements should be considered, the type of foreign language and the frequency of use of foreign words.

If Chinese consumers cannot recognize a foreign word, it would be unnecessary to discuss similarity between the foreign language trademark and Chinese language trademark. Like in the “Little Black Dress” case, the Court held that the refused mark “Little Black Dress in Chinese” and the cited mark “LA PETITE ROBE NOIRE” do not constitute similar marks, because most Chinese consumers cannot read French, nor do they know the Chinese meaning of the cited French trademark. They would only recognize the cited French trademark as a combination of Latin alphabets and not associate it with a Chinese language trademark.

For the factor “relevance or correspondence between the foreign language trademark and the Chinese language trademark,” as one foreign word can be translated or transliterated into different Chinese characters, and vice versa, when identifying similarity between a foreign language trademark and a Chinese language trademark, correspondence can be considered from either of the two perspectives – translation from Chinese into English and vice versa.

Taking the “FOREVERMARK” case for example, “FOREVERMARK” can be translated into “永恒印记, ” while “永恒印记” can also be translated into “FOREVER MARK.” As “FOREVER” and “MARK” are both frequently used English words, Chinese consumers can readily understand the Chinese meaning of the trademark and will likely associate the trademark with its corresponding Chinese translation.

Based on current practices in China, the substantial examination of a foreign language trademark at the Trademark Office is straightforward. The examiners mainly focus on the literal meaning of the trademark, and refer to the online dictionaries, such as Kingsoft dictionary for direct translation. Hence, the transliterations of a trademark or phonetically similar trademarks will not be cited by the examiners to block the new application of foreign language trademark.

While in refusal appeal procedure, the examiners apply a broader scope in examining the similarity between a foreign language trademark and a Chinese language trademark, not merely relying on the dictionary meanings. Their broader scope of examination focuses on the two aspects: the general understandings of Chinese consumers and the correspondence in meanings between the foreign language trademark and the Chinese language trademark. The use and reputation of refused marks would also be deemed as a supporting factor but cannot carry much weight.

In reviewing opposition and invalidation cases, however, the Trademark Office and courts apply a more comprehensive analysis using “likelihood of confusion” as the judging standard. In addition to comparison of trademarks per se, other influential factors may be considered when assessing “likelihood of confusion,” such as the cited trademark’s distinctiveness, the use and reputation of the cited trademarks, the relatedness of goods and services, and the applicant’s bad faith.

Chinese courts also apply the “likelihood of confusion” analysis in trademark infringement cases involving Chinese equivalents, requiring only a “stable,” as opposed to “sole” corresponding relationship be established between a foreign language trademark and its Chinese equivalent. However, to achieve the “stable” status, brand owner must provide substantial evidence to prove that its foreign language trademark and its Chinese equivalent have been widely used over a long period of time, and the corresponding relationship has been established and known to the relevant public.

2. Typical cases regarding Chinese equivalents of foreign trademarks

The most common mistake in business practice is that the brand owner does not have an “official” Chinese equivalent for its foreign language trademark, nor does it attempt to use and promote the trademark in Chinese. When a brand owner does not have a Chinese equivalent for its foreign language trademark, its Chinese distributors, public, or media will often self-create and use a Chinese version to refer to the brand owner and its products. This is considered as “passive use” in contrast to the “active use” by the brand owner. In practice, when an issue of determining whether a use is an active one or a passive one is presented to Chinese courts (usually in cancellation actions), the courts will examine whether the asserted “passive use” in the case at hand is used against the brand owner’s will, and whether a corresponding relationship between the foreign language trademark and its Chinese equivalent has been established. Please see below an example case.

In the FREDDIE MAC case, the China Supreme Court held that “FANG DI MEI in Chinese,” as one of the Chinese translations of “FREDDIE MAC,” has been widely used by media reports to refer to Freddie Mac, and “FANG DI MEI in Chinese” has established a corresponding relationship with “FREDDIE MAC” in the field of financial services, although there exists several other translations, like FANG DAI MEI (房贷美) and FU LEI DE MA KE (弗雷迪马克). The FREDDIE MAC case highlights that the existence of several Chinese translations does not affect the establishment of corresponding relationship between the major Chinese translation and the foreign language trademark.

An equally important issue is that the corresponding relationship shall be identified in connection with the specific goods or services used. Taking the FACEBOOK case for example, the Beijing High Court held that, based on the third party evidence including Chinese media reports, and general understanding of Chinese relevant public, the “LIAN PU in Chinese” mark was the corresponding translation of the FACEBOOK mark when used on networking services. Although “LIAN PU in Chinese” has its fixed meaning in Chinese, which means facial makeup in operas, when used in connection with networking services, it refers to Facebook, rather than other entities.

The FREDDIE MAC case and the FACEBOOK case are typical passive use cases where the courts protected the Chinese equivalent of the foreign language trademark. For the passive use, the worse scenario happens when the Chinese distributor created the Chinese name for the oversee brand and registered the Chinese trademark under its own name. Upon the termination of business cooperation, the Chinese distributor may start supplying identical products using the Chinese trademark, which may inevitably mislead consumers about the source of products.

As in the EVOLON case, a Nanjing Company, which was a distributor of Freudenberg, registered the Chinese mark “YI WO LONG in Chinese (依沃珑)” and used it in the sales of Freudenberg’s nonwovens products with the English mark “EVOLON.” The Nanjing Company insisted that the Chinese mark was created by themselves, and it was their efforts that contributed to the reputation of the Chinese mark. The China Supreme Court affirmed the corresponding relationship between the Chinese mark “YI WO LONG in Chinese” and the cited English mark “EVOLON,” and further held that the Nanjing Company used the Chinese mark alone or together with the English mark to promote Freudenberg’s products, which inevitably associated the Chinese mark with Freudenberg and its products.

Despite more and more positive outcomes from Chinese courts, there are cases where Chinese equivalents of foreign language trademarks were not protected because brand owners expressly denied the corresponding Chinese equivalents. The VIAGRA case and SONY ERICSSON case are typical examples. In the VIAGRA case, Pfizer adopted a Chinese name “WAN AI KE in Chinese” for its blue pills, Chinese public and media, however, had already created a Chinese name “WEI GE in Chinese” for VIAGRA. Pfizer opposed a third party’s filing for the “WEI GE in Chinese” mark but failed. The court found that, Pfizer had never promoted their products under the name “WEI GE in Chinese,” and on the contrary, claimed that the Chinese equivalent of VIAGRA was “WAN AI KE in Chinese.”  In the SONY ERICSSON case, Sony Ericsson used “SUO NI AI LI XIN in Chinese” as the official translation of its mobile phone brand, but Chinese public and media called it “SUO AI in Chinese” for short. The court held that, Sony Ericsson had no evidence proving their use of “SUO AI in Chinese” and even denied that “SUO AI in Chinese” was the abbreviation for “SUO NI AI LI XIN in Chinese.”

One final important point, the evidence proving the corresponding relationship shall be prior to the application date of the disputed mark or prior to the first use date of the accused mark.

In the New Balance case, New Balance registered its English trademark “New Balance,” but neglected to register the Chinese version. A Chinese individual, Mr. Zhou, registered the trademarks “BAI LUN in Chinese” and “XIN BAI LUN in Chinese” for footwear and later brought an infringement action against New Balance’s use of “XIN BAI LUN in Chinese” mark. The first instance court affirmed trademark infringement and ordered New Balance to pay damages for around USD 15 million. This astonishing high damage was significantly reduced to around USD 770,000 by the second instance court, that said, the finding of trademark infringement is an important lesson to oversea brand owners doing business in China to have a Chinese equivalent trademark.

On the other hand, New Balance attempted to invalidate Mr. Zhou’s registered trademark “XIN BAI LUN in Chinese,” claiming “XIN BAI LUN in Chinese” is a Chinese equivalent of “NEW BALANCE,” but the Beijing High Court recently made the final decision denying New Balance’s appeal, because New Balance used “XIN BAI LUN in Chinese” as the Chinese equivalent of NEW BALANCE later than the application date of Mr. Zhou’s “BAI LUN in Chinese” trademark. And no sufficient evidence was provided to prove the corresponding relationship between “XIN BAI LUN in Chinese” and “NEW BALANCE” prior to the application date of the disputed mark.

Similarly, a famous Australian wine brand Penfolds got involved in a trademark dispute with a Chinese squatter Mr. Li, who registered the mark “BEN FU in Chinese,” which is the Chinese equivalent of PENFOLDS. This registration blocked the Australian brand owner using the “BEN FU in Chinese” mark in China, despite doing business in China for over twenty-five years. In the PENFOLDS case, the Beijing High Court held that the submitted evidence was sufficient to prove the corresponding relationship established between the disputed mark “BEN FU in Chinese” and the cited English mark “Penfolds” prior to the application date of the disputed mark.

Fortunately for Penfolds, before successfully securing the registration of its own Chinese mark “BEN FU in Chinese,” it landed a victory in an infringement action against a Chinese brewing company and its distributor. The local court affirmed the well-known status of “BEN FU in Chinese” as an unregistered mark, based on its corresponding relationship with the English mark “Penfolds,” and held the defendants’ use of the accused “BEN FU in Chinese” mark constitutes trademark infringement. In this case, “BEN FU in Chinese” was protected as unregistered well-known mark based on the evidence prior to the first use date of the accused mark.

The key issue in the New Balance case and the Penfolds case is the cut-off time for collecting evidence. On top of that, sufficiency of evidence is crucial in swinging the outcome of a case.

3. Takeaways

1) It is highly recommended that oversea brand owners create their own Chinese equivalents before entering the China market. If not, Chinese consumers or media will create Chinese versions in different ways and squatters may even register them.

2) Oversea brand owners should not only register the foreign language trademark, but also file for the Chinese equivalent as soon as possible. Those Chinese equivalents created by the media and public shall be considered and registered as trademark as well, at least for defense purposes.

3) In addition to clearance search, regularly monitoring similar Chinese translations in key classes will help in discovering questionable marks, which allows brand owners to address squatting or counterfeiting problems in a timely manner.

4) Better evidence management is crucial because sufficiency of evidence, especially evidence related to the use and fame of the foreign language trademark as well as the corresponding relationship between the foreign language trademark and its Chinese equivalent, is always a core factor affecting chances of success.

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Quarterly China Trademark News Updates

April – June 2021

1. Notable trademark and anti-unfair competition cases

a. LEGO won RMB 30 million in a trademark infringement dispute

The Guangdong High Court rendered the final decision regarding the trademark infringement and unfair competition disputes between the “LEGO in Chinese (乐高)” mark owned by LEGO Juris A/S (“LEGO”) and the “Le Pin in Chinese (乐拼)” mark owned by Meizhi Zhijiao Technology Co., Ltd. (“Meizhi”). The court held that Meizhi and other defendants infringed upon LEGO’s trademark right and their acts amounted to unfair competition, and awarded LEGO economic loss and reasonable legal cost of RMB 30 million (USD 4.58 million).

The court acted as the second instance court found that Meizhi’s “Le Pin in Chinese (乐拼)” mark was highly similar to the “LEGO in Chinese (乐高)” mark in terms of color combination, presentation, and overall appearances, which was likely to cause confusion to the relevant public and weakened the distinctiveness of “LEGO in Chinese,” and damaged LEGO’s market reputation.

Meizhi had been copying LEGO’s products for more than four years, infringed upon eight of LEGO’s registered trademarks and one influential trade name. Between September 11, 2017, and April 23, 2019, Meizhi’s infringing products collected unjustifiable income of RMB 330 million (USD 50 million), and combining with the sales records provided by Taobao, it can be reasonably presumed that “Le Pin in Chinese (乐拼)” products collected over RMB 500 million (USD 76 million) unjustifiable income. Using the industrial profit as a scale, the overall profit of the infringing products was over RMB 160 million (USD 24.4 million).

The court ordered a high damage not only because Meizhi had obvious bad faith in copying and imitating LEGO’s trademarks, but also because Meizhi’s long-term, extensive, and highly-profitable infringements of LEGO’s trademarks.

b. Bulgari won against fake Serpenti jewelry trademark disputes

The Beijing Intellectual Property Court (“the Beijing IP Court”) recently held that the “snake head design” mark owned by an individual Liu with reg. no. 15911982 (“Disputed Mark”) infringed upon Bulgari S.P.A.’s (“Bulgari”) copyright and should be cancelled. The court found that Bulgari’s Serpenti design was a pictorial and unique design that can be protected under the Chinese Copyright Law as an artwork. Bulgari submitted sufficient evidence proving that it enjoyed copyright for the snake head design before the Disputed Mark’s application date. Moreover, Bulgari’s evidence showed that Liu once owned a business related to “purse,” which overlapped with Bulgari’s scope of business and suggested that Liu may or should’ve known about Bulgari’s Serpenti design. Considering both the Disputed Mark and Bulgari’s Serpenti design have drawn ideas from snake head, the overall appearance, composition, visual effect, and expression were all similar, the Disputed Mark constitutes as a similar mark to Bulgari’s Serpenti copyrighted design.

Infringing Mark	Bulgari’s Serpenti Jewelry

c. Alibaba was fined for RMB 18.22 billion for abuse of market dominance

On April 10, 2021, the State Administration of Market Regulation (“SAMR”) rendered a decision finding Alibaba Group Holding Limited (“Alibaba”) abused its market dominance, imposed a fine of RMB 18.22 billion (USD 2.79 billion), and requested Alibaba to conduct full rectification and operate in compliance with laws and regulations.

In its decision, the SAMR found that Alibaba’s operations have “occupied a relatively high market share for a long period of time, which enjoys a very high market recognition and consumer awareness, and there is a high cost for operators to move away from Alibaba’s platforms.” Alibaba had a dominant position in the online retail service market in China.

Since 2015, in order to restrict other competitions, maintain and strengthen its market position, Alibaba abused its market dominance by not allowing business operators on its platform to operate or participate in sales events on other competing platforms. Further, Alibaba imposed various awards and punishments in order to carry out its “choice between the two” (business operators can only choose either Alibaba or other competing platforms but not both) implementation.

Alibaba’s actions not only maintained and strengthened its market position, but also deviated from the development concept of economic openness, tolerance, and sharing. Such actions excluded and restricted relevant market competition, harmed the interests of business operators and consumers on the platform, and weakened innovation and development vitality. Alibaba’s actions also hindered the healthy development of platform economy in a standardized, orderly, and innovative manner.

Click here for SAMR’s official press release and its administrative decision and guidance in Chinese.

d. “PENFOLDS in Chinese” recognized as an unregistered well-known trademark

Southcorp Brands Pty Limited (“Southcorp”) sued Huaian City Huaxia Manor Brewing Co., Ltd. and Hangzhou Zhengsheng Trading Co., Ltd. (together as “the Defendant”) for trademark infringement. The court held that Southcorp’s “PENFOLDS in Chinese” mark constituted as an unregistered well-known mark, and the defendants’ use of “PENFOLDS in Chinese” mark infringed upon Southcorp’s right to the unregistered well-known mark. Meanwhile, the “Penfunils” mark used by the Defendants constituted as a similar mark to Southcorp’s “PENFOLDS” mark in terms of letter composition, order, and pronunciation, and such use infringed upon Southcorp’s registered trademark right for “PENFOLDS.” The court ordered the defendant to compensate Southcorp’s economic lost and reasonable enforcement costs of RMB 1 million (USD 154,100).

e. Michelin won in a trademark infringement retrial

Compagnie Generale Des Etablissements Michelin (“Michelin”) sued Ningbo Jaiqi Handicraft Co., Ltd. (“Jaiqi’) for trademark infringement. The Guangdong High Court found that the only differences between the two Micheline’s Cited Marks was its gestures, the rest of Michelin Man’s characteristics were identical, which suggested that the Michelin Man’s characteristics were the heart of its Cited Marks’ distinctiveness. Through long-term promotion and use, the Michelin Man’s characteristics grew more prominent and triggered the relevant public to associate Michelin upon seeing the Michelin Man.

Infringing Marks	Michelin’s Marks

When comparing the disputed cartoon character with the Cited Marks, although the disputed cartoon character only had a smiling face, the component and details of the smiling face were nearly identical with the Cited Marks’ characteristics. Considering Michelin Cited Marks’ distinctiveness and fame, such smiling face was likely to cause the relevant public to associate the Michelin Man image presented in the Cited Marks and cause confusion. Thus, the disputed cartoon character  shall be deemed as similar to the Cited Marks. Additionally, the disputed inflatable doll also closely reassembled the Michelin Man’s characteristics and shall be deemed as similar with the Cited Marks. The court concluded that Jaiqi infringed upon Michelin’s trademark rights and ordered compensation for economic loss and reasonable legal costs of RMB 100,000 (USD 15,416).

f. First criminal copyright infringement case involving an artwork came into effect with RMB 410,000 in penalty in Shenzhen

Recently, the Shenzhen Longgang District Court (the “First Instance Court”) concluded that the defendant WANG infringed upon the plaintiff’s copyright. The Shenzhen Intermediate Court rendered the final decision as the second instance court which rejected WANG’s petition to appeal and affirmed the First Instance Court’s decision. In the First Instance Court decision, WANG was sentenced to 3 years and 8 months in prison with penalty of RMB 410,000 (USD 63,675). The infringing toys used as evidence during the trial were confiscated and destroyed. This is the first criminal copyright infringement case involving an artwork in Shenzhen.

Between October 2016 and November 2018, without authorization from CCA and B, LLC. (“CCA”), Wang purchased the infringing Christmas genie dolls and reindeer dolls that he knew were infringing CCA’s copyright. WANG made unjustified profits from selling the dolls on its Alibaba and Amazon online stores.

On October 31, 2018, Longgang Branch of Shenzhen Municipal Administration for Market Regulation seized 8,340 “Christmas genie dolls” and 215 “reindeer dolls” for sale in WANG’s company. Identified by the Copyright Appraisal Committee of Copyright Protection Center of China, these dolls constated as copies of the “Christmas genie dolls” and “reindeer dolls” owned by CCA. They were infringing copies of “Christmas Genie dolls” and “reindeer dolls.” On July 15, 2019, the case was transferred to Longgang Public Security Bureau.

It was verified that from May 31, 2017, to October 30, 2018, WANG sold the infringing products through three online stores and earned a total amount of RMB 557,000 (USD 86,500). The value of the seized infringing products for sale was about RMB 213,000 (USD 33,000). The total unjustified profit was RMB 771, 000 (USD 119,700).

After hearing, the First Instance Court concluded that WANG’s operation purpose was to obtain unjustified profits by copying and selling copyrighted artworks without authorization, which amounted to RMB 771, 000 (USD 119,700). Such circumstance was particularly serious and constituted as a crime of copyright infringement.

 g. Weibo sued Toutiao for unfair competition and won a RMB 20 million verdict in compensation

Beijing Weimeng Chuangke Network Technology Co., Ltd. (“Weibo” a.k.the Chinese Twitter) sued Beijing ByteDance Technology Co., Ltd. (“Toutiao”) based on the grounds that Toutiao’s relevant content constituted unfair competition before the Haidian District Court of Beijing. The court found that displayed content and disseminated information of the Weibo content involved in this case was not purely user-generated, the information involved were added with Weibo’s resources and services, which constituted as the “legal interests” of Weibo according to Article 2 of the Chinese Anti-Unfair Competition Law. Toutiao targeted Weibo’s contents and transferred the said contents without authorization, particularly with those Weibo accounts that had large number of fans, more market impact, celebrities’ accounts, and major VIP accounts. Toutiao’s actions substantially substituted Weibo and damaged its business interests. The court ruled in favor of Weibo for economic loss of RMB 20 million (USD 3.14 million) and reasonable legal costs of RMB 1.15 million (USD 180,000).

h. Land Rover prevailed against Landwind X7

On May 27, 2021, the Beijing IP Court concluded the final decision of an unfair competition lawsuit between Jaguar Land Rover Limited (“JLR”) and Jiangling Holdings Co., Ltd. (“JLH”) and Beijing Dachang Landwind Motor Sales Co., Ltd. (“Landwind”). The court ordered JLH and Landwind to immediately stop all unfair competition acts, publish a statement to eliminate negative impacts, and compensate for losses and reasonable expenses of RMB 1.5 million (USD232,200).

In this case, JLR claimed five design features of its “Range Rover Evoque” had the characteristics that were different from the common exterior design of ordinary cars, and these designs were distinctive as product decorations. JLR’s evidence were also sufficient to prove that its “Range Rover Evoque” car enjoyed certain fame and influence in China’s car industry. Accordingly, Range Rover Evoque’s exterior decoration when used as product shape decoration satisfied the “decoration with certain influence” as stated in the Chinese Anti-Unfair Competition Law. The shape and decoration used by JLH on the “Landwind X7” car was enough to confuse and mislead the relevant public with JLR’s “Range Rover Evoque,” which constituted as unfair competition.

The first instance court calculated the damages based on the sales volume and unit profit of the infringing product, while referring to the 2015 domestic vehicle industry sales profit of domestically funded vehicle companies published by “National Passenger Car Information Exchange Association,” the sales data and the lowest unit price published on the official website of JLH. Also considering the duration of the unfair competition in the case, the role of the car product shape and decoration played during sales of “Landwind X7,” the range of sales, and the popularity of the “Range Rover Evoque” car shape, the second instance court affirmed the first instance court’s calculation methods.

i. Unauthorized use of New Balance’s “N” logo amounted to unfair competition

The Beijing IP Court affirmed the first instance court judgment regarding an unfair competition lawsuit between New Balance Trade (China) Co., Ltd. (“NB”) and Jiangxi Xinbailun Sports Goods Co., Ltd. (“Jiangxi Xinbailun”), Guangzhou Xinbailun Leading Footwear Co., Ltd., Guangzhou Xinbailun Enterprise Management Co., Ltd. (together as “Guangzhou Xinbailun”) and its executive director and general manager Lelun Zhou.

In the first instance judgment, the Beijing Dongcheng District People’s Court found that NB lacked evidence to support its claims that the “New Balance in Chinese” was an influential trade name or was a special name for the “New Balance” sneakers products. However, the uppercase bold “N” letters in the upper side of the shoes constituted as unique decoration. Thus, the use of the “N” logo on its sneakers products by Jiangxi Xinbailun and Guangzhou Xinbailun amounted to unfair competition for using other’s unique decoration without authorization.

Regarding the amount of compensation, the first instance court considered the fame of NB’s sneakers, uniqueness of decoration, subjective bad faith of Guangzhou Xinbailun and Jiangxi Xinbailun, the nature, method, duration, influence area involving the unfair competition behavior, related products sales prices and other factors, and ordered Guangzhou Xinbailun and Jiangxi Xinbailun compensate NB for economic loss of RMB 1 million (USD 154,700) and reasonable costs of RMB 100,000 (USD 15,470).

Guangzhou Xinbailun and Jiangxi Xinbailun were unsatisfied with the judgment, and NB was unsatisfied with the court’s findings of “New Balance in Chinese” and the compensation amount ordered. All parties appealed the first instance judgment to the second instance court, the Beijing IP Court. The Beijing IP Court affirmed the first instance court’s judgment.

2. Notable trademark laws, regulations, and news updates

a. The CNIPA: Enlist bad faith applicants into blacklist

From the beginning of 2021, the China National Intellectual Property Administration (“CNIPA”) has rejected more than 10,000 bad faith trademark applications citing the 2019 Chinese Trademark Law. The CNIPA has also created a blacklist system to include applicants who filed more bad faith applications and registrations. This is to closely supervise new trademark applications. So far, there are about 1,000 bad faith trademark applicants added into the blacklist.

The average trademark examination time had been shortened to 4 months.

b. The CNIPA issued the Notice of Deepening “Deregulation, Innovation, and Service” in the Intellectual Property Industry on Optimizing and Improving Innovation Environment and Business Operation Environment

On May 11, 2021, the CNIPA issued the Notice of Deepening “Deregulation, Innovation, and Service” in the Intellectual Property Industry on Optimizing and Improving Innovation Environment and Business Operation Environment. The notice includes the following news.

1. Continue to reduce trademark examination period. Aim to regulate trademark examination time within four months. The entire trademark application proceeding will be reduced from eight months to seven months. At the end of 2021, examination time for trademark assignments, oppositions, rejection appeals, and invalidations will be reduced to one and half months, twelve months, five and half months, and nine months, respectively. Examination time for trademark applications and renewals filed electronically will be reduced by one fifth.
2. Strengthen trademark examination supervision. Rigorously crack down on bad faith trademark registration and refuse to accept or fast-reject trademark applications with significant adverse effects according to the law. Promptly disclose typical bad faith trademark registration cases in time. Include bad faith trademark registration without intent to use into credit supervision according to the law.
3. Fully implement electronic trademark registration certificate, accelerate the use of the electronic trademark registration certificate on e-commerce platform, enforcement, proffer evidence and other fields.
4. Establish and improve the green channel acceleration model of trademark examination. Priority examination for qualified trademark rejection appeals and oppositions in order to assist applicant in obtaining trademark certificate and safeguard legal rights and interests.
5. Strengthen the crack down on illegal agency. Rigorously crack down on the forgery of legal documents and seals and disrupt the order of the agency market by fraud and false publicity. Strengthen the credit supervision and punishment of illegal agency in accordance with the laws and regulations.

Fully exploit the value of intellectual property information. On the basis of data security, fully release basic data of intellectual property right, and fully employ the strategic resource value of intellectual property information.

c. The Supreme People’s Court issued the Official Reply of Defendant’s Request for Compensation for Reasonable Expenses due to Abuse of Rights by the Plaintiff in IP Infringement Litigation

On June 3, 2021, the Supreme People’s Court (“SPC”) has issued the Official Reply of Defendant’s Request for Compensation for Reasonable Expenses due to Abuse of Rights by the Plaintiff in IP Infringement Litigation (the “Reply”) to be implemented immediately.

The Reply confirmed that, in an intellectual property infringement litigation, if the defendant can provide evidence to prove that the lawsuit brought by the plaintiff constitutes the abuse of rights according to the law, the people’s court should uphold the defendant’s request that the plaintiff should compensate for the reasonable attorney fee, transportation fee, accommodation fee, and other expenses. The defendant may also file another separate lawsuit to require the plaintiff to compensate the said reasonable expenses and fees.

d. The CNIPA: Trademark Examination and Adjudication Standards (Draft for Comments)

The CNIPA launched the revision of the current Trademark Examination and Adjudication Standards in July 2020 and published the draft for comments from the public. The revised content mainly includes two aspects: the first is to add new standards on trademark formality examination and trademark affairs examination; the second is to revise and improve the substantive standards of trademark examination and adjudication. The first aspect includes the standard for applying Article 4 of the Chinese Trademark Law, clarifying the applicable factors, considerations, and applicable circumstances for malicious trademark applications filed without the intent to use. The second aspect includes revision and improvement of applicable standards of other provisions in the Chinese Trademark Law, including the applicability of prohibited filings and prohibited use, standards and considerations for determining identical or similar trademarks, standards for determining distinctiveness for 3D marks, color combination marks, sound marks, etc.

3. Trademark Practices Series – Bad Faith Application in China

Bad faith trademark applications, a constant headache for foreign brand owners due to China’s first-to-file system. In this new series, we will provide our experiences to decipher the laws, regulations, and actual practices on how to tackle the bad faith trademark applications. We will begin with the relevant stipulations in the Chinese Trademark Law of China (2019 Version), the required factors when applying the laws, the current trend in tackling bad faith trademark applications or registrations, and finally demonstrate how to tackle the bad faith trademark applications or registrations with our successful cases.

1. Tackling Bad Faith Trademark Applications or Registrations In China – Part I
2. Tackling Bad Faith Trademark Applications or Registrations In China – Part II

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Quarterly China Trademark News Updates

January – March 2021

Starting January 2021, Beijing East IP will be collecting and presenting notable China trademark and anti-unfair competition news and updates every quarter. Our quarterly newsletter will be a selection of notable news from our weekly updates, including cases, laws, regulations, and our on-going trademark articles regarding suggested trademark practices in China.

1. Notable trademark and anti-unfair competition cases

a. Burberry obtained its first preliminary injunction order against Baneberry

Burberry Limited (“Burberry”) registered the following marks on clothing and related goods. Among them, Cited Mark 1 and Cited Mark 2 have been recognized as well-known marks multiple times.

Cited Mark 1	Cited Mark 2	Cited Mark 3	Cited Mark 4
BURBERRY

Xinboli Trading (Shanghai) Co., Ltd. (“Xinboli”) is the licensee of the following marks.

Licensed Mark 1	Licensed Mark 2
BANEBERRY

Xinboli have been using the Licensed Mark 1 and Licensed Mark 2 (“Licensed Marks”) and similar marks to Burberry’s Cited Mark 3 and Cited Mark 4 on goods that Burberry carried, including clothing styles, designs, hangtags, purses, and bags, as well as the respective goods’ shape. What is more, Xinboli used the royal arms of the United Kingdom (“Royal Arms”) to falsely promote its brand history and sources. Xinboli even opened its own brick and mortar shops or clearance shops in 2019. Xinboli quickly expanded its sales and extended its coverage. At the time Burberry filed for the preliminary injunction at the end of 2020, Xinboli had opened 40 brick and mortar stores in large shopping malls and outlets in first and second tier cities, almost outmatched Burberry’s brick and mortar stores in mainland China. Xinboli also opened its online stores on TMall.com, WeChat, Pingduoduo, and Little Red Book. Xinboli’s actions caused confusion among the relevant public. Burberry sued Xinboli for trademark infringement and unfair competition. After docketing its case, Burberry filed a petition for preliminary injunction against Xinboli.

On January 29, 2021, the Suzhou Intermediate Court held the preliminary injunction hearing. The court ordered Xinboli to immediately stop using the Licensed Marks and immediately stop manufacturing and sell products bearing similar marks to Burberry’s Cited Mark 3 and Cited Mark 4; and immediately stop using the Royal Arms logo on the hangtag of all its products and stop all false promotions.

b. “Louis Vuitton” was recognized as a well-known mark to counter an infringer who abused administrative proceedings to extend its time to attain unjustifiable profits

Louis Vuitton Malletier (“LV”) sued Guangzhou Ruiwang Leather Co., Ltd. (“Ruiwang”) and Rui Wang (together as the “Defendants”) for trademark infringement.

Cited Mark	Disputed Mark

LV filed invalidation request with the CNIPA against the Disputed Mark and the CNIPA invalidated the Disputed Mark during the trial of this trademark infringement case. Ruiwang was unsatisfied with the invalidation decision and appealed to the Beijing IP Court. Considering the Disputed Mark was still valid during the trial, the Defendants argued that this case shall not be docketed because this was not a trademark infringement case but an administrative dispute over trademark registrations.

The court applied Article 11 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes Involving Well-Known Mark Protection (“Interpretation”) in its findings and found that Ruiwang violated the well-known mark provisions stated in Article 13 of the Chinese Trademark Law and LV’s well-known trademark was copied and imitated. Ruiwang’s act constituted an infringement of LV’s trademark right. That is, the court recognized the Cited Mark as a well-known to grant additional protections to LV against Ruiwang’s infringing use of the Disputed Mark.

In this case, LV submitted sufficient evidence to prove that before the Disputed Mark’s application date, LV’s Cited Mark had achieved well-known status. The Disputed Mark’s use on handbags and purses were identical in nature to the Cited Mark’s approved goods of bags, backpack, handbags, fur, artificial leather, suitcase, etc. The Disputed Mark were also identical to the LV’s Cited Mark in terms of font style. Both marks’ design and overall appearance were also highly similar. The Disputed Mark constituted as a copy of the Cited Mark. Moreover, LV’s Cited Mark had been used in China for years and had achieved well-known status. Under such circumstances, the Disputed Mark’s use was likely to cause the relevant public to be confused as to the source of goods and associate the Disputed Mark with LV’s well-known mark, dilute LV’s market reputation and damage LV’s interests. The second instance court ruled in favor of LV and ordered a damage of RMB 500,000 (USD 76,800).

c. Fendi won against unauthorized use in an outlet shopping center

On March 4, 2021, the Shanghai High Court held that Shanghai Yilang International Trade Co., Ltd. (“Yilang”) and Capital Outlets (Kunshan) Commercial Development Co., Ltd. (“Capital”) infringed upon Fendi S.R.L.’s (“Fendi”) trademark right and amounted to unfair competition. Yilang and Capital were ordered to pay FENDI RMB 350,000 (USD 54,000) for economic loss and reasonable legal cost.

The court found that Yilang’s independent use of the mark “FENDI” on its signboard was intended to demonstrate itself as the business operator and management of the mark “FENDI,” which fell into the scope of protection of Fendi’s exclusive trademark right in Class 35 in connection with business operation and business management related services. Yilang’s conduct constituted as trademark infringement. Meanwhile, “Fendi,” as a trade name, had obtained certain fame on the market and was known by the public. Yilang’s independent use of the mark “FENDI” on its signboard without authorization constituted as using Fendi’s business name without authorization and amounted to unfair competition. As Yilang’s operation management, Capital shall be held jointly liable for aiding Yilang’s said trademark infringement and unfair competition for using the mark “FENDI” without authorization.

d. Michael Jordan finally got his name back! Qiao Dan Sports renamed to Zhong Qiao Sports

On December 30, 2020, eight years after Michael Jordan, the American professional basketball player, filed a name dispute against Qiao Dan Sports Co., Inc. (“Qiao Dan Sports”) and Shanghai Bai Ren Trade Co., Ltd. The Shanghai Second Intermediate Court ordered Qiao Dan Sports to publish clarifying statements regarding its relationship with Michael Jordan and issue a public apology. Specifically, the court ordered Qiao Dan Sports to stop using the “Qiao Dan in Chinese (“乔丹”)” part of its corporate name and its “Qiao Dan in Chinese (“乔丹”)” trademarks within 30 days of the effective date of this judgement. On January 12, 2021, Qiao Dan Sports was renamed to Zhong Qiao Sports Co., Ltd.

The court found Qiao Dan Sports knew of Michael Jordan’s fame but still registered or licensed the “Qiao Dan in Chinese (“乔丹”)” trademark, the “Qiao Dan in Chinese (“乔丹”) and Design (a baseball mannequin)” trademark, and the “Qiao Dan in Chinese (“乔丹”) and 23” trademark. And without authorization from Michael Jordan, Qiao Dan Sports used the “Qiao Dan in Chinese (“乔丹”)” mark that was identical with the Chinese translation of Michael Jordan’s last name in sporting goods industry as the distinctive part of its trade name. Further, Qiao Dan Sports promoted the “Qiao Dan in Chinese (“乔丹”)” brand through various media. These business activities were sufficient to confuse the public to associate Qiao Dan Sports with Michael Jordan. Qiao Dan Sports stepped on Michael Jordan’s influence in the sporting goods industry when entering the market to obtain more market opportunities and monetary interests. Accordingly, Qiao Dan Sports’ use of the “Qiao Dan in Chinese (“乔丹”)” mark shall be deemed as infringing upon Michael Jordan’s name right.

e. Paris Baguette in Chinese (巴黎贝甜) recognized as an unregistered well-known mark

Ai Si Bi Xi Investment Co., Ltd. (ASBX), the operator of the famous bakery “Paris Baguette” or “Paris Baguette in Chinese (巴黎贝甜)” sued Beijing Bali Beitian Enterprise Management Co., Ltd. (“Beijing Beitian”) in the Beijing Intellectual Property Court for infringing its unregistered well-known mark right by registering numerous “Ba Li Bei Tian in Chinese (芭黎贝甜)” marks and promoting the marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜)” on Beijing Beitian’s website.

Cited Mark	Disputed Mark

The court found that ASBX’s evidence supported its petition to recognize the marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜)” reached well-known status among relevant consumers as unregistered well-known marks. Beijing Beitian used “Paris Baguette in Chinese (巴黎贝甜)” prominently on its WeChat public account and website caused relevant public associated “Paris Baguette in Chinese (巴黎贝甜)” with Beijing Beitian. Such use was sufficient to mistake the source of services and infringed upon ASBX’s interests on the unregistered well-known marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜).” Meanwhile, ASBX’s unregistered marks “Paris Baguette” and “Paris Baguette in Chinese (巴黎贝甜)” had relative high fame when Beijing Beitian was established. Under such circumstance, Beijing Beitian’s registration and use of the mark “Ba Li Bei Tian in Chinese (芭黎贝甜),” that was highly similar to the unregistered mark “Ba Li Bei Tian in Chinese (巴黎贝甜),” as its trade name was likely to cause confusion among the relevant public and violated the Chinese Anti-unfair Competition Law. The court ordered Beijing Beitian to immediately stop any infringing activities and pay damages and reasonable legal costs of RMB 1.5 million (USD 231,600).

f. Amazon was hammered with RMB 76.4 million (USD 11.8 million) in damages

Beijing Yanhuang Yingdong Technology Development Co., Ltd. (“Yanhuang”) sued Amazon.com, Inc.’s Chinese subsidiary, Amazon Connect Technology Services (Beijing) Co., Ltd. and a Chinese data center and cloud technology provider, Beijing Sinnet Technology Co., Ltd. (“Sinnet”) (together as the “Defendants”) before the Beijing High Court for infringing its registered trademark “AWS.” The court held that the Defendants were jointly liable for trademark infringement. The Defendants shall immediately stop using the “AWS” mark, pay Yanhunag RMB 76.4 million (USD 11.8 million) for economic loss, reasonable legal costs of RMB 260,000 (USD 40,000), and publish a public statement to eliminate any impact caused by its infringements.

Parts of Disputed Marks	Cited Marks

 g. Ferrero received RMB700,000 (USD108,000) in damages for Kinder Surprise Egg packaging decorations infringement

Soremartec SA, Ferrero SpA., and Ferrero Trading (Shanghai) Co., Ltd. (“Ferrero”) sued Chaozhou City Chaoya Distrct Yaliwen Food Factory (“Yaliwen”) for trademark infringement and anti-unfair competition claiming RMB 1 million (USD 154,750) in damages.

Kinder Surprise Egg	Infringing goods

The second instance court held that Yaliwen’s infringing products were similar to Ferrero’s registered trademarks and were used on identical goods, which were likely to cause confusion to the relevant public and infringed upon Ferrero’s trademark rights. The overall appearance of the infringing products was similar to Kinder Surprise Egg’ packaging and decoration, which was likely to cause confusion to the relevant public on the source of goods and amounted to unfair competition.

h. The “Supreme” mark squatter was fined for RMB 8.5 million (USD 1.3 million)

Chapter 4 Corp. (“Chapter 4”), owner of the famous “Supreme” skateboard and streetwear brand, filed an unfair competition lawsuit against Shanghai Jiao She International Trade Co., Ltd. and its retailing partner Zhejiang Outlet Plaza Co., Ltd. (“Defendants”). The Zhejiang Intermediate Court found that Chapter 4’s “Supreme” brand had collaborated with Louis Vuitton, Nike, and Lacoste in China. With other facts found by the CNIPA, the court held that the “Supreme” mark has obtained certain influence and shall be protected under the Anti-unfair Competition Law. Defendants were ordered to immediately stop infringing activities, publish clarifying statements, eliminate negative impacts on the “Supreme” mark, and pay RMB 8.5 million (USD 1.3 million) to Chapter 4 for economic loss and reasonable costs.

i. Wyeth LLC won RMB 30.55 million in punitive damages against infringing trademarks

On December 25, 2020, the Zhejiang Intermediate Court held that Guangzhou Hui Shi Co., Ltd., Zeying CHEN, and Xiaoshen GUANG (together as the “Guangzhou Hui Shi”) jointly infringed upon Wyeth LLC.’s “Hu Shi in Chinese (惠氏)” and “Wyeth” trademark rights. Considering Guangzhou Hui Shi’s obvious subjective bad faith, the court ordered treble punitive damages according to the China Trademark Law along with reasonable costs for RMB 30.55 million (USD 4.7 million).

2. Notable trademark laws, regulations, and news updates

a. The CNIPA published 2020 Annual Trademark Statistics

In 2020, 5.76 million marks were registered from applicants worldwide. Although 2020 was hit by the pandemic, domestic applicants managed to file 7,553 trademark applications under the Madrid Protocol before the CNIPA.With a striking 64.7% year-on-year growth, the CNIPA closed 149,000 trademark oppositions. Among them, 55,079 cases were allowed for registration, 38,988 cases were refused for registration, and 9,176 cases were partially allowed for registration.

358,000 other trademark adjudication cases (including rejection appeals, registration refusal appeals, invalidation actions, non-use cancellation appeals, etc.) were closed, achieving a 7.8% year-on-year growth. Among them, the success rate for refusal appeal was 33.2%, the success rate for invalidation was 70.4%.

The average trademark examination time had been shortened to 4 months.

b. The Supreme People’s Court issued judicial interpretations regarding intellectual property punitive damages and typical cases for guidance

On March 3, 2021, the Supreme People’s Court (“SPC”) issued the Interpretation of The Supreme People’s Court on the Application of Punitive Damages in Adjudicating Infringement of Civil Intellectual Property Infringement Cases (“Interpretation”). The Interpretation stipulated the scope of the application of punitive damages, defined the terms “intentional infringement” and “serious circumstances,” and provided methods for calculating base and reasonable multiples of punitive damages. The Interpretation is aimed at guiding lower courts on application of punitive damages aimed at punishing serious intellectual property infringement conducts.

To better guide the lower courts in applying the Interpretation, the SPC released the Typical Cases of Punitive Damages in Intellectual Property Infringement to ensure proper implementation of the Interpretation.

c. China National Intellectual Property Administration initiates special action against bad faith filings

On March 15, 2021, the CNIPA issued the Special Action Plan for Cracking Down on Malicious Preemptive Trademark Registration (“Action Plan”) , and it specifically aims to crack down on trademark squatting, seeking unjustified interests, disrupting trademark registration management order, and actions causing significant adverse social impact. Some of the noticeable focal points in the Action Plan for foreign trademark owners are to crack down on “squatting relatively famous public figure’s name, famous works or character name” and “squatting relatively famous or inherently distinctive trademark or other commercial marks, damage other’s prior rights.”

3. Suggested Trademark Practices Series – Well-Known Mark Recognitions in China

Securing well-known mark (WKM) recognitions in China can help brand owners to block bad faith trademark filings from registration and invalidate or cancel trademarks registered in bad faith. Securing WKM recognitions in China can also help in trademark infringements and unfair competitions lawsuits because WKM recognitions can be used as legal basis for granting protection on dissimilar goods. In this series, we will share our insights on how to secure WKM recognitions in China. In Part I, we shared WKM recognitions benefits, principles, and evidence collection. In Part II and III, we shared cases with insightful analysis on how the courts apply well-known mark recognitions to various facts. 

1. Well-Known Mark Recognition in China Part I
2. Well-Known Mark Recognition in China Part II
3. Well-Known Mark Recognition in China Part III
4. Well-Known Mark Recognition in China Part IV

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On June 24, 2020, Beijing High Court, as the second instance court, rendered the final and effective judgments on five trademark invalidations against “GU DU XING QIU in Chinese” and “LONELY PLANET and GU DU XING XING in Chinese.” Ms. Yan ZHANG, Ms. Tianmei DENG and Mr. Liang YIN at Beijing East IP Law Firm represented Lonely Planet and won the victory in both the first instance and the second instance.

Zang Baoqing, deputy secretary-general of China Trademark Association, visited Beijing East IP Ltd./Beijing East IP Law Firm with her group members on October 25, 2019 for communication about practical issues of trademark authorization and confirmation.

In October 2016, BEIP’s senior patent attorney and the manager of the Biology and Chemistry division Shanqiang Xiao was invited to present at the APILA’s 2016 Annual Meeting.

The Supreme People’s Court took these cases and held a public hearing in April this year, and this morning (December 8th), the SPC publicly announced its decisions, which reversed in part and affirmed in part. Beijing East IP took a close look at the decisions and summarized the revered decisions.