Weekly China Trademark News Updates

October 31, 2023

1. Damages in a trademark infringement on Loui Vuitton’s “LV” mark was increased from RMB50,000 to RMB120,000

Recently, the Tianjin No. 3 Intermediate Court made a final decision on a trademark infringement lawsuit in favor of Louis Vuitton Malletier (“LV”) and against Chongqing Maoluxin Import and Export Trading Co., Ltd. (“Maoluxin”), and Lutong Chen. The court found Maoluxin infringing LV’s trademarks and increased the damages from RMB50,000 (USD6,800) in the lower court’s decision to RMB120,000 (USD16,400).

The court found that: first, LV has a long brand history and has strong brand influence in the fashion industry. It has been included in China’s national key trademark protection list and has been the target of protection against counterfeits and trademark infringements in Beijing, Shanghai, Guangzhou and other places. The LV and Design mark (“Cited Mark”) has been recognized as a well-known trademark by the courts of many provinces and cities because it has high fame in China and is widely known to the relevant public. The accused infringing mark was not only similar to the Cited Mark, but also similar to other registered trademarks owned by LV, which was enough to cause confusion and misunderstanding among the relevant public, and damage LV’s trademark rights.

Second, when both Tianjin Xingang Customs and the first-instance court determined that the accused infringing products constituted trademark infringement, Maoluxin still did not provide the name, contact information and other information of the traders during the second-instance procedure, which was not only detrimental to traceability and cease of trademark infringement. Such refusal to cooperate with court orders made it more difficult for rights holders to safeguard their rights, which showed Maoluxin’s obvious objective bad faith.

Third, the quantity of exported products was large and the logo used was the same or similar to the well-known Cited Mark. Maoluxin, as the exporter, should also determine whether the accused infringing products constituted infringement and whether the transaction party has the corresponding qualification, etc. However, it failed to exercise duty of care of preliminary screening of said accused infringing products. Once these large quantities of infringing products enter the relevant market, they will definitely damage the legitimate rights and interests of LV and consumers, thereby disrupting the normal order of market competition.

2. “Furuta in Chinese” has established a corresponding relationship with “Furuta”

Recently, the Shanghai Intellectual Property Court concluded a trademark infringement lawsuit between Furuta Food Trading (Shanghai) Co., Ltd. (“Furuta Shanghai”) and Ohisi International Trading (Shanghai) Co., Ltd. (“Ohisi”). The court held that the alleged infringing products s did not infringe upon Furuta Shanghai’s trademark rights.

Furuta in Chinese

Furuta Japan has registered the “Furuta” mark in Japan and China, and Furuta Shanghai has registered the corresponding “Furuta in Chinese” mark in China. Neither of them has registered the “Furuta in Chinese” trademark in Japan, the country where the accused infringing products were exported. Both the accused infringing products and products bearing the “Furuta in Chinese” mark imported and sold by Furuda Shanghai originated from Furuta Japan. Ohisi used the “Furuda in Chinese” mark on Chinese labels of its imported products. Furuda Shanghai sued Ohisi for trademark infringement based on its  “Furuta in Chinese” mark.

The court found that, first, the accused infringing products are genuine, have the same quality as the “Furuta in Chinese” products imported and sold by Furuta Shanghai, and were both legally sourced from Furuta Japan. Furuta Japan is the controlling shareholder of Furuta Shanghai and there was a close relationship between them. Second, although the trademark owner of the “Furuta in Chinese” mark is Furuta Shanghai, after long-term use, the “Furuta in Chinese” trademark and the “Furuta” mark of Furuta Japan have formed a sole correspondence. Furuta Japan also confirmed this corresponding relationship. Thus the identification function of “Furuta in Chinese” in the case is unique and one-directional relationship between the goods and the manufacturer Furuta Japan. Ohisi marked “Furuta in Chinese” on the accused infringing products, which can be used to identify the sole relationship between the “Furuta in Chinese” mark and Furuta Japan and would not cause confusion among the relevant public. Moreover, the quality of accused infringing products were no different than genuine products, which would not cause damage to the quality and goodwill carried by Furuta Japan’s marks and would not damage consumer’s interests. Therefore, the accused infringing acts did not constitute trademark infringement.

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Weekly China Trademark News Updates

October 27, 2023

1. The Apostille Convention will come into effect in China on November 7, 2023

On March 8, 2023, China acceded to the Convention of 5 October 1961 Abolishing the Requirement of Legalization for Foreign Public Documents (“Apostille Convention”). The Convention will enter into force in China on November 7, 2023.

The Apostille Convention is an international treaty with the widest scope of application and the largest number of contracting parties under the framework of the Hague Conference on private international law. It aims to simplify the procedures for cross-border circulation of public documents. Starting from November 7, official documents sent by China to other contracting states for use only need to apply for the apostille as stipulated in the Apostille Convention. There is no need to apply for consular legalization services at the embassies or consulates in China of other contracting states. When official documents from other contracting states are sent to mainland China for use, only an apostille from that country is required, and there is no need to apply for consular legalization by the local embassy or consulate of China in that country.

The Ministry of Foreign Affairs of China is the competent authority for additional certificates stipulated in the Convention and issues additional certificates for official documents issued within the country. Entrusted by the Ministry of Foreign Affairs, the foreign affairs offices of the China’s governments of relevant provinces, autonomous regions, and municipalities directly under the Central Government of China, as well as the foreign affairs offices of some municipal people’s governments, can issue additional certificates for official documents issued within their own administrative regions. For specific procedures and requirements for applying for additional certificates, please log on to the China Consular Service Network (http://cs.mfa.gov.cn) or the websites of relevant local foreign affairs offices.

China’s apostille will be in the form of a sticker with a silver national emblem seal. Additional certificates issued by the Chinese Ministry of Foreign Affairs and relevant local foreign affairs offices support online verification. There is a website provided along with this news release as follows. http://consular.mfa.gov.cn/VERIFY/.  However, at the time of posting this news, this website is not yet available.

Please note that this is a general news release from the China Foreign Ministry. The people’s courts have not yet released any news regarding abolishing the current notarization and legalization practices. Therefore, we recommend continue with all pending notarizations and legalizations until further notice.

Please see here the link to the news in Chinese.

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Weekly China Trademark News Updates

October 25, 2023

1. A trademark containing deceptive elements cannot be registered by giving up some of its constituent elements and limiting the scope of goods

Disputed Mark	Designated Goods
No. G1563666	Class 22: Carbon fibers for textiles; nonwoven polymer fibers for textiles; textile fibers; plastic fibers for textiles; chemical fibers for textiles; polyimide fibers for textiles; all the above goods are related to polyimide (PI) in the field of new materials.

In an administrative dispute between PI Advanced Materials Co., Ltd. (“PAM”) and CNIPA, the Beijing Intellectual Property Office ruled to reject the PAM’s claim.

The focus of the dispute in this case is whether the extended territorial protection of the Disputed Mark for use in Class 22 in China violates the provisions of Article 10(1)(vii) of the Chinese Trademark Law.

The court found that although the goods designated for use by PAM’s Disputed Mark have been limited to “all the above-mentioned goods that are related to polyimide (PI) in the field of new materials”, however, this limitation is PAM’s own limitation on Class 22 related goods. This specific limitation came from its UK-specific basic trademark application. PAM did not submit evidence to prove that the above restrictions had a substantial impact on the goods designated for use for the Disputed Mark. For international registrations that designated China, the CNIPA exams in accordance with the China Trademark Law and relevant regulations. If the application satisfies the Trademark Law or relevant regulations or the trademark used on partial designated goods satisfies the Trademark Law or regulations, it will be preliminarily approved and published for opposition.  The Disputed Mark consisted of the English words “PI” “Advanced Materials” and a design. The English part has the meaning of “polyimide” “advanced materials or new materials” and is designated for use in Class 22 for “carbon fiber for textiles” and other goods. However, the said goods do not necessarily use polyimide in the field of new materials. Based on the general understandings and daily life experience, the public would easily associate the said goods’ characteristics with the attributes of the goods designated by the Disputed Mark, which would cause the public to misunderstand the composition, quality and other characteristics of the goods “carbon fiber for textiles” in Class 22.

In addition, although PAM claimed that it had abandoned the exclusive right to use the English words “PI” and “Advanced Materials” in the Disputed Mark, the relevant public did not naturally know the relevant circumstances of the abandonment of the exclusive rights in the Disputed Mark and would still use the English “PI” and “Advanced Materials” as constituent elements and distinctive part of the trademark. Article 10(1)(vii) of the Trademark Law is an absolute factor in prohibiting the registration of a trademark, and a sign that violate this provision shall not be used as trademarks. Where a mark itself lacks the said characteristic it cannot be overcome by adding other elements or through subsequent use. PAM’s claim that the design part of the Disputed Mark was identifiable and has a high reputation after use does not affect the judgment of whether the Disputed Mark violates Article 10(1)(vii) of the Trademark Law. In addition, trademark right authorization and confirmation cases follow the principle of case-by-case review, and the application, examination, and approval status of other trademarks do not necessarily have relevance to this case. Therefore, the CNIPA’s conclusion that the Disputed Mark violates Article 10(1)(vii) was correct and shall be affirmed.

2. The use of a registered mark in the title of an online store product link constitutes trademark infringement

The Zhejiang High Court recently concluded a trademark infringement dispute between the appellant Chongqing Jinlingyang E-commerce Co., Ltd. (“Jinlingyang”), the appellant Hubei Liangpinpuzi E-commerce Co., Ltd. (“Liangpinpuzi”), and the appellee Zhejiang Tmall Network Co., Ltd. (“Tmall”). The court affirmed the lower court’s decision.

Jinlingyang is the registered trademark owner of the “Zihaiguo in Chinese” trademark with reg. no. 28149844 and claimed that Liangpinpuzi uses of the word “Zihaiguo” in the product link title of its online store constituted a trademark infringement of its said registered trademark. The first instance court found that Liangpinpuzi’s action constituted trademark infringement of Jinlingyang’s registered trademark and ordered Liangpinpuzi to compensate Jinlingyang for economic losses and reasonable expenses incurred to stop the infringement totaling RMB 60,000 (USD8,200). Both parties appealed the first instance judgment.

The key issues of the dispute in the second instance court are: 1. Whether Liangpinpuzi’s action constituted trademark infringement. 2. If there is an infringement, whether the amount of compensation determined by the first instance judgment is reasonable.

Regarding the first issue, the Zhejiang High Court found that the word “Zihaiguo” was used in the product link title of Liangpinpuzi’s subsidiary’s online store to promote the product played a role in identifying the source of the product, and it was a trademark use. The accused infringing product is a self-heating hot pot, which is similar to instant rice, lunch boxes, instant vermicelli and other products approved for use by Jinlingyang’s registered trademark “Zihaiguo” with reg. no. 28149844. “Zihaiguo” is a fanciful word with strong distinctiveness. Liangpinpuzi argued that “Zihaiguo” is a descriptive term but failed to provide sufficient evidence to support its claim. Comparing the accused infringement mark “Zihaiguo” with Jinlingyang’s registered trademark, the text composition, pronunciation, and meaning are all the same. Only the fonts are different. The two constitute similar trademarks. Liangpinpuzi used the word “Zihaiguo” in the title of a product sales link similar to Jinlingyang’s registered trademark, which could easily cause the relevant public to misunderstand the source of the product or believe that its source is specifically related to the product with Jinlingyang’s registered trademark, which would cause confusion and mistaken beliefs. Therefore, the accused action of Liangpinpuzi constituted a trademark infringement of Jinlingyang.

Regarding the second issue, the Zhejiang High Court found that Liangpinpuzi had infringed upon Jinlingyang’s registered trademark rights and should bear legal responsibilities such as stopping the infringement and compensating for losses. Regarding the amount of compensation, in the second instance, Jinlingyang claimed a compensation amount of RMB 1.5 million (USD205,007) based on the sales volume of the infringing products of Liangpinpuzi. The Zhejiang High Court held that the first-instance court obtained the transaction data of the accused infringing products from Tmall. The sales volume of the infringing links with the words “Zihaiguo” were 8,220 and 11,469 items, respectively, of which 1,794 were duplicate orders. Although Jinlingyang disputed the data, it did not provide contrary evidence. Under such circumstances, it was not inappropriate for the first instance court to adopt the sales data and use it as a consideration in determining the amount of compensation. Since Jinlingyang’s losses due to the infringement or Liangpinpuzi’s profits from infringement could not be completely ascertained, the first instance court comprehensively considered the nature, manifestation, circumstances and consequences of the infringement of Liangpinpuzi, the price, sales of the infringing products data, the reasonable expenses paid by Jinlingyang to stop the infringement and other factors. The court determined that Liangpinpuzi should compensate Jinlingyang for economic losses of RMB 60,000 (including reasonable rights protection expenses) in the form of statutory compensation, which was within the discretion of the court and was not inappropriate. In summary, the appeals from both parties shall be rejected.

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Weekly China Trademark News Updates

October 12, 2023

1. The CNIPA issues “Guidelines on Same-Day Trademark Applications Procedures”

On September 27, 2023, the CNIPA issued the “Guidelines on Same-Day Trademark Applications Procedures,” which further clarified the examination procedures and precautions for the trademark applications filed on the same day and clarified the exceptions on same-day trademark applications procedures. According to the Guidelines, in principle, the same-day trademark   applications procedure should first determine the ownership of the trademark application rights and followed by a comprehensive substantive examination of the trademark application. However, if there are valid prior trademarks, and/or that the new application violated Article 19(4) and/or Article 4 of the China Trademark Law, such application shall be rejected. The Guidelines listed some specific exceptions, including the “Leishenshan (Thunder God Mountain)” trademark squatting case, the “Bing Dwen Dwen” trademark squatting case, and deliberate same day filings of “Morphy in Chinese” marks, etc.

2. Online submission of trademark oppositions will be fully implemented

On October 7, 2023, the CNIPA issued a notice that starting from December 1, 2023, trademark agencies handling oppositions should, in principle, submit electronic applications through the trademark online service system and no longer submit paper applications.

3. Schneider Electric (China) Co., Ltd. wins a trademark invalidation case

Cited Marks	Disputed Mark

Gastongerin Electric (Shenzhen) Co., Ltd. (“Gastongerin”) applied for registration of the “Gastongerin” trademark with reg. no. 21978816 (“Disputed Mark”) on November 21, 2016. The Disputed Mark was approved for registration on January 7, 2018. Schneider Electric (China) Co., Ltd. (“Schneider”) filed an invalidation based on its Cited Marks. After trial, the CNIPA decided that the Disputed Mark should be invalidated. Gastongerin appealed the CNIPA’s decision to the court. After trial, the court found that the “coaxial cables, power supply materials (wires, cables), telephone lines; etc.” approved under the Disputed Mark and the “wires, batteries, circuit breakers; etc.”  approved under the Cited Marks 1 to 3 fall into the same subclasses based on the CNIPA Classification. The said goods were also similar in functions, uses, production departments, sales channels, consumer objects, etc., and constituted identical or similar goods. The Disputed Mark “Gastongerin” is in English, the Cited Mark 1 is “MERLIN GERIN and Design,” and the Cited Marks 2-3 are both “MERLIN GERIN” in English. Comparing the Disputed Mark with the Cited Marks 1 to 3, the English composition and arrangement of the second half of the Disputed Mark and the Cited Marks 1 to 3 were identical. Only the capitalization of the letters was different, hence, these marks shall constitute similar marks. The submitted evidence shows that Gastongerin had previously applied the “MELINGERIN” and “MG” design marks that were similar to Schneider’s “MERLINGERIN” logo, but both were invalidated or refused by the CNIPA. On this basis, if the Disputed Mark and the Cited Marks coexist in the market, it will easily cause confusion and misunderstanding among the relevant public, or make the public to believe that there was some connection between the source of the goods. Therefore, the Disputed Mark and the Cited Marks constituted similar marks used on identical or similar goods, which violated Article 30 of the 2013 China Trademark Law. Accordingly, the Beijing Intellectual Property Court and the Beijing High Court upheld the CNIPA’s decision.

4. Overseas trademarks use and promotions can be deemed to have been used in China and have a certain degree of fame

Guangzhou Hanhuijiaoren Cosmetics Co., Ltd. (“Hanhuijiaoren”) applied to register the “V7 Toning Light” mark with reg. no. 17769144 (“Disputed Mark”) on August 27, 2015. The Disputed Mark was approved on December 21, 2017. HAVE & BE CO.，LTD (“HAVE & BE”) filed an invalidation against the Disputed Mark. After trial, the CNIPA invalidated the Disputed Mark. Hanhuijiaoren dissatisfied with the decision and appealed to the court. After trial, the court found that the Disputed Mark’s application date was only a few months apart from the time when HAVE & BE launched and promoted the “V7 Toning Light” brand, and that HAVE & BE used and promoted the “V7 Toning Light” mark. The evidence, however, was mostly formed outside China, but in the Internet age, consumers learned about new overseas brands in real time through overseas websites, and purchase hot-selling overseas brand products through new marketing models such as purchasing agents, overseas purchases, and outbound travel duty-free shopping. HAVE & BE also provided evidence showing beauty bloggers’ Weibo posts, purchasing agents’ articles and comments related to “V7 Toning Light” facial cream and other products, which can prove that relevant consumers in China knew of HAVE & BE’s “V7 Toning Light” before the Disputed Mark’s application date, and has a certain degree of understanding and awareness. Comprehensively considered the following circumstances: 1. Hanhuijiaoren and HAVE & BE were operators in the same industry; 2. The “V7 Toning Light” trademark was a made-up word. Hanhuijiaoren applied for registration of an identical mark previously used by HAVE & BE  and Hanhuijiaoren had given no reasonable explanations; 3. Hanhuijiaoren has subjective bad faith in taking advantage of HAVE & BE’s products, which can be determined that before the Disputed Mark’s application date, HAVE & BE’s “V7 Toning Light” mark has been used on “cosmetics” products in China and has a certain degree of fame. Products such as “facial cleanser, cosmetics, toothpaste” used under the Disputed Mrak highly overlapped with “cosmetics” products previously used by HAVE & BE ’s “V7 Toning Light” unregistered mark in terms of production departments, sales channels, consumer groups, etc. These goods constituted as identical or similar goods. The Disputed Mark was identical with the “V7 Toning Light” mark previously used by HAVE & BE. Therefore, the Disputed Mark’s approved goods constituted the situation under the 2013 Trademark Law where “a trademark that is already used by others and has a certain influence shall not be preemptively registered by unfair means” and should be invalidated.

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China’s new punitive damages system bolsters protection against trademark infringement

Weekly China Trademark News Updates

September 20, 2023

1. Legislative Plans of the Standing Committee of the National People’s Congress involve trademark law, anti-unfair competition law, etc.

The 14th National People’s Congress Standing Committee has recently released its legislative plan, covering a total of 130 cases divided into three categories: the first category is 79 relatively mature draft laws for review, including the Draft Anti-unfair Competition Law, etc. The second category is 51 draft laws that need to be worked on quickly and should be reviewed when conditions are met, including the Draft Trademark Law, etc. The third category is those that have not yet met legislative conditions, and continued research and demonstration such as data ownership and network governance.

2. Capcom’s application for the Chinese name of Street Fighter in class 41 was refused again

The video game company Capcom used “街头霸王”/“街霸” as the Chinese name for its game “Street Fighter.”

CAPCOM U.S.A., INC. (“Capcom”) has successively applied for “街霸 (JIE BA in Chinese)” on online games, amusement arcade services, entertainment, and other services in Class 41 in November 2017, December 2019, and April 2021, but all of them have been refused by the CNIPA based on Article 10.1.8 for unhealthy social influence.

For its third attempt, Capcom had decided to appeal the CNIPA decision to the Beijing IP Court. The Court rejected its claims by affirming Article 10.1.8, and Capcom further pursued the case to the next level, the Beijing High Court, arguing that:

1. The State Administration of Press, Publication, Radio, Film and Television has determined that “JIE BA in Chinese” does not contain objectionable content and complies with national regulations and has approved its publication and operation. The “JIE BA in Chinese” game has never been punished for containing objectionable content since its release in the mainland Chinese market.
2. The Disputed Mark has a positive meaning and does not violate Article 10.1.8 of the Trademark Law.
3. The Disputed Mark has gained extremely high popularity and reputation through extensive use without causing any adverse effects.
4. A mark containing the word “JIE BA in Chinese” has been approved for registration, which proves that the meaning of ” JIE BA in Chinese” is positive and will not cause any adverse effects.
5. Several prior cases have pointed out that when the CNIPA determines whether a trademark constitutes the circumstances of Article 10.1.8 of the Trademark Law, it should be based on objective facts and avoid subjective assumptions.

The Beijing High Court has just rendered the second instance judgment. In its opinion, the court held that: in this case, the Disputed Mark consisted of the Chinese characters “街霸.” According to the general understanding of the Chinese public, “街霸” has meanings such as “bully in the street” and “bullying.” If used as a trademark on ” amusement arcade services; entertainment information” and other services, they will likely have a negative impact on China’s culture, which fell under the circumstances stipulated in Article 10.1.8 of the Trademark Law. In addition, the opinion of the State Administration of Press, Publication, Radio, Film and Television about the absence of objectionable content in the game “Street Fighter 5” was not necessarily related to the determination whether the Disputed Mark in this case should be approved for registration. The application, review, and approval status of other trademarks are not relevant to this case and cannot be the basis for concluding this case. Therefore, the appeal was dismissed and the original judgment was affirmed.

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Weekly China Trademark News Updates

September 13, 2023

1. Corporate name conflicted with a prior trademark

The Beijing IP Court concluded a trademark infringement and unfair competition dispute between the appellant Guangzhou Xuetu Education Consulting Co., Ltd. (“Xuetu”) and the appellee Xiaoyuantong (Beijing) Technology Co., Ltd. (“Xiaoyuantong”). The court made a final judgment that dismissed the appeal and affirmed the lower court’s decision.

The Beijing IP Court found that: here, the Xuetu.com screen recording files and credible timestamp authentication certificates submitted by Xiaoyuantong, and multiple contracts and corresponding invoices signed by Xiaoyuantong and other third parties clearly showed that Xiaoyuantong has promoted its own education, study tours, and other contents to a certain extent, and cooperated with third parties on education, study tours, training, and other businesses, or authorized third parties to use the “Xuetu in Chinese” mark to carry out education, training, and related promotion activities. The “Xuetu in Chinese” logo was displayed or marked on relevant websites and transaction documents, which played a role in distinguishing the source of services. In terms of service content, purpose, object, and method, these services fall into Class 41 for education, organizational education, and Class 39 for tourism. The occurrence or duration of the relevant transactions was three years before the first instance of this case. Accordingly, the first instance court found that the Xiaoyuantong had used the cited mark on a certain scale and had a certain degree of popularity, which was legally justified and was not inappropriate. The Beijing IP Court affirmed the first instance court’s said finding.

In this case, Xuetu promoted the research services it provided as an experiential learning method for students. Compared with the education, organizational education, and travel companionship approved for use of the cited mark, the two are highly related or overlapped in terms of service objects, content, methods, nature, etc., and are similar services. The evidence in the case was insufficient to prove that before Xuetu applied for registration of the trademark “Xuetuyanxue in Chinese” with app. no. 3223265, it used the “Xuetuyanxue in Chinese” logo on a certain scale and had a certain influence.

Xuetu’s use of the “Xuetu in Chinese” logo and the prominent part of the cited mark both contained “Xuetu in Chinese,” and the characters were identical, which constituted as similar marks. The use of the disputed mark on services similar to the approved use of the cited mark was enough to cause confusion to the general public about the source of the service, or tricked to believed that there was a trademark licensing or associated relationship between the two, which violated Article 57(2) of the Chinese Trademark Law. The first instance court’s determination was correct, and this court upheld it.

2. “Mao in Chinese” of “Maotai in Chinese” is a registered trademark of Moutai! The “Zhamao in Chinese” mark application was rejected based on its similarity with “Mao”

The Beijing High Court made a final decision on an administrative dispute case that affirmed the rejection of the “Zhamao in Chinese” trademark application.

The Beijing High Court found that, in this case, the distinctive Chinese character for the disputed trademark is “Zhamao in Chinese,” and the distinctive Chinese characters for each cited trademark were “Mao in Chinese.” If the disputed mark and the cited marks were used in the same or similar class, the relevant public paid general attention is likely to believe that the goods were from the same entity or they have a specific association, which will lead to confusion and misunderstanding, thus, the marks constituted similar trademarks. In addition, the evidence on record submitted by Xiaolin Jiang was insufficient to prove that the disputed mark has gained a certain degree of popularity through use and produced distinctive features that can distinguish it from the cited marks. The findings of the first instance court that the disputed mark violated Article 30 of the Chinese Trademark Law was appropriate, and this court affirmed.

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Weekly China Trademark News Updates

September 5, 2023

1. The China Supreme Court fully supports Siemens’ trademark infringement and unfair competition claims of RMB 100 million

Recently, the China Supreme Court (“SPC”) concluded a trademark infringement and unfair competition lawsuit between the appellant Ningbo Qishui Electric Co., Ltd. (“Qishuai”) and the appellees Siemens AG (“Siemens”) and Siemens (China) Co., Ltd. (“Siemens China”). The appeal petition was rejected and the first instance’s decision that Qishuai shall immediately cease infringement and unfair competition acts, and that Qishuai shall compensate Siemens and Siemens China for RMB100 million (USD13.72 million) in economic loss and RMB163,000 (USD22,356) in reasonable expenses was affirmed.

One of the issues in this case was Qishuai’s use of the “Shanghai Siemens Electronics Co., Ltd. in Chinese” logo on a laundry machine’s body. The SPC found that first, Qishuai used the label in a prominent position on the laundry machine. The relevant public was likely to use it to distinguish the source of goods, which shall constitute trademark use. Although Qishuai argued that such logo is the business name of a third party, and it was legally authorized to use such business name, generally, it isn’t common for companies using another company’s name on its product’s prominent position. Second, the product that Qishuai used the logo was the same type of product as those approved for use in class 7 for laundry machine related goods under Siemens’ Cited Mark “Siemens in Chinese.” Third, the “Siemens” consisted in the “Shanghai Siemens Electronics Co., Ltd. in Chinese” logo was the distinctive part of the logo and identical with the Cited Mark. It shall constitute similar mark with the Cited Mark. Accordingly, Qishuai used the “Shanghai Siemens Electronics Co., Ltd. in Chinese” logo on its laundry machine as a trademark, which constituted similar to the Cited Mark “Siemens in Chinese” and was likely to cause confusion among the relevant public. Such use also infringed upon Siemens and Siemens China’s trademark right. Another issue in this case was regarding Qishuai’s use of the business name of “Shanghai Siemens Electronics Co., Ltd. in Chinese” on the package of the infringing product and promotional activities. The “Siemens in Chinese” in said business name was identical with the trade name and registered trademark of Siemens and Siemens China, which was likely to cause relevant public to believe that such product was from Siemens and Siemens China, or mistakenly believe that there were associations with Siemens and Siemens China. Qishuai’s use of other’s business name that has certain influence and other’s registered trademark as trade name constituted unfair competition.

Regarding the amount of compensation, the SPC found that 1) part of the promotional documents submitted by Siemens and Siemens China showed that Qishuai’s scale of production and sales was enormous. Numerous news reported that its annual sales towards RMB1.5 billion. 2) Investigations from various Administration for Market Regulations showed that Qishuai used the “Shanghai Siemens Electronics Co., Ltd. in Chinese” logo in a wide range of laundry machine models for sale that reached most municipalities and provinces nationwide. Meanwhile, Qishuai claimed that it operates more than 1,500 national distributors and has more than 58,000 retailers, which proved the wide range of its products sales. 3) From the numbers of models shown on Qishuai’s 3C certification certificates, it can be assumed that there were numerous infringing products models, and the productions scale was large. Combined with the said fact findings and the profit percentage in the laundry machine industry, it can be found that Qishuai’s production and sale of the infringing products far exceeded the maximum statutory damages in the Anti-unfair Competition Law. Comprehensively consider the relatively high fame of Siemens and Siemens China, objective bad faith of Qishuai, a large scale of infringement, and a long duration, the compensation amount shall be above the maximum statutory number. Given that Qishuai failed to produce its financial data as evidence, the first instance court did not err when it calculated the compensation amount based the total sales found in the submitted new reports evidence, using 1/15 of the percentage of the infringing products’ sales in reaching its decision.

2. The Jiangsu High Court cited the Anti-unfair Competition Law to protect foreign geographical indications across industries

The Suzhou Intermediate Court concluded a first instance unfair competition dispute between the plaintiff, the French National Cognac Industry Office (“Cognac Industry Office”), and the defendants Ford Motor (China) Co., Ltd. (“Ford China”), Changan Ford Motor Co., Ltd. (“Changan Ford”), and Suzhou Tianchi Xinjia Automobile Sales & Service Co., Ltd. (“Tianchi”).  The Suzhou Intermediate Court found that Ford China, Changan Ford shall immediately stop using “Cognac in Chinese” and “COGNAC,” geographical indications, as the name of color of its cars. Changan Ford shall immediately stop sales said cars. The defendants shall compensate the plaintiff for RMB2 million (USD 274,145) in economic loss and reasonable expenses. The Jiangsu High Court recently concluded the second instance trial that rejected the appeal and affirmed the Suzhou Intermediate Court’s decision.

The Court found that Ford China, Changan Ford named four models of its cars in three styles as “Special COGNAC version” that used “CONGAC” prominently and has cognac brown interiors. Moreover, large amount of promotional materials used various explanations and comparisons to highlight the differences in these special version cars compared to regular version in order to enhance the style and taste of the cars involved in the case.

In China’s color regulations, “COGNAC” is not included and cognac brown is also not a generic name that’s commonly used. Under the circumstances that Cognac, as a geographical indicator, is highly famous, Ford China and Changan Ford, as a worldwide car manufacturer, could not possibly be unaware of its fame. Multinational companies like Ford China and Changan Ford shall bear higher intellectual property awareness than other regular businesses. It shall apply stringent considerations when naming its car models and avoid infringing other’s legal interests. However, instead of fulfilling its reasonable duty of care, Ford China and Changan Ford established a specific relationship with the Cognac geographical indication through various improper methods, which caused confusion and misunderstanding among the relevant public.

The relevant public of Cognac includes high-end consumers, which has certain overlap with car consumers of Ford China and Changan Ford. Their actions were enough to mislead the relevant public and make the relevant public mistakenly believe that the four models of cars in three styles have some specific connection with the Cognac Industry Office and were launched in cooperation with the Cognac Industry Office. Although Cognac as a geographical indication mainly refers to a type of wine, under the trend of diversified development of modern industries, cross-border cooperation and mixed operations are becoming more and more common, Ford China and Changan Ford’s use of “Cognac in Chinese” and “COGNAC” can easily cause confusion among the relevant public. Their behavior was clearly an act of improper use of the goodwill of “Cognac” that was confusing enough to cause people to mistake it for Cognac related goods or has a specific connection with Cognac, the location, and constituted unfair competition.

In particular, it should be pointed out that the reason why Ford China and Changan Ford’s involvement in the case constituted unfair competition is that there is another important interest balance to prevent the risk of generalization of the “Cognac” geographical indication. Even if the acts of Ford China and Changan Ford would not cause confusion and misunderstanding among the relevant public, since Ford China and Changan Ford are part of a worldwide automobile manufacturer that has a large number of consumer groups. Their use of the “Cognac” geographical indication in the naming of automobile products and interior colors would cause the relevant public include additional meanings to the original understanding of “Cognac” as the geographical indication of the special origin of a type of brandy wine. Such use by Ford China and Changan Ford will definitely weaken its original meaning as the special origin of a type of brandy wine, and exposed “Cognac” to become a generic name. Ford China and Changan Ford’s acts enhanced the possibility of revocation of Cognac as a geographic indicator, which undoubtedly damage the long term promotion, marketing, and operating of “Cognac” as a geographic indicator by the Cognac Industry Office. Consider the above, the court made a negative evaluation of the behaviors of Ford China and Changan Ford in order to provide legal guidance to the behavior of other market players.

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Weekly China Trademark News Updates

August 30, 2023

1. The “Pigeon in Chinese” mark was recognized as a well-known mark on goods of pacifiers and baby bottles

The Beijing High Court recently concluded a final judgment on an administrative trademark invalidation dispute over the “Pigeon in Chinese” mark with reg. no. 16530290 (“Disputed Mark”). The court recognized that the “Pigeon in Chinese” mark with reg. no. 1161193 (“Cited Mark”) owned by Pigeon Corporation as a well-known mark when used on pacifiers, baby bottles, and other related goods, and invalidated the Disputed Mark citing Article 13(3) of the China Trademark Law (well-known mark recognition).

(Cited Mark)

The court found that according to the trademark licensing agreement, advertising and media reports submitted by Pigeon Corporation, such as evidence of participation in exhibitions, the sales revenue, special audit advertising package, and the social welfare activities participated, and honors received, can be used to determine that before the application date of the Disputed Mark, Pigeon Corporation had been selling products in China for a long time. At the same time, Pigeon Corporation had also carried out continuous and extensive publicity of the products marked with the Cited Mark nationwide through various forms. In sum, the evidence submitted by Pigeon Corporation can prove that the Cited Mark constituted a well-known mark on the goods of “pacifiers and baby bottles” through its continuous use and extensive publicity before the application date of the Disputed Mark.

The Disputed Mark constituted a copy of the Cited Mark. The Disputed Mark was approved for use in Class 17 for “liquid rubber, synthetic rubber” and other goods that are the raw materials for the production of pacifier and baby bottle related goods. Thus, the goods under the Disputed Mark were closely related to pacifiers and baby bottles that Pigeon Corporation’s well-known mark was known for. Considering that the Cited Mark enjoys relatively high fame, the owner of the Disputed Mark should have known it because they situated in the same industry, however, it did not attempt to avoid but registered multiplate marks that were identical to the Cited Mark, which cannot be deemed to have subjective good faith. Under the circumstances that the Cited Mark has been recognized as a well-known mark and that the Disputed Mark is a copy of it, the relevant public would likely to associate the two entities upon seeing the Disputed Mark being used on liquid rubber or synthetic rubber goods, which would dilute the distinctiveness of the Cited Mark and also damage the interests of Pigeon Corporation.

2. The “KISSES” and “Hershey in Chinese” marks recognized as well-known marks, and the infringer ordered to pay RMB 3 million in damages

Recently, the Shandong High Court concluded a trademark infringement and unfair competition lawsuit between the Hershey Company (“Hershey”, the plaintiff), Royal Xipu (Fujian) Culture Communication Co., Ltd. (“Royal Xipu”), Fuzhou Heerxi Food Co., Ltd., (Heerxi), Anhui Diye Food Technology Co., Ltd. (“Diye”), and Qingdao Youtong Chain Commercial Co., Ltd. (“Youtong”) (hereinafter referred to as “the defendants”). The court affirmed the lower court’s decision in finding that Hershey’s “KISSES” mark with reg. no. 159261 and “Hershey” with reg. no. 1239102 constituted well-known marks on chocolate and candy goods. The defendants’ acts constituted trademark infringement and were ordered to compensate Hershey for economic losses of RMB 3 million (USD411,263).

(Cited Marks)

The court found that: First, according to the evidence provided by Hershey, it was sufficient to prove that prior to Royal Xipu’s trademark applications for the “KISSES” mark and the “Hershey’s Kiss in Chinese” mark in August 2013, Hershey’s “KISSES” mark with reg. no. 159261 and “Hershey” mark with reg. no. 1239102 have been used continuously for more than ten years, and after vigorous promotion by Hershey and its affiliated companies, the Cited Marks have gained high fame and influence on chocolate and candy goods and were widely known by the public. Therefore, they should be recognized as well-known marks on chocolate and candy goods.

Second, as an operator in the same industry as Hershey, Royal Xipu should have known the popularity of Hershey’s marks and should follow the principle of good faith when applying for trademark registrations by avoiding filing identical or similar marks with others. However, Roay Xipu’s filings shown obvious intention in copying and imitating Hershey’s marks, taking advantage of Hershey’s well-established fame and reputation in order to obtain unjustified gains. Although by the time Hershey initiated the invalidation, the five-year time limit of Royal Xipu’s registered marks had passed, given Royal Xipu registered its marks in bad faith, Hershey was not subject to the five-year time limit.

Third, the allegedly infringing “KISSES” logo constituted an identical mark with Hershey’s “KISSES” mark with reg. no. 159261. The “Hershey’s Kiss in Chinese” mark completely included Hershey’s “Hershey” mark, and it did not form other significant meanings. Considering that Hershey’s marks already enjoyed relatively high fame and constituted well-known marks, Royal Xipu and Heerxi’s uses were likely to cause confusion among the relevant public to believe that these entities were associated with Hershey, which would damage Hershey’s interests and infringed Hershey’s well-known mark rights.

3. Xiaomi awarded RMB 37 million in compensation against the “Xiaomi Pai in Chinese” mark

Recently, the Shenzhen Intermediate Court concluded a trademark infringement and unfair competition lawsuit between Xiaomi Technology Co., Ltd. (“Xiaomi”) and Shenzhen Leerfu Trading Co., Ltd. (“Leerfu”). The court ruled in favor of Xiaomi and ordered Leerfu to pay Xiaomi RMB 37 million (USD 5.08 million) for economic losses.

(Cited Mark)

The court, in comparing the words “Xiaomi Pai” with the Cited Mark, found that both include “Xiaomi”, and the main difference is the addition word of “Pai.” The alleged infringing product in this case was a tablet, and the pronunciation of the Chinese character of “pai” is similar to the English “Pad.” Under these circumstances, general consumers would believe that “Xiaomi Pai” has the meaning of a tablet produced by Xiaomi. Combining with Lererfu’s slogans such as “authentic product on the official website” in the title of the accused infringing products, and the defendant’s own admission that use of “Xiaomi Pai” would increase product sales before the Shenzhen Market Supervision Administration, it can be determined that Leerfu intended to mislead the relevant public into believing that its tablet came from Xiaomi. Its use of “Xiaomi Pai” in its online store had actually caused confusion.

Regarding the punitive damages, the court held that the application of punitive damages is based on whether the subjective intention of Leerfu when infringing Xiaomi’s Cited Mark constituted serious circumstances. In this case, (1) Xiaomi’s Cited Mark enjoyed high reputation. As an operator in the same industry, it was impossible for Leerfu to be unaware that Xiaomi has the rights to the Cited Mark. Combining with the defendant’s self-admission that the use of “Xiaomi Pai” can help in sales of its tablet, Leerfu’s use of the “Xiaomi Pai” mark can be deemed to have taken advantage of the goodwill of Xiaomi’s Cited Mark. The above factors were sufficient to determine that Leerfu has the intention to infringe. (2) With regard to the determination of the seriousness of the circumstances, in this case, first, the amount of profit made by Leerfu was RMB8.13 million (USD1.12 million), which can be deemed as a huge profit from the infringement. Second, Leerfu had sold the alleged infringing products between August 2020 and August 2021 through an online marketplace. The geographic area of its infringement was broad, the infringement duration was long. What’s more, Leerfu’s online marketplace was previously complained by Xiaomi but Leerfu continued its infringing acts. Last, Leerfu carried out identical infringing acts with another defendant in another case, they had jointly infringed Xiaomi’s trademark right. Their infringement scale was large and relied its living on such infringement. Considering the above, Leerfu’s infringing acts constituted serious circumstances.

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Weekly China Trademark News Updates

August 23, 2023

1. A liquor company infringed on Tesla’s well-known mark rights and were ordered to pay RMB 5 million in damages

The appellant China Food and Beverage Co., Ltd. (“China F&B”) and Guangdong China Food and Beverage Co., Ltd. (“Guangdong China F&B”) had a trademark infringement and unfair competition dispute with the appellee Tesla (Shanghai) Co., Ltd. (“Tesla”), Tangjiu Network Technology (Shanghai) Co., Ltd. (“Tangjiu”). The Shanghai High Court made a second instance judgment rejecting the appeal and upheld the original judgment.

Appellant’s Registered  Mark	Appellee’s Cited Marks
Reg. No. 13113593	Reg. Nos. 7792673, 13690430, 13690430, 8008888, 13690442, G1199687

The main issues in the second instance were: first, whether the use of the accused infringing logos by China F&B and Guangdong China F&B infringed Tesla’s trademark rights. Second, whether the amount of compensation awarded in the first instance was wrong.

Regarding issue 1, first, whether the Cited Marks involved in Tesla’s case constituted well-known marks. Here, the goods involved in the approved use of the Cited Marks were electric vehicles, electric vehicles, automobiles and its structural parts, etc. in class 12. The appellants’ use of the accused infringing logos on liquor products violated Tesla’s trademark rights. Since Tesla’s Cited Marks’ approved goods were not in the same class as the accused infringing goods, Tesla claimed that the Cited Marks reached well-known status and requested cross-class protection. In determining whether Tesla’s Cited Marks reached well-known status, the first instance court took a comprehensive consideration of factors such as the continuous use time, publicity, market reputation and popularity of Tesla’s Cited Marks in reaching its finding that Tesla’s Cited Marks were well-known to the relevant public in China when the alleged infringement occurred and recognized the Cited Marks as well-known marks.

China F&B claimed that the mark it used on the accused infringing goods was its ”      ” mark with Reg. No 13113593 (“’593 mark”), and Tesla‘s Cited Marks had not reached well-known status before the application date of ’593 mark. The Shanghai High Court found that the ‘593 mark was registered in class 32 for beer; ginger beer; malt beer; wort for beer making; hop juice for beer making; wort (beer after fermentation); mineral water Ingredients (closed). Except for the “” logo, China F&B’s use of the alleged infringing logos were very different from its registered ’593 mark. The “” mark was actually used on soda alcoholic drinks, which did not fall into class 32. Accordingly, China F&B’s use of the accused infringing logos was not the use of its registered ’593 mark, and its grounds for appeal lack factual basis and could not be supported.

Second, whether the use of the accused infringing logos by China F&B and Guangdong China F&B constituted infringement. Here, Tesla’s trademark “” is an artistic design of the English letter T, which has strong distinctiveness. Tesla’s six Cited Marks have been widely used and enjoy a high reputation in automobile products and have formed a stable corresponding relationship through combined use. China F&B and Guangdong China F&B’s combined use of the “” logos on bottled soda liquor goods, use of “” logos on canned soda liquor goods, used of “” logo on puree (craft beer) products, used of “” logos on bottled beer products, and promoted its products using “” logos. The Chinese, English, designs and other elements of the accused infringing logos were identical or similar to Tesla’s Cited Marks “Tesla in Chinese,” “TESLA,” and “” mark in terms of font, pronunciation, and composition. The combined overall structures of the alleged infringing logos are similar to Tesla’s “” mark. At the same time, China F&B’s accused infringing products and Tesla’s automobile products overlaps in consumers. China F&B also uses the image of Tesla cars in product promotion to further strengthen the connection of alleged infringing goods and Tesla’s goods. Therefore, China F&B’s use of the accused infringing logos were enough to confuse and misunderstand the relevant public that the accused infringing products have a specific connection with Tesla, which was an improper use of the market reputation of the Tesla’s well-known marks in order to mislead the public. China F&B’s action damaged Tesla’s well-known mark rights and constituted trademark infringement.

Regarding the second issue, whether the amount of compensation in the first instance judgment was wrong. In view of the fact that Tesla’s actual loss due to the infringement and Chian F&B’s benefit obtained from the infringement are difficult to calculate, and there is no corresponding trademark license fee for reference, the first instance court comprehensively considered the popularity and reputation of the goods using the well-known marks involved in finding that China F&B had committed multiple infringements such as trademark infringement and unfair competition. China F&B’s subjective bad faith was obvious, the scale of the infringement was large, the scope of investment promotion of the accused infringing products was wide, the product profit rate was relatively high, and the enforcement fee paid Telas for this case. Considering the above, it was not inappropriate to determine that China F&B and Guangdong China F&B should compensate Teslas for economic losses and reasonable expenses totaling RMB 5 million (USD689,000), which should be upheld. As for China F&B and Guangdong China F&B’s claim that its production and sales volume were small and there was no profit, the court held that its claim was inconsistent with the facts ascertained by the first instance court, and it failed to submit evidence to prove its actual profit. Therefore, its ground of appeal could not be supported.

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