Weekly China Trademark News Updates

December 13, 2022

1. The CNIPA issued the “Guidelines on Application for Registration and Use of Class 35 Trademarks” and “Guidelines on How to Avoid Conflicts with Prior Rights in Application for Registration and Use of Trademarks“

“Guidelines on Application for Registration and Use of Class 35 Trademarks” states that services in class 35 mainly include business management, operations, organization, and administration of commercial or industrial companies, as well as advertising, marketing, and promotional services. Sales of goods is not considered as a service. The main purpose of services in class 35 is to assist others in their business operations or management, in the management of others’ business activities or business functions, and to provide others with advertising services to the public through various means of communication. The most important feature of services in class 35 is that the relevant services are provided for others, rather than for the registrant’s own business needs. For example, advertising related services means providing advertisement, production and dissemination for other’s products or services, not including those for the trademark registrant itself.

“Guidelines on How to Avoid Conflicts with Prior Rights in Application for Registration and Use of Trademarks” points out that “prior rights” refer to the rights or interests that have been enjoyed and legally existed before the date of application for registration of a trademark, including rights to trademarks, copyrights, design patent rights, name rights, portrait rights, geographical indications, influential goods or service names, packaging, decoration, and other legal prior rights and interests that should be protected. The protection of prior trademark rights has been reflected in other provisions of the Trademark Law, so “prior rights” in this guideline do not include prior trademark rights.

2. Unauthorized use of the “Michelin in Chinese” Guide reputation for publicity constitutes unfair competition, Michelin was awarded RMB 1.02 million in compensation

In a recent trademark infringement and unfair competition dispute case between the appellant Zhejiang Shisanwei Catering Management Co., Ltd., (“Shisanwei”), Sanbu Beef Brisket Restaurant (“Sanbu Beef Brisket”), second defendant in the original case, and the appellee Michelin Group Corporation (“Michelin”), the Jiangsu High Court rejected Shisanwei’s appeal.

Regarding whether Shisanwei and Sanbu Beef Brisket infringed on Michelin’s right to exclusive use of the registered trademark involved in the case, the first instance court determined that Shisanwei and Sanbu Beef Brisket used the “an affordable Michelin beef brisket”, “a small brand insists on big ideals, aspires to be Michelin beef brisket” in the process of operation and publicity and other promotional terms, which is descriptive rather than identification of source of goods or services. Therefore, this method of use does not fall within the scope of protection of Michelin’s right to exclusive use of the “Michelin” trademark involved in the case, and Michelin’s allegation of trademark infringement was not supported. Michelin appealed. The focus of the second instance disputes are: 1. Whether the actions of Shisanwei constituted unfair competition; 2. Whether the amount of compensation determined in the first instance judgment was appropriate.

Regarding the first disputed issue: The Jiangsu High Court found that, first, the Anti-Unfair Competition Law’s maintenance of market competition order includes not only prohibiting operators with direct competitive relationships from gaining competitive advantages in improper ways or destroying the competitive advantages of others, but also prohibiting operators from obtaining competitive advantages through unfair means. Unfair means such as fighting for consumers and strive for more trading opportunities than other legitimate operators. Therefore, when determining whether the plaintiff has the right to sue, whether it constitutes a competitive relationship, and whether there is unfair competition, it should not be limited to whether the business scope is the same. Although the businesses are different among the parties in this case, their behaviors violated the Anti-Unfair Competition Law. Competitive rules can also be determined to have a competitive relationship. In this case, Michelin claimed that Shisanwei used improper means to gain a competitive advantage for itself by publicizing “an affordable Michelin beef brisket” in its business operations, and harmed the legitimate rights and interests of other operators. It affects consumers’ consumption decisions, and ultimately affects the evaluation criteria of “Michelin” stars, making Michelin face the danger of being belittled and causing damage to the rights and interests of Michelin. Therefore, Michelin can sue Shisanwei under unfair competition claim, which is not improper, and the first instance court supported it.

Second, when using advertisements or other methods to promote their products or services, business operators shall follow the principle of good faith and conform to generally recognized business ethics, and shall not use false or misleading publicity methods to gain unfair competitive advantages, damage the legitimate rights and interests of other operators and consumers, and disrupt social and economic order. For this reason, Article 8, Paragraph 1 of the Anti-Unfair Competition Law stipulates that operators shall not make false or misleading commercial publicity, defraud, and mislead consumers. In this case, the evidence provided by Michelin can prove that the “Michelin Guide” published and issued by it and the recommendations and ratings of “Michelin” star restaurants have a very high market popularity and influence in the catering industry. Industry operators are well aware of its authority and reputation represented by the “Michelin Guide” and Michelin food ratings. Shisanwei, however, still improperly borrow the reputation of the “Michelin Guide” and use “an affordable Michelin beef brisket” and “a small brand insists on big ideals, aspires to be Michelin beef brisket” on their official website and store signs, which can easily led consumers to have an inaccurate or incomplete misunderstanding of the beef brisket products they provide, and misunderstand that the product has the “Michelin” star quality that it did not have, or mistakenly believe that Shisanwei has been recognized by Michelin or has a cooperative relationship with Michelin. Shisanwei had also obtained corresponding benefits or competitive advantages. This behavior damages other operators and consumers, the lawful rights and interests of the public, disrupting the social and economic order of fair competition, which constitue misleading promotions, and should be determined as an act of unfair competition.

Regarding the second disputed issue: The Jiangsu High Court found that since Michelin did not provide evidence to prove the actual losses it suffered due to the infringement and the benefits that Shisanwei obtained from the infringement, the following factors should comprehensively considered: the number of franchise stores and the geographical distribution Shisanwei’s self-promotion, operating duration, nature of infringement, technology transfer fee, ancillary equipment fee of RMB78,800 (USD11,287) and annual management fee of RMB6,800 (USD975) as agreed between Shisanwei and Sanbu Beef Brisket in the “Single Store Cooperative Operation Contract” fee standards. Shisanwei did not stop the infringement after receiving the warning letter from Michelin and considered that Michelin hired lawyers to provide notarial preservation, court appearance and other legal services in order to stop the infringement in this case. It also provided relevant evidence such as lawyer service bills and notarization fee invoices that recorded the lawyer’s work content, time and expenses in detail. The first instance court did not err in ruling that Shisanwei should compensate Michelin for economic losses and reasonable rights protection expenses of RMB 1 million (USD143,239). This court affirmed. Although Shisanwei claimed that it had sent letters to all franchisees during the first instance requesting them to stop using the promotional terms with the word “Michelin”, as of March 2020, franchisees across the country have completed rectification, but Michelin provided evidence shown that some franchisees of Shisanwei were still using promotional slogans such as “a small brand insists on big ideals, aspires to be Michelin beef brisket” in their stores, so the above proposition of Shisanwei Company is not supported.

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Weekly China Trademark News Updates

December 7, 2022

1. CNIPA issued an announcement regarding trademark agencies re-registration

On December 2, 2022, the CNIPA issued an announcement regarding the re-registration of trademark agencies, aiming to ensure that trademark agencies and practitioners practice lawfully, strengthen the supervision of trademark agencies and practitioners, and standardize the order of the trademark agency industry. According to the announcement, trademark agencies that have completed the registration with the Trademark Office of the CNIPA before November 30, 2022 (inclusive) shall submit a new registration application between January 1, 2023 and February 28, 2023. The CNIPA will complete the re-registration before March 31, 2023. After trademark agencies complete the re-registration, the registration is valid for three years. Trademark agencies should file new registration applications six months before the current registration expires if trademark agencies want to continue to engage in trademark agency business.

2. CNIPA rejected or invalidated trademarks such as “World Cup in Chinese” and “LAEEB in Chinese”

As the World Cup in Qatar is ongoing, the CNIPA attaches great importance to the protection of intellectual property rights for the World Cup, and resolutely cracks down on bad faith trademark squatting. A small number of companies and individuals filed trademarks applications in bad faith for hot words and signs such as “World Cup in Chinese,” names of famous football stars, World Cup mascots “LAEEB” and “LAEEB in Chinese” for the purpose of seeking improper benefits, which violated social and public interests. The CNIPA rejected 26 trademark applications including App. no. 66999855 “World Cup in Chinese” and App. no. 63803887 “LAEEB” citing Article 10(7) of the Chinese Trademark Law, and invalidated App. no. 63767652 “LAEEBS” citing Article 44(1) of the Chinese Trademark Law.

3. Crowne Plaza Hotel won a RMB 2 million verdict in compensation for trademark infringement

Six Continents Hotel, Inc. (“Six Continents”) is the registrant of the “Crowne Plaza Hotel in Chinese (‘Huang Guan Jia Ri Jiu Dian’)” trademark, “CROWNE PLAZA” trademark and other trademarks. Six Continents and its affiliates have authorized many hotels in China to use the said trademarks. Six Continents sued Hubei Jingli Engineering General Contracting Co., Ltd. Jingli Chuyue Hotel (“Chuyue Hotel”) and Hubei Jingli Engineering General Contracting Co., Ltd. for infringement of their registered trademark rights and unfair competition. The court found that Chuyue Hotel used the words “Jin Feng Huang Guan Hotel in Chinese Golden Phoenix Crown Plaza Hotel” on the stone tablet in front of the building, parking signs, doors, front desks, stair signs, toiletries, price lists, paper towels, business cards, etc.” and used “Golden Phoenix Crown Plaza Hotel” individually at the top of the door, use the words “Jin Feng Huang Guan” individually on the stairs signs, and use the words “Jin Feng Huang Guan Hotel” on the leaflets. The said “Jin Feng Huang Guan Hotel” mark includes the prominent part “Huang Guan” of the “Crowne Plaza Hotel in Chinese (‘Huang Guan Jia Ri Jiu Dian’)” trademark. The English “Crown Plaza” of “Golden Phoenix Crown Plaza Hotel” constitute similar to the “CROWNE PLAZA” mark. Both the accused infringing logo and the cited trademarks are used on hotel services, and it is difficult for the relevant public to judge the subtle differences in the overall logo with ordinary attention, which may easily lead consumers to misidentify the source of the service or believe that there is a specific relationship between the parties, such as licensing and affiliations. it is an act of infringing on the exclusive right to use the cited trademarks. Six Continents is engaged in hotel operation and licensing business, Chuyue Hotel is engaged in hotel operation business, and the two operators form a competitive relationship. The former name of Chuyue Hotel contained the words “Golden Phoenix Crown Hotel,” and the “crown” part is enough to cause others to mistakenly believe that there is a specific connection between Chuyue Hotel and Six Continents, such as licensed use, which constitutes an act of unfair competition. The court, upon comprehensively considered factors such as the popularity of the cited trademarks, the subject bad faith of the Chuyue Hotel, and the specific use of the accused infringing logo in the operation of Chuyue Hotel in determining that the amount of economic loss is RMB2 million (USD286,400), and the court supported notarization fee of RMB17,200 (USD2,463) and attorney fee of RMB100,000 (USD14,320).

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Weekly China Trademark News Updates

November 29, 2022

1. CNIPA released the Understanding and Application of the Standards for Determining General Trademark Violations

From November 8 to November 18, the CNIPA successively released nine articles of “Understanding and Application of the Standards for Determining General Trademark Violations,” (“Understanding and Application”) which explained in detail the 35 articles of the “Standards for DeterminingGeneral Trademark Violations,” (“Standards”) and answered in a timely manner the understanding and application problems encountered during the implementation of the Standards.

In “Understanding and Application,” the CNIPA explained the Standards with 15 explanatory cases, including the former Shanghai Municipal Administration for Industry and Commerce (“AIC”)’s investigation and punishment of a company in Shanghai for unauthorized use of the name and emblem of the United Nations, the former Nanjing Municipal AIC’s investigation and dealing with a Jiangsu company’s unauthorized use of the British flag, Shanghai Songjiang District Market Supervision Administration’s investigation and handling of a Shanghai company’s bad faith trademark registration case, the “Call a Duck & Design” trademark refusal appeal case, and several counterfeit registered trademarks cases, trademark infringements, voluntary changes to registered trademarks. This is to help law enforcement officers to better understand the enforcement standards for general trademark violations.

Among them, regarding the reference basis for “departments in charge of trademark law enforcement to investigate and deal with bad faith trademark registration” stipulated in Article 33 of the “Standards,” the “Understanding and Application” pointed out: “It should be noted that, with respect to violations of illegal use of trademarks stipulated in Article 10 of the Chinese Trademark Law that may be investigated and dealt with by the department in charge of trademark law enforcement, the investigation and handling of bad faith trademark registration generally requires relevant effective decisions or rulings from the CNIPA as evidence. At the same time, the effective decision or ruling is not a sufficient element for finalizing a case, and a judgment needs to be made in light of the specific circumstances of the case.”

Understanding and Application is conducive to promoting the implementation of the “Standards,” and then realizes the purpose of the “Standards” to “strengthen trademark management, strengthen trademark law enforcement business guidance, and unify law enforcement standards.”

2. Reversing First Instance Judgment, Beijing High Court Identified “Budweiser in Chinese” as Well-Known Trademark and Provided Cross-Class Protection

Recently, the Beijing High Court recognized “Budweiser in Chinese” as a well-known mark and granted cross-class protection as the basis to invalidate the Disputed Mark “Budweiser Mooncake in Chinese.” The lower court and the CNIPA’s decisions were vacated.

The Disputed Mark was filed by a food company on February 25, 2014 and allowed on August 14, 2015. Before its fifth registration anniversary date, Budweiser filed an invalidation petition on August 4, 2020.

On July 22, 2021, the CNIPA found that the Disputed Mark did not violate either Article 13(3) of the Chinese Trademark Law or Article 32 for “damaging other’s existing prior rights,” and maintained the Disputed Mark.

Budweiser appealed to the Beijing IP Court. The court found that: first, the evidence submitted was insufficient to prove that before the Disputed Mark’s application date, the Cited Mark had been widely known in mainland China on beer related goods and reached the degree of fame required to be recognized as a well-known mark. Second, the Disputed Mark’s approved goods for mooncake were obviously different from the Cited Mark’s approved goods for beer in terms of function, use, consumer, sales channels, etc. Further considering the Disputed Mark’s owner has obtained registration of the “Budweiser in Chinese POWER & Design” mark since 1996 for goods in class 30 and coexisted with “Budweiser in Chinese” mark from 2002 to 2019 on mooncake goods, the Disputed Mark would not confuse the relevant public and did not damage Budweiser’s interests. Thus, the Disputed Mark did not violate Article 13(3) of the Chinese Trademark Law.

Regarding Article 32, the court found that Budweiser’s evidence can barely prove that there was any use of the Cited Mark on mooncake related goods prior to the Disputed Mark’s application date, thus, it cannot prove that the “Budweiser in Chinese” trade name obtained certain fame and was known to the public prior to the Disputed Mark’s application date on mooncake related good. The court did not support Budweiser’s prior trade name right claim.

Budweiser appealed to the Beijing High Court. The second instance court found that the Cited Mark had reached the degree of well-known on beer related goods before the Disputed Mark’s application date. The distinctive part of the Disputed Mark is identical with the Cited Mark which has constituted copy and imitation of a well-known mark. The Disputed Mark’s approved goods for mooncake related goods and the Cited Mark’s well-known goods beer are all daily food and beverages in daily life, consumers for both goods highly overlapped. The relevant public are likely to confuse that the source of the two marks are identical or the two are highly associated, which would mislead the relevant public and damage Budweiser’s well-known mark and interests. Although the food company provided relevant award certificates and promotional reports on its “Budweiser in Chinese” mooncake, such evidence was insufficient to prove the registration and use of the Disputed Mark would not confuse the relevant public. Thus, the Disputed Mark violated Article 13(3) of the Trademark Law and shall be invalidated.

3. “HAMPTON WATER” overcome absolute grounds and secured registration via proceedings before the Courts

HMPTN WATER LLC filed the “HAMPTON WATER” mark (“Disputed Mark”) in class 33 for wine related goods on December 26, 2019. On January 26, 2021, the CNIPA found that the “HAMPTON” in the Disputed Mark is a foreign geographical name known to the public and did not have other distinctive meanings and rejected the Disputed Mark for registration. HMPTN appealed to the Beijing IP Court.

The court found that the Disputed Mark consists of “HAMPTON” and “WATER,” and “HAMPTON” is a common last name and even when designated as a geographical name, there are many cities and towns with name of or incorporating “HAMPTON,” which means this word does not point to a single geographic place known to the public. None of the cities and towns with the name of or incorporating “HAMPTON” is more famous than the others to China’s relevant public. Thus, to China relevant public, “HAMPTON” as a last name is more distinctive than as a geographical name. When examining the Disputed Mark as a whole on wine related goods, the main meaning of the Disputed Mark is no longer based on a geographical name. The Disputed Mark would not exclude entities in other cities or towns to use “HAMPTON” as its geographical name. Considering “HAMPTON” does not indicate a single geographical place, nor does the relevant public believe that “HAMPTON” represents the relevant goods’ place of origin, the Disputed Mark is distinctive and can be distinguished as a trademark to be registered and used. The CNIPA’s decision shall be corrected.

The CNIPA appealed to the Beijing High Court. The Beijing High Court affirmed that “HAMPTON” is a common English last name. Even used as a geographical place name, there are many cities and towns around the world use “HAMPTON” or include “HAMPTON” as its name. “HAMPTON” does not indicate only one geographical place. Considering the Disputed Mark also includes “WATER,” the relevant China public are unlikely to associate the Disputed Mark with a foreign geographical place name. Thus, the Disputed Mark does not violate Article 10(2) of the 2019 Trademark Law.

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Weekly China Trademark News Updates

November 22, 2022

1. The Beijing High Court found that “Ultraman in Chinese” constituted a well-known mark and granted cross-class protection

On October 31, 2022, the Beijing High Court made a final judgement for a trademark infringement and unfair competition dispute between Shanghai Xinchuanghua Culture Development Co., Ltd. (“Xinchuanghua”) against Shenzhen Hongyun Technology Co., Ltd. (“Hongyun”) and Beijing 360° E-Commerce Co., Ltd. The court found Hongyun to be liable for trademark infringement and unfair competition.

Hongyun manufactured and sold children’s electric toothbrush labeled with “Ultraman in Chinese” mark without authorization. The infringing product was promoted and introduced as “Ultraman Collaboration,” and the cartoon image of Ultraman appeared in many places on the promotional page, and words such as Ultraman blue, white, and yellow were used in the promotion process, and a three-dimensional image of Ultraman was used on the box of the toothbrush’s brush head. Xinchuanghua claimed that Hongyun’s actions constituted trademark infringement and unfair competition.

The court found that, in addition to providing numerous evidence of the general popularity of “Ultraman in Chinese,” Xinchuanghua provided a public release license for Ultraman’s film and television works for its class 9 “Ultraman in Chinese ” trademark (animation, etc.), proofs of popular broadcasts of works on major video websites, news reports, corresponding stage plays, theme exhibitions and large amount of other evidence. Regarding its class 28 “Ultraman in Chinese” mark (toys), Xinchuanghua also provided large amount of evidence of toy sales rankings of major e-commerce websites, contracts, license fees, and invoices such as Taobao, Tmall, and JD.com. The evidence can prove that through long-term and continuous use in mainland China, the overall brand “Ultraman in Chinese” including Ultraman film and television dramas and the registered trademark involved has already established a relatively high market reputation in China, constituted a well-known mark.

The “Ultraman in Chinese” mark has a high reputation and influence in the field of animation and toys. The infringing product of children’s electric toothbrush and animation products are mostly targeted at children, and the two have a high degree of overlap in terms of sales targets and sales channels, which can easily mislead the relevant public into thinking that the above-mentioned products come from the same entity or an entity that has a specific association. Therefore, Hongyun’s sale of children’s electric toothbrushes violated Xinchuanghua’s exclusive right to use the registered trademark.

Hongyun’s uses of the “Q version Ultraman” image on the product page and on the product’s physical outer packaging bag and uses of the word “Ultraman in Chinese” in the promotional introduction was enough to make relevant consumers mistakenly believe that it was producing and selling the electric toothbrush authorized by Yuangu or Xinchuanghua or their product was an official product of “Ultraman.” Therefore, Hongyun’s actions have the intention of taking an advantage of the goodwill of “Ultraman,” which constitutes unfair competition.

2. The Beijing High Court recognized the “PUMA” mark as a well-known mark and granted cross-class protection

On October 31, 2022, the Beijing High Court made a final judgment on an administrative dispute over an invalidation action, affirming that the “PUMA” mark constituted a well-known mark and granted cross-class protection.

Puma Europe (“Puma”) is the registrant of the trademarks “PUMA” and “PUMA and Design” (“Cited Marks”), which are approved to be used in class 25 for “sports clothes; sports pants; sports shoes; etc.” Beijing Sweet Puma Network Technology Co., Ltd. (“Sweet Puma”) applied for the registration of the “sweet puma” mark (“Disputed Mark”) on February 1, 2016 and was approved for registration in class 43 for “cafes; fast food restaurants; bar services; etc.” Puma filed an invalidation against the above trademark.

On October 16, 2019, the CNIPA found that the Disputed Mark and the Cited Marks did not constitute similar marks according to Article 30 of the 2013 China Trademark Law. Puma’s evidence could prove that prior to the Disputed Mark’s application date, the “PUMA” mark had obtained certain fame, however, the Disputed Mark was approved for lodging related services, which was obviously different from the Cited Marks’ approved use for clothing and sportwear related goods in terms of function, use, service channels. The relevant public paying general attention would not mistake services labeling the Disputed Mark to be originated from Puma, nor will they believe there were special association between the two registrants. The Disputed Mark’s validity was maintained.

Puma appealed to the Beijing IP Court, but the court affirmed the CNIPA’s decision. Puma then appealed to the Beijing High Court.

The Beijing High Court found that, in the evidence submitted by Puma, Cited Mark 1 has been used in China for over 40 years and has been extensively sold and promoted for “sports clothing, sports shorts, and sneakers,” which obtained extremely high market fame. Thus, before the Disputed Mark’s application date, the relevant public is familiar with Cited Mark 1 on “sports clothing, sports shorts, and sneakers,” which reached well-known status.

In this case, the Disputed Mark completely included the Cited Marks. These marks were similar in terms of word composition, pronunciation, and overall appearances. Despite the Disputed Mark included other English word, the overall appearances did not distinguish itself from the distinctive part of the Cited Mark 1. Thus, the Disputed Mark imitated the Cited Mark 1. The Disputed Mark’s approved use for “cafes; fast food restaurants; bar services; etc.” did not fall into the same class of goods as “sports clothing, sports shorts, and sneakers” for the Cited Mark 1. However, the garget consumer, sales channel, and place of use for the Cited Mark 1’s approved goods could have certain association with “cafes and bar services.” Thus, the relevant public for both marks overlapped. Consider the Cited Mark 1 had extremely high fame, the co-existence of both marks on the market would easily cause the relevant public to believe there are associations between the Cited Mark 1 and the Disputed Mark, which would cause misunderstandings amount the relevant public and damages Puma’s interests. Thus, the Disputed Mark violated Article 13(2) of the 2013 China Trademark Law.

3. The CNIPA and the State Administration for Market Regulation launched a special campaign to rectify trademark agency industry

In recent years, phenomena such as soliciting business by improper means and applying for trademarks in bad faith by intellectual property service agencies have occurred from time to time, causing adverse social impacts. The CNIPA and the State Administration for Market Regulation have decided to jointly launch a special rectification campaign for trademark agency industry from November to December 2022.

Intellectual property management departments and market supervision departments in various places collect and search for illegal clues such as forged application materials and legal documents, soliciting business by improper means, falsely claiming to have internal relations, squatting on behalf of agents, and hoarding of trademarks. Local market supervision departments must strictly investigate and deal with illegal acts of trademark agency in accordance with relevant regulations such as the Trademark Law, the Regulations for the Implementation of the Trademark Law, and the Regulations on Regulating Trademark Application for Registration. For those engaged in trademark agency business through the Internet, focus on checking whether they have maliciously squeezed out competitors, provided services at prices below cost, and displayed trademarks with major adverse effects through the Internet.

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Weekly China Trademark News Updates

November 15, 2022

1. The Beijing IP Court held press conference on separation of complex and simple trademark administrative cases

On November 6, 2014, the Beijing IP Court was officially named as the first specialized court to strengthen judicial protection of intellectual property rights and a pilot court for judicial reform. The Beijing IP Court now has the exclusive jurisdiction over administrative trademark authorization and confirmation cases.

The number of trademark administrative cases accepted by the Beijing IP Court has soared from more than 5,500 in 2015 to more than 18,000 in 2021, accounting for more than 60% of the total number of cases received by the court, with an average annual growth rate of about 25%. Disputes over review of trademark rejections, invalidations, revocations, and non-registrations are the most common causes of action. Among them, 10,773 administrative trademark rejection cases were docketed in 2021, with an average annual increase of 29.4% from 2015.

In May 2021, the Supreme People’s Court issued the “Opinions on Promoting the Reform of Dividing Complex and Simple Administrative Proceedings.” In order to further implement the relevant provisions of the “Opinions,” the Beijing IP Court has promptly formulated the “Beijing IP Court’s Implementation Plan for Promoting the Reform of Administrative Litigation Proceedings for Separation of Complex and Simple Proceedings (Trial),” and will start pilot work on the separation of complex and simple administrative trademark authorization and confirmation cases starting from August 2021.

On November 8, the Beijing IP Court held a press conference on the separation of complicated and simple administrative trademark litigation, announcing

the status of the separation of complicated and simple administrative trademark disputes, specific measures taken, and typical cases.

Relying on high-speed operation of fast trial mechanism, the maximum number of cases closed by the Beijing IP Court’s fast trial team has exceeded 1,000 in 2020, and by 2021, that maximum number has exceeded 1,100.

For the cases that have been assigned to the simple proceeding, the fast trial team will specially hear the case. If the parties do not agree to use the simple proceeding, but the facts are clear, the relationship between rights and obligations is clear, and the disputes are not serious, such case will be tried as a simple case because it shall be tried quickly in accordance with the law. If, after reviewing the documents, investigating, and inquiring the parties, the court found that plaintiff’s lawsuit does not meet the statutory requirements for prosecution, it may make a direct ruling to dismiss the lawsuit. If evidence has been exchanged in the preparation stage before the trial, it will not be repeated during the trial. The facts of the case can be used as the basis for determining the facts of the case after being confirmed by all parties during court investigation. Trial records and judgments can be prepared based on the major factors of a case.

At the same time, the Beijing IP Court has tried two major proceedings, namely the “withdrawal and reassessment” proceeding and the pre-litigation settlement proceeding.

In addition, the Beijing IP Court actively promotes in-depth application of various information technology methods in all aspects of judicial trials, including electronic service, automatic generation of judgment documents, and electronic registration of the entire trademark administrative proceedings.

2. Introduction to typical cases of diversified solutions in Beijing IP Court

The Beijing IP Court has resolved more than 170 cases before trial since exploring multiple dispute resolution mechanism for administrative trademark cases in May 2022. We have selected a few typical cases for reference as follows.

Case 1: A domestic leading communication company sued the CNIPA for an administrative trademark rejection appeal dispute

Basic facts: the CNIPA found that the disputed mark and the cited mark constituted similar trademarks used on identical or similar services that violated Article 30 of the Chinese Trademark Law and rejected the disputed mark’s application for registration. Plaintiff appealed the CNIPA’s decision before the Beijing IP Court. During the pre-litigation resolution period, the cited mark in this case was revoked based on three-year non-use cancellation. After the court organized both parties to negotiate, both parties agreed to apply the withdrawal and reassessment proceeding. Plaintiff applied to the court in writing to withdraw the complaint and evidence submitted. The court granted approval after review and sent a notice of end of the pre-litigation mediation phase to both parties, and the CNIPA will make a new administrative decision based on the new facts after receiving the mediation decision.

Typical significance: This case is a typical case applying the withdrawal and reassessment proceeding. The reason for applying this proceeding is that the prior rights obstacle has been revoked and announced. This is one of the most common situations in administrative trademark cases, which is representative and typical.

Case 2: A domestic testing company sued the CNIPA for an administrative trademark rejection appeal dispute

Basic facts: the CNIPA found that the disputed mark and the cited mark 1 (subclasses 4209, 4220), cited mark 2 (subclass 4217), cited mark 3 (subclasses 4128 and 4227) and cited mark 4(subclass 4213) constituted similar marks used on identical or similar services that violated Article 30 of the Chinese Trademark Law and rejected the disputed mark’s application for registration in subclasses 4209, 4212, 4213, 4217, and 4218. Plaintiff appealed the CNIPA’s decision before the Beijing IP Court. During the pre-litigation resolution period, the registration of the cited mark 1 in subclass 4209  was revoked due to three-year non-use cancellation and a revocation announcement was published, which no longer constitutes an obstacle to the prior rights of the disputed mark registered in subclasses 4209 and 42.  The cited mark 2 was invalid because it was not renewed after the expiration date, and it no longer constitutes an obstacle to the prior right of the disputed mark to be registered in subclass 4217. After the court organized the parties to negotiate, plaintiff agreed to apply the withdrawal and reassessment proceeding, and while expressly abandoning the application for registration of the disputed mark in subclasses 4213 and 4218, and voluntarily promised not to file an administrative lawsuit against the CNIPA’s decision. In this case, the CNIPA also replied in writing to agree to the pre-litigation settlement. After plaintiff applied to the court to withdraw the complaint and evidence submitted, the court approved it after review and sent a notice of the end of the pre-trial mediation to both parties, and the CNIPA would make a new administrative decision based on the new facts.

 Typical significance: This case is a typical case in which the withdrawal and reassessment proceeding is applicable when plaintiff, after consideration, clearly stated that it would give up the application for registration of the disputed mark in some non-core services, and voluntarily made a written commitment not to file an administrative lawsuit against the CNIPA’s decision. The CNIPA also agreed to apply the withdrawal reassessment proceeding. The application of the withdrawal and reassessment proceeding in such cases provides a new idea for the further expansion of the scope of application of the mechanism.

Case 3: A foreign company sued the CNIPA for an administrative trademark rejection appeal dispute

Basic facts: the CNIPA found that the disputed mark and the cited mark 1 and cited mark 2 constituted similar marks used on identical or similar goods that violated Article 30 of the Chinese Trademark Law and rejected the disputed mark’s application for registration. Plaintiff appealed the CNIPA’s decision before the Beijing IP Court. After the CNIPA made its decision, all cited marks were revoked due to three-year non-use cancellation, and a revocation announcement was published. During the pre-litigation resolution, after the court organized the parties to negotiate, both parties preliminarily agreed to apply the withdrawal and reassessment proceeding. However, before the expiration of the pre-litigation resolution period, the court had not received the CNIPA’s consent letter for pre-litigation resolution, and the court docketed the case first. After the case was docketed, the court continued to organize both parties to resolve the case and subsequently received a letter of consent from the CNIPA to resolve the case, the court then approved plaintiff’s application for withdrawal. The CNIPA had made a new administrative decision based on the new facts.

Typical significance: This case is a typical case in which the withdrawal and reassessment procedure is applicable. In order to avoid long-term unresolved cases, the Beijing IP Court has set a pre-litigation resolution period for administrative trademark cases with reference to the relevant provisions on pre-litigation resolution of civil disputes. For cases where the status of the cited mark has not been affirmed within the pre-litigation resolution period, or new evidence has emerged, but the period is expiring and it is impossible to apply to the court for the application of the withdrawal and reassessment procedure in time, the court will docket the case in a timely manner. Once the case is docketed, the court can continue organizing the settlement before trial. For cases that meet the applicable standards of the withdrawal and reassessment proceeding, the parties can still apply for the proceeding during the litigation. This case is one of the typical situations in which the pre-litigation resolution has been transformed into a continuing resolution during the litigation.

Case 4: A daily necessities company in Guangzhou sued the CNIPA and a third party, a daily necessities company in Yiwu, in an administrative trademark rejection appeal dispute

Basic facts: In this series of cases, plaintiff sued a third party who registered the disputed mark in violation of Article 15, Article 19, paragraph 4, Article 32, and Article 44(1) of the Chinese Trademark Law and requested the disputed mark to be invalidated. After examination, the CNIPA found that the disputed mark violated Article 44(1) of the Trademark Law and invalidated the disputed mark. Plaintiff appealed the CNIPA’s decision before the Beijing IP Court, claiming that the disputed mark also violated Article 15 and Article 19(4) of the Trademark Law, and requested the court to revoke the sued decision and order the CNIPA to make a new decision. In the pre-litigation resolution stage, the court appointed a mediator from the People’s Mediation Committee for Intellectual Property Disputes of China Trademark Association to organize all parties to communicate and coordinate. Plaintiff clearly expressed his approval of the conclusion of the sued decision, voluntarily applied for the withdrawal of the documents filed in this series of cases, and no longer wish to docket the case. The court subsequently approved plaintiff’s withdrawal.

Typical significance: This series of cases are typical cases applying the pre-litigation resolution proceeding. They are among the first batch of trademark administrative cases that involved a third party and are successfully resolved before trial by court invited mediators. The scope of organizing resolution before trial, resolution ideas, resolution methods, and other aspects have certain exemplary significance.

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Weekly China Trademark News Updates

November 10, 2022

1. RMB 50 million! Largest trademark infringement damages awarded to a foreign company in China

Recently, the Jiangsu High Court ruled in favor of raumplus Besitz-und Entwicklungs GmbH & Co. KG (“raumplus Besitz”), raumplus GmbH (“raumplus”), Delu (Taicang) Furniture Technology Co., Ltd. (“Delu Taicang”) against Delu Furniture (Shanghai) Co., Ltd. (“Delu Shanghai”), Delu Furniture (Nantong) Co., Ltd. (“Delu Nantong”), and Peijun ZHU in the final judgment on trademark infringement and unfair competition disputes. The judgment found that the defendants constituted trademark infringement and unfair competition and ordered to compensate the plaintiffs for economic losses of RMB50 million (USD6.9 million).

raumplus GmbH & Co. KG, the predecessor of raumplus Besitz, is a German company specializing in the field of sliding doors and customized system cabinets who entered the China market in 2009. raumplus, formerly known as raumplus International GmbH, is mainly engaged in decorative elements of residential interior design, especially living room partitions, room partitions, cabinets, sliding doors and other related products. raumplus Besitz owns the “Delu in Chinese” mark, the “raumplus” mark, and the “Delu” mark in class 20 for “furniture” related goods. Plaintiffs claimed that Defendants’ use of the marks “Delu in Chinese” and “raumplus” in the promotional materials constituted trademark infringement. Defendants Delu Shanghai and Delu Nantong used “Delu in Chinese” as their corporate name and “Lei Di Ni in Chinese (LEDINT)” as a high-end customized brand of Delu for publicity. Delu Nantong registered and used “Delu.com” domain name, which constitutes unfair competition.

Cited Marks

The court found that with regard to trademark infringement, the customized furniture produced and sold by Delu Shanghai and Delu Nantong was the same as the furniture and other products approved by the Cited Marks. At the same time, Delu Shanghai and Delu Nantong use the “Delu in Chinese” trademark in furniture invoices, brochures, design drawings, WeChat public accounts, store decoration, store fronts, exhibition halls, bidding documents, etc, and use the “TaumpIus” logo in the furniture invoice and external publicity. These logos are the same as those of raumplus Besitz. Accordingly, the defendants constituted trademark infringement. Regarding unfair competition: (1) Delu Shanghai and Delu Nantong continued to use “Delu in Chinese” as the corporate name after raumplus and Shanghai Lei Di Ni Company, an outsider, ended the joint venture, misleading the public and constituting Unfair competition; (2) Delu Shanghai and Delu Nantong publicized “Lei Di Ni in Chinese (LEDINT) as a high-end customized brand under Delu,” which is an unfair competition act of false publicity; (3) Delu Nanton’s registration and use of the “Delu.com” domain name is an act of unfair competition. The court also found that the acts of the defendants Delu Shanghai and Delu Nantong were malicious infringement and the circumstances were serious, and punitive damages were applicable.

2. Novartis AG successfully invalidated the “Nuo Hua Lv in Chinese” mark using the “Nuo Hua in Chinese” mark that was recognized as a well-known mark by the courts

Recently, the Beijing High Court made a judgement against CNIPA and the third-party Hangzhou Runrong Business Consulting Co., Ltd. (“Runrong”) in favor of  Novartis AG in a trademark invalidation dispute. The court found that Novartis’ “Novartis” mark (Cited Mark) constituted a well-known mark in “pharmaceutical preparation” goods.

Cited Mark

The CNIPA previously found that the evidence submitted by Novartis was not enough to prove that its Cited Mark  had been known to the relevant public before the application date of the Disputed Mark. The registration of the Disputed Mark would not mislead the public and thus damage the interests of Novartis. The Disputed Mark did not violate Article 13(3) of the 2013 China Trademark Law and the Disputed Mark shall be maintained.

The first instance court found that the audit report, market share ranking, distribution agreement and invoice, advertising contract, national library search report and other evidence submitted by Novartis can prove that Novartis is a well-known company in the field of medicine. Its affiliated companies have a high market share of products, a wide range of sales areas, and relatively high sales. Various newspapers and magazines have a lot of reports on Novartis and its products. Therefore, the evidence submitted by Novartis is sufficient to prove that, prior to the application date of the Disputed Mark, the Cited Mark, through extensive and long-term publicity and use by Novartis, has a very high reputation and influence on goods such as “pharmaceutical preparations,” and it is generally familiar and well known to the relevant public, which constitutes a well-known mark on goods such as “pharmaceutical preparations.” The Disputed Mark “Nuo Hua Lv in Chinese” completely includes the Cited Mark, which constituted an imitation. Goods such as “pharmaceutical preparations” approved for use for the Cited Mark are closely related to daily life and a wide range of consumer groups. Although the goods such as “cosmetics, shampoo” and “pharmaceutical preparations” are approved by the Disputed Mark and the Cited Mark belong to different classes in the CNIPA Classifications, their sales channels and consumer groups overlapped, and they have certain relevance. Medicinal cosmetics, medicinal shampoo and other products are also common in the market. Under the circumstance that Novartis’ Cited Mark  is relatively famous, the application for registration of the Disputed Mark will easily misled the relevant public into believing that the Disputed Mark has a considerable degree of connection with Novartis’ well-known trademark, thereby misleading the public, harming the interests of Novartis, and violating the Article 13(3) of the 2013 China Trademark Law. The second instance court upheld that the first instance decision.

3. The Regulations on the Supervision and Administration of Trademark Agency was recently released

The Regulations on the Supervision and Administration of Trademark Agency (“Regulations”) was recently released, which is an effective means to further improve the intellectual property agency management system and improve the level of regulatory standardization. The “Regulations” will come into force on December 1, 2022.

The Regulations focus on the prominent problems of the current trademark agency industry, such as the low entry threshold, too many entities, non-standard operation and management, and uneven service levels. The Regulations aim to improve the overall service quality and development level of the industry at the source, establish and improve the registration system for trademark agencies. Clearing up agencies that do not carry out business for a long time and occupy industry resources by improving the agency registration procedures. Promote the formation of a healthy development pattern for the industry. At the same time, in order to facilitate the registration process of the agency, it is stipulated that the information that can be obtained through the government information sharing platform shall not be required to be repeatedly provided by the trademark agency.

The Regulations further standardize the behavior of trademark agency, stipulate the basic principles of engaging in trademark agency business, the obligations to be performed and the publicity of the basic matters of the agency, require trademark agencies to establish and improve the business management system and file system, strengthen the professional ethics of practitioners and professional discipline education.

The Regulations improve the legal liability of trademark agencies for illegal acts and strengthen legal deterrence. Combined with practice, the China Trademark Law and its implementing regulations listed the illegal acts of trademark agency in detail to enhance the operability. Clarify the illegal circumstances of engaging in trademark agency business through the Internet. At the same time, it stipulates the supervision responsibility of the intellectual property management department and the disciplinary requirements and accountability for those who are engaged in trademark registration and management.

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Weekly China Trademark News Updates

November 2, 2022

1. The CNIPA intends to add provisions on trademark revocation ex officio

Recently, the CNIPA issued a letter of reply to the Recommendation No. 2505 of the Fifth Session of the Thirteenth National People’s Congress. The letter mentioned that the CNIPA should continue to strengthen the obligation to use trademarks, make up for its shortcomings on the basis of adhering to the existing registration system, and focus on solving the problem of “emphasizing registration and neglecting use.” The first is to improve the concept of trademark use and highlight the basic status of use. Second, on the basis of retaining the original withdrawal system, study the feasibility of introducing the system of trademark use commitment and active submission of usage descriptions during its validity period. Third, it is proposed to add regulations on trademarks revocation ex officio. If the trademark registrant fails to fulfill the promise of use, fails to submit a description of the use situation according to law, or improperly exercises the exclusive right to use the trademark, the registered trademark can be revoked ex officio.

2. Coexistence agreement can be used as an important basis for determining trademark similarity

The Beijing High Court recently affirmed the lower court decision against Appellant CNIPA and for appellee Bond High Performance 3D Technology B.V. (“Bond”) in an administrative trademark rejection review dispute.

The focus of the dispute in this case is whether the application for the Disputed Mark violates Article 31 of the Chinese Trademark Law. The Beijing High Court held that whether the Disputed Mark and the Cited Mark constitute similar trademarks, and whether the coexistence of the two will cause confusion and misunderstanding to the relevant public, the registrant of the Cited Mark, as a direct interested party, is more concerned than other relevant public. Therefore, when determining whether the coexistence of the Disputed Mark and the Cited Mark on similar goods or services will cause confusion and misunderstanding to the relevant public, the trademark coexistence agreement reached between the Cited Mark’s registrant and the Disputed Mark’s applicant should be considered. On the one hand, in the case of differences between the Disputed Mark and the Cited Mark, the trademark coexistence agreement can be used as a reference factor to eliminate the possibility of confusion. On the other hand, a trademark’s private right should also be considered, that is, a trademark coexistence agreement reflect the transfer and handling of part of the exclusive right owned by the Cited Mark’s registrant. According to the principle of autonomy of will, a trademark registrant should be allowed to freely dispose of its trademark exclusive right.

In this case, the Disputed Mark’s designated goods and the Cited Mark’s approved goods all falls into subclasses 0726 and 0753 part (3), which constitute similar goods in terms of function, production departments, sales channels, and consumers.

The Disputed Mark is a word mark composed of “BOND.” The Cited Mark is a design and work combination mark composed of “BONDTECH” and a design. Although the Disputed Mark “BOND” and the text part “BONDTECH” of the Cited Mark both contain “BOND”, the Cited Mark also contains the text “TECH” and the design part, and there are certain differences between the two in terms of composition elements, text composition, and overall appearance. The trademark coexistence agreement submitted by Bond was issued by the owner of the Cited Mark. If it does not violate laws and administrative regulations, and there is no evidence to show that the coexistence of the Disputed Mark and the Cited Mark could damage the rights and interests of the relevant public, it should be considered as strong evidence to exclude the possibility of confusion. The trademark coexistence agreement determines that the coexistence of the Disputed Mark and the Cited Mark on the same or similar goods is unlikely to cause confusion among the relevant public. Therefore, the Disputed Mark and the Cited Mark do not constitute similar trademarks used on identical or similar goods, and the application for the Disputed Mark does not violate Article 31 of the Chinese Trademark Law. The lower court’s judgment was correct, and the relevant grounds for the appeal submitted by the CNIPA could not be established and should not be supported.

3. The “Oxford University Press in Chinese” mark is not allowed to be registered as a trademark for lack of distinctiveness

The Beijing High Court recently concluded a review of a trademark rejection appeal case to vacate the first instance decision and reject the petition filed by Oxford University Press.

The focus of the dispute in this case was whether the trademark “Oxford University Press” violates Article 11(1)(3) of the Chinese Trademark Law. The first instance judgment found that the Disputed Mark was composed of “Oxford University Press” in Chinese, and that Oxford University Press’s application for registration of the word “Oxford University Press” was in line with commercial practices and customs. The Disputed Mark was distinctive, which can play a role in distinguishing the source of goods and should be registered. Therefore, the first instance judgment revoked the accused decision made by the CNIPA.

The CNIPA refused to accept the first instance judgment and appealed to the Beijing High Court. The Beijing High Court held that the Disputed Mark was consistent with the Chinese enterprise name of Oxford University Press, and was used on the re-examined goods, and the relevant public could easily identify it as a business name, but not as a trademark. The Disputed Mark lacked distinctive features, and its registration violated Article 11(i)(3) of the Chinese Trademark Law. The first instance court erred in applying the law and the CNIPA’s grounds for appeal should be supported.

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Weekly China Trademark News Updates

October 26, 2022

1. Nestlé’s “Nestle in Chinese” mark prevailed in a second instance trial against the “Magpie Nest in Chinese” mark based on similarity

Disputed Mark	Cited Mark

Wuhan Magpie Nest Network Information Group Co., Ltd. (“Magpie Nest”) submitted a trademark application for “Magpie Nest in Chinese” (“Disputed Mark”) with application no. 27615487 on November 21, 2017. The Disputed Mark was approved on February 7, 2020. Nestlé Products Co., Ltd. (“Nestlé”) filed an invalidation against the Disputed Mark based on its prior mark “Nestlé in Chinese (“Cited Mark”). The CNIPA found that the Disputed Mark and Nestlé’s prior mark constituted similar trademarks according to Article 30 of the Trademark Law for identical or similar services. The CNIPA invalidated the Disputed Mark. Magpie Nest appealed to the Beijing Intellectual Property Court. The court found the Chinese characters in the Disputed Mark and the Cited Mark have identical pronunciations. However, the first two characters of the Disputed Mark is a fixed expression with a fixed meaning, which means lucky birds in China, which allow the Disputed Mark to have a different meaning than the Cited Mark. The relevant public can distinguish the Disputed Mark and the Cited Mark in terms of text composition, recognition, and overall appearances. The coexistence of the Disputed Mark and the Cited Mark on services such as “advertising” in class 35 is unlikely to confuse or misunderstand the public regarding the source of the service. The court ruled that the Disputed Mark and the Cited Mark did not constitute similar marks used on identical or similar services under Article 30 of the 2013 Trademark Law. Even when considering that the popularity of the Cited Mark is extended by its goodwill on coffee products, the relevant public can distinguish the Cited Mark and they would not easily be confused and misunderstood. In sum, the Beijing Intellectual Property Court revoked the invalidation decision made by the CNIPA. Both Nestlé and the CNIPA appealed the first instance court decision to the Beijing High Court.

The Beijing High Court held that both the Disputed Mark and the Cited Mark includes the word “nest in Chinese,” and “magpie in Chinese” and “sparrow in Chinese” have identical pronunciation. The Disputed Mark is similar to the Cited Mark in terms of text composition, pronunciation, meaning, overall appearance, etc. If they are used together for identical or similar services, the relevant public may easily think that the services using the above trademarks are derived from the same entity or that there is a specific connection between the service providers, resulting in confusion and misidentification. Therefore, the Disputed Mark and the Cited Mark constituted similar marks used on identical or similar services on all services approved for use. The Disputed Mark violated Article 30 of the 2019 Trademark Law and should be invalidated.

2. Bad faith complaints constitute unfair competition

Harbin Shangsheng Economic and Trade Co., Ltd. (“Shangsheng”) is the registrant and applicant of the mark “TELARGRA” with reg. nos. 31213861, 40286994 and 40301830. Yao Ming is the sole shareholder and legal representative of Shangsheng. Shangsheng filed 10 complaints against the “Telake Flagship Store” opened by Telake Foods Co., Ltd. (“Telake”) on the JD.com complaint platform based on its trademark registrations and copyrighted works. Xiao Niu John Foods Co., Ltd. (“Xiao Niu John “) and Telake appealed to the court on the grounds that Yao Ming and Shangsheng’s actions constituted unfair competition. The Beijing High Court found that based on the facts that have been identified in this case, the prior effective administrative judgment made by this court has determined that the “TELARGRA” marks was an unregistered mark owned by Xiao Niu John and Telake on raw beef related goods. Yao Ming, the legal representative of Shangsheng, once worked at Xiao Niu John, who knew the prior used “TELARGRA” mark by Xiao Niu John and Telake. Shangsheng’s registration of the “TELARGRA” mark on tripe products violated Article 15, paragraph 2 of the 2014 Trademark Law. At the same time, the evidence in the case can confirm that Shangsheng knew that Xiao Niu John and Telake had prior rights to the logos such as “TELARGRA” and used them on raw beef goods. However, Shangsheng still took advantage of the lack of trademark knowledge of Xiao Niu John and Telake and applied for the registration of the TELARGRA mark and registered TELARGRA as a copyrighted work. Shangsheng then used this as the basis of rights to file a complaint against the raw beef products sold by Telake on JD.com, which showed that its subjective bad faith was obvious. Objectively speaking, the alleged complaint of Shangsheng resulted in the removal of Telake’s product, which not only directly affected the operating income of Telake, but also interfered with the prior rights of “TELARGRA” and other logos. Such acts also damaged the normal business activities and legitimate rights of Xiao Niu John and Telake, which was obviously inappropriate. Therefore, the above-mentioned acts of Shangsheng violated the basic principles of good faith and business ethics, disrupted the normal market competition order, and damaged the legitimate rights and interests of other business operators, which constituted an act of unfair competition regulated by Article 2 of the Anti-Unfair Competition Law.

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Weekly China Trademark News Updates

October 18, 2022

1. The CNIPA held a symposium on trademark business work

Recently, the Trademark Office of the CNIPA held a symposium on trademark business work to listen to opinions and suggestions of representatives of companies, agencies, and industry associations on trademark business work.

Delegates at the symposium recognized the reform efforts and achievements made by the Trademark Office to improve the quality and efficiency of trademark examination in recent years, and provided suggestions and advice with respect to strengthening the management of “examiner and agency collusion” and information leakage, regulating trademark applications with serious unhealthy effects, cracking down on bad faith trademark squatting and hoarding, further promoting the quality and efficiency of trademark examination and review, and building a first-class trademark examination and review agency.

It is particularly noteworthy that the symposium decided that the CNIPA will immediately set up a special platform on the China Trademark Website to accept complaints and leads, open on-site consultation windows in the trademark registration hall, promptly introduce a special system to deal with bad faith three-year non-use cancellations, and propose to incorporate cracking down on bad faith same-day applications into the next regulation creation project.

We have noticed that when visiting the China Trademark Website now, there is a floating window on the homepage showing “Entrance to Report Leads of Trademark Information Leakage Issues.”

2. Adidas nearly lost the Adidas trademarks. The relevant agency was assessed with administrative penalties.

On the first day after the National Day holiday, the Beijing Xicheng Supervision Bureau issued administrative penalties for illegal agency of two trademark assignments, which involved several main trademarks of Adidas of Germany.

In November 2020, an agency company successively filed for address change, trademark assignment, license recordal, and reissuing registration certificate for multiple trademarks in the name of Adidas AG, including No. 169865 “,” No. 3336263 “,” No. 3921767 “,” and No. 13770600 “.”

In December 2020, the CNIPA received a statement from Adidas, saying that the assignee, a Hong Kong company in the aforementioned assignment applications, had not obtained its authorization, and it had never authorized the agency company to handle trademark matters in its name. Accordingly, all said operations of this agency were not approved by the CNIPA.

The Beijing Municipal Intellectual Property Office reported the violations of this trademark agency to the Beijing Municipal Supervision Bureau. The Municipal Supervision Bureau held that: the agency did not obtain the authorization of the trademark holder and did not fulfill its responsibilities of reviewing in handling the assignments and other related trademark matters. It violated Article 19, Paragraph 3 of the Chinese Trademark Law “If a trademark agency knows or should know that the trademark applied for by the client falls under the circumstances specified in Articles 4, 15 and 32 of this Law, it shall not accept the entrustment.”  According to Article 68(1)(3) of the Chinese Trademark Law, the trademark agency is ordered to correct the above-mentioned illegal acts, and has been given a warning and a fine.

3. Tommy Hilfger continues its wins over Tommycrown

A Chinese company registered the mark “” in class 25 in relation to clothing, sport shoes, gloves, etc. in May 2015, and applied to assign the mark to Tommy Crown (U.K.) International Fashion Co., Ltd in June 2018.

Before the approval of the assignment in November 2018, Tommy Hilfiger Licensing B.V., the owner of registered marks “,” “,” “,” “,” “,” “ ,” filed an invalidation against this mark in September 2018.

The CNIPA made the decision in April 2019, ruling to invalidate the Disputed Mark as it has constituted a similar mark used on the same or similar goods with Tommy Hilfiger’s Cited Marks.

Tommy Crown filed a court appeal before Beijing IP Court, which affirmed mark similarity and the fame of Tommy Hilfiger’s Cited Marks, thereby rejecting the claims of Tommy Crown.

Tommy Crown appealed against the first-instance verdict. The Beijing High Court recently rendered the second-instance judgment finding that:

The Disputed Mark consists of the letters “Tommycrown.” Both the Disputed Mark and the Cited Mark 1 to 10, which contain the letters “TOMMY,” are similar in letter composition and pronunciation. At the same time, the evidence in the case can prove that Tommy Hilfiger’s trademark “TOMMY HILFGER” had a certain reputation in clothing products before the application for registration of the Disputed Mark. Under such circumstance, Tommy Crown still filed for the Disputed Mark with a relatively high degree of similarity and failed to avoid a trademark of others that has achieved a certain reputation. It is difficult to call it goodwill. In view of this, if the Disputed Mark coexists with the Cited Marks, the relevant public, when paying general attention, is likely to believe that the goods using the Disputed Mark originate from the same entity or that there are specific associations between the goods providers, which would cause confusion and misidentification. Therefore, the original judgment and the CNIPA decision are correct to determine that the Disputed Mark and the Cited Marks constituted similar marks used on identical or similar goods, and this court affirms.

Tommy Crown claimed that the CNIPA decision did not comment on its request for suspension of review, and there were major procedural errors. In this regard, this court believes that the current laws and regulations do not require mandatorily that if the Cited Mark is pending before the people’s courts or administrative departments, the CNIPA shall wait for the judgment/decision before rendering a decision. The CNIPA has the discretion to decide whether to suspend according to each case’s circumstances. In this case, although the CNIPA did not comment on the request for suspension by Tommy Crown, it did not violate any legal regulations or rules. Therefore, this court does not support Tommy Crown’s claim.

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Weekly China Trademark News Updates

October 11, 2022

1. Infringers may be held not liable for compensation if the trademark has not been actually used for three consecutive years

On September 15, 2022, the Beijing High Court rendered a trademark infringement decision in favor of Yanjing Zhihui (Beijing) International Travel Service Co., Ltd. (Yanjing Zhihui) against Beijing Yanjing International Travel Service Co., Ltd. (Beijing Yanjing). The court found that, although Beijing Yanjing conducted infringement, it shall not be held liable for compensation according to the provisions of Article 64 of the Chinese Trademark Law,.

Yanjing Zhihui has legally obtained the exclusive right to use the registered trademark of “Yanjing Tourism” for use in Class 39 for travel companionship and other services.

Beijing Yanjing operates the WeChat public account “Yanjing International Travel,” where the introduction of the official account is “wholesale service providers for outbound travel, customized travel”; and has opened a self-operated store on Fliggy’s website, the store name is “Beijing Yanjing International Travel.” Yanjing Zhihui claimed that the use of “Yanjing International Travel” by Beijing Yanjing constituted infringement.

The first instance court found that the “Yanjing International Travel” used by Beijing Yanjing and the “Yanjing Tourism” mark involved in this case constituted similar logos, and the alleged infringement and the approved use scope of the mark involved in this case constituted similar services. The behavior of Beijing Yanjing constituted infringement, and the compensation amount was determined as RMB 50,000 (USD6,965). The second instance court upheld the first instance judgment.

The retrial court found that: with regard to the evidence such as screenshots of the WeChat public account submitted by Yanjing Zhihui, it was either not within the specified period, or it was self-made evidence, or it did not submit performance evidence to support it, which could not prove the existence of use in the sense of Trademark Law. At the same time, Yanjing Zhihui did not submit evidence to prove that it suffered other losses due to the alleged infringement. Accordingly, although Beijing Yanjing has committed the alleged infringement, according to Article 64 of the Trademark Law, “the owner of the exclusive right to a registered trademark cannot prove that he has actually used the registered trademark within the previous three years, nor can he prove that he has suffered damage due to the infringement. For other losses, the accused infringer shall not be liable for compensation,” thus it shall not be liable for compensation.

2. Repeated trademark infringement by using counterfeit registered trademarks is ruled as punitive damages

The Guangzhou Intellectual Property Court recently made a second instance judgment over a trademark infringement dispute between Ulthera, Inc and Guangzhou Kopai Industrial Co., Ltd. (Kopai), and ordered Kopai to compensate Ulthera for economic loss of RMB 1 million (USD140,000).

Ulthera applied for the registration of the trademark “ULTHERA” involved in the case. Kopai is a company engaged in the production and sales of medical beauty equipment. In October 2016, it was administratively punished by the Administration of Industry and Commerce for selling an ultrasonic therapeutic device that violated the exclusive right to the above-mentioned registered trademark. On August 8, 2017, Ulthera and Kopai reached a settlement for trademark infringement, but Kopai continued to produce and sell products counterfeiting the “ULTHERA” registered trademark after that and was sentenced to constitute the crime of counterfeiting registered trademarks on September 10, 2019. Ulthera believed that Kopai had infringed on its exclusive right to use its registered trademark, so it requested to order Kopai to stop the infringement and compensate it for economic losses and reasonable expenses of RMB 1 million (USD140,000).

The court held that the accused infringing logo was similar to the registered trademark involved, and the accused infringing goods and the goods approved for use by the registered trademark involved also overlapped in consumers and service objects and constituted similar goods. The behavior of Kopai infringed the exclusive right of Ulthera’s registered trademark. On the issue of the amount of compensation, the court held that Kopai’s failure to perform the settlement agreement and ignoring the intellectual property rights of others constituted extremely serious infringement. At the same time, Kopai has repeatedly committed infringing acts and the infringing products involved were ultrasonic therapeutic apparatuses, which may endanger human health and the degree of infringement was serious. Considering the obvious subjective maliciousness and serious infringement of Kopai, the punishment should be increased. Therefore, in this case, double punitive damages shall be applied and Ulthera’s claim for damages of RMB 1 million (USD140,000) was fully supported.

3. The CNIPA held a special press conference on “The Decade of Intellectual Property”

On October 9, 2022, the CNIPA held a special press conference on “The Decade of Intellectual Property Rights” together with a regular press conference in October to announce the historic achievements and historic changes in the development of intellectual property.

From 2012 to 2021, the CNIPA has allowed a total of 35.563 million trademarks, with an average annual growth of 25.5%. As of September 2022, there were 41.523 million valid trademark registrations in China, and the average review period for trademark registration was stable at 4 months.

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