Recently, Yongyu Zhang and Kaiyuan Song, agents of BEIJING EAST IP LTD., represented Daio Paper Corporation in the case of invalidation of “packaging bag” design patent, and successfully maintained the validity of the design patent.

Weekly China Trademark News Updates

June 20, 2023

1. Lululemon won RMB 1 million in damages

The Meizhou Intermediate Court of Guangdong concluded a first-instance judgment on the trademark infringement dispute between Canada Lululemon Sports Goods Co., Ltd. (“Lululemon”) and an individual Zhang. The court ordered Zhang to immediately stop trademark infringement and compensate Lululemon for economic losses of RMB 1 million (approx. USD139,446).

The court found that Lululemon owns registered trademarks such as “,” “LULULEMON”, “Lu Lu Le Mon in Chinese,” and “ALIGN.” The said trademarks are registered and valid and shall be protected by the law.

In this case, the alleged infringing goods were identical or similar to those for which Lululemon has the exclusive right to use registered trademarks. The promotional information of the accused online shop and the logos of “Lu Lu Le Mon in Chinese,” “LULULEMON,” “,” and “ALIGN” used on the relevant goods all serve to identify the source of the goods, which constituted trademark use. The said marks used by Zhang were indistinguishable from the registered trademarks claimed by Lululemon, which constituted identical marks. Zhang’s behaviors were enough to cause confusion and mislead the relevant public, which infringed Lululemon’s trademark rights.

In this case, Lululemon claimed that the profit from infringement was much higher than the amount of RMB 1 million claimed by Lululemon, regardless of calculating based on the Zhang’s profit margin, the industry’s profit margin, the profit margin of listed companies in the same industry, or the cost price of the counterfeit goods. The court supported Lululemon’s claim for the compensation amount. The court comprehensively considered Zhang’s degree of subjective fault, infringement profits, nature of infringement, operation method, operation scale, duration, sales amount and other factors, combined with the fame of Lululemon’s registered trademarks, and the reasonable and necessary cost paid by Lululemon to stop the infringement in finding that Zhang should pay Lululemon for economic loss of RMB 1 million (apprx. USD139,446) (including reasonable expenses for stopping the infringement).

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

The Beijing High Court made a second-instance judgment on the administrative trademark invalidation dispute between Qingdao Heshanquan Natural Food Co., Ltd. (“Qingdao Heshanquan”), the CNIPA, and Qingdao Laoshan Mineral Water Co., Ltd. (“Qingdao Laoshan”). The court found that “Laoshan in Chinese” constituted a well-known mark, and the “Laoshan Peninsula in Chinese” mark shall be invalidated.

The Disputed Mark is the “Laoshan Peninsula in Chinese ” mark with reg. no. 36199582 that was approved to be used on services such as “providing online marketplaces for buyers and sellers of goods and services; displaying goods on communication media for retail purposes; franchising business management; etc.” in Class 35, the current trademark owner is Qingdao Heshanquan.

The Cited Mark is the “Laoshan in Chinese” mark with reg. no. 381702, which was applied earlier than the application date of the Disputed Mark, which is approved to be used in Class 32 for “soft drinks; mineral water; etc.” The current trademark owner is Qingdao Laoshan.

The court found that the Cited Mark has been continuously promoted and used by Qingdao Laoshan for a long time, and had become well-known in mineral water products before the application date of the Disputed Mark. The Disputed Mark contained the Cited Mark, the two marks were similar in terms of word composition, pronunciation, and meaning, and the Disputed Mark constituted a copy, imitation and translation of the Cited Mark. The services such as “buyers and sellers of goods and services provide an online market” under the Disputed Mark and the mineral water under the Cited Mark do not belong to identical or similar goods or services. However, considering that Qingdao Heshanquan and Qingdao Laoshan are located in the same area and both are food business enterprises, the registration of the Disputed Mark is likely to mislead the public, making the public think that the approved services of the Disputed Mark is provided by Qingdao Laoshan or is associated with Qingdao Laoshan, which could damage Qiangdao Laoshan’s interests. The court held that the registration of the Disputed Mark violated Article 13(3) of the 2014 Trademark Law.

3. The applicant of a trademark was canceled, and its trademark application shall not be approved for registration

The CNIPA concluded the opposition action filed by Shanghai Rongying Brand Management Co., Ltd. (“Shanghai Rongying”) against the “Hualai Shifu in Chinese” mark with app. no. 54491795 in Classes 35 and 43 applied by Tangshan Miyuan Enterprise Management Consulting Co., Ltd. (“Tangshan Miyuan”).

The CNIPA found that the opposed mark “Hualai Shifu in Chinese” was designated for use in services such as market research and business analysis in Class 35, and restaurant services in Class 43. Shanghai Rongying cited “Hualaishi in Chinese,” “Hualaishi in Chinese CNHLS & Design” and other marks that were approved in Class 35 for displayed goods on communication media, and restaurants in Class 43. The composition, pronunciation, and overall appearance between the opposed mark and the cited marks were similar and constituted as similar marks. Parts of the opposed mark’s designated services were identical with the cited marks’ approved services. The marks constituted similar marks on similar services and is likely to cause confusion to the consumers.

According to the evidence provided by Shanghai Rongying, Tangshan Miyuan was canceled on May 11, 2021, and its qualification as an entity no longer exists. There was no evidence showing that the applicant had filed an assignment for the opposed mark prior to the cancelation date of the applicant. The CNIPA would accept the applicant’s failure to file an assignment for the opposed mark if the opposed party cannot provide contrary evidence. As a civil right, trademark right should be enjoyed and exercised by a subject with civil entity qualifications. Therefore, the opposed mark should not be approved for registration if the applicant lost its entity qualification. According to Article 4, Article 30, and Article 35 of the Trademark Law, the “Hualai Shifu in Chinese” mark shall not be registered.

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

Weekly China Trademark News Updates

June 14, 2023

The Standards for Suspension of Trademark Review and Adjudication 

The CNIPA recently released the Standards for Suspension of Trademark Review and Adjudication (the “Standards”) that lists the circumstances to grant a suspension for a pending trademark review case.

The Standards states that the precondition of a suspension is the petitioner’s filing of a suspension request, except where the examiner suspends the review at his discretion based on that a cited mark is suspected of being registered in bad faith. The necessary condition to resume the review is subject to the petitioner’s submission of corresponding evidence proving that the cited mark’s status has been confirmed.

There are seven express circumstances to suspend a case and three case-by-case scenarios where suspension can be considered.

The seven circumstances are:

(1) The disputed mark or the cited mark is in the proceeding of name change of registrant or an assignment, and there will be no conflict of rights between the disputed mark and the cited mark after the name change or assignment;

(2) The cited mark has expired and is in the process of renewal or in the grace period for renewal;

(3) The cited mark is in the revocation or withdrawal proceeding;

(4) Where the cited mark has been revoked, invalidated or not renewed upon expiry, the review is within one year from the date the cited mark is published as valid or expired. If, however, the rejection is not based on the one-year isolation period under Article 50 of the Trademark Law, the case does not need to be suspended.

(5) The case involving the cited mark has been concluded and is waiting for the conclusion to become effective, or the enforcement of the effective judgment is pending for re-adjudication.

(6) The prior rights involved must be based on the results of another case that is pending in a court or the CNIPA;

(7) The status of the cited mark involved must be based on the result of another case that is pending in a court or the CNIPA, and the petitioner must explicitly file a suspension request;

Among the seven express circumstances, Circumstances (1) to (5) can be generally applied in rejection appeals, registration disapproval appeals, and invalidations. Circumstance (6) is specifically applicable to registration disapproval appeals and invalidations, while Circumstance (7) is specifically applicable to rejection appeal.

The three case-by-case scenarios that cases can be suspended are:

(8) A case can be suspended where the cited mark involved in a rejection appeal is pending in an invalidation proceeding, and the cited mark’s registrant has been identified in other cases as constituting bad faith registration under Article 4, Article 19(4), and Article 44(1) the Trademark Law. This scenario does not require the petitioner to file a suspension request. Examiners have discretion to decide whether to suspend based on the facts of the case, which will effectively reduce the right holders’ troubles of filing repeated applications and exhausting legal proceedings caused by bad faith registrations;

(9) A case can be suspended in a case-by-case scenario if it is necessary to wait for a case that shares identical facts, or a relevant case to be ruled or adjudicated. This scenario does not necessarily involve a cited mark, so a petitioner is not required to file a suspension request. However, to better coordinate administrative rights confirmation proceeding, other administrative proceedings, judicial proceedings, unify review and trial standards, avoid proceeding loopholes caused by conflicting decisions, and effectively reduce the parties’ burden, examiners have discretion to decide whether to suspend a case according to the specific circumstances of the case; and

(10) Other situations in which a case can be suspended. For cases that fall short of fully exhaust all proceedings, the principle of necessity and the benefit to the right holder shall be taken into consideration. With reference to the said scenarios, examiners have discretion to decide whether to suspend a case according to the specific circumstances of the case.

To ensure right holders’ interests, while considering efficiency, fairness, and stability of trademark registration order, a suspension request should be filed within the specified time limit. A petitioner for a rejection appeal should supplement at least within three months of the filing date of rejection appeal with a written statement stating the actions taken to remove the obstacles blocking the cited mark. The petitioner may also put forward an explicit suspension request as stated in Circumstances (7) together with the reasons for rejection appeal. The suspension request shall state the cited mark’s registration number, the proceeding it is in, and the relationship with this case, and other conditions. In principle, whoever applies for the suspension shall apply for lifting the suspension. After the cited mark’s status is confirmed, the petitioner shall submit the corresponding evidence, and the examiner shall resume the review if the examiner receives the petitioner’s supplemental evidence and confirms that the circumstances for the suspension has been eliminated.

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

Weekly China Trademark News Updates

June 7, 2023

1. Victorinox’s “Cross and Shield” marks were intentionally infringed with bad faith. The infringers were ordered to pay RMB 3 million in compensation

The Beijing Xicheng District Court recently concluded a trademark infringement lawsuit between Victorinox AG (“Victorinox”), Beijing Weishi Elite Trading Co., Ltd. (“Elite”), and Shanghai Baoshun Trading Co., Ltd. (“Baoshun”). The court ordered Elite and Baosun to immediately cease trademark infringements and compensate Victorinox economic damages of RMB2.9 million (USD407,355) and reasonable expenses of RMB100,000 (USD14,046). Baoshun appealed the first instance decision but the Beijing IP Court rejected the appeal request.

The alleged infringements in this case were: 1. The alleged infringing store sells bags and uses “victoriacross flagship” in the store name and uses “” pattern on its webpage; 2. “Weishi Cross in Chinese” was used in the name of each product; 3. The home page of each product introduction picture uses a combination of “VICTORIACROSS” and ““; 4. “” was used alone in many places on the products bought during notarized purchase, and “VICTORIACROSS” and “” were used in combination on packaging and tags. The allegedly infringing products were backpacks, handbags, suitcases, etc., which fell into the goods approved for use under Victorinox’s “VICTORINOX” mark with reg. no. G763828, the “” mark with reg. no. 3491225, and the “Victorinox” mark with reg. no. 8563347. Therefore, the alleged infringement fell within the scope of protection of Victorinox’s trademarks, which constituted trademark infringement.

The court found that the production and use of Elite and Baoshun lacked a legal basis. Moreover, the following factors were considered: First, Elite’s “Weishi Cross in Chinese” mark with reg. no. 6954073 was determined by the China Supreme  Court to fall under Article 13, Paragraph 2 of the 2001 Trademark Law, which “reproduces, imitates or translates others well-known mark that are not registered in China are likely to cause confusion,” and invalidated. Therefore, Elite’s copying, imitating, and translating others’ prior well-known marks were done with bad faith intentions. Second, the alleged infringing stores and products used the “” logo that was similar to Victorinox’s registered marks. Compared with “,” the latter has a higher significance. The composition elements, method, and overall appearances were all very similar. Elite and Baoshun did not provide evidence to prove that their use had a legal basis for rights. Third, in the (2018) SPC Administrative Judgment No. 64 issued by the China Supreme Court on May 31, 2018, it was determined that prior to the registration date of the “VICTORIACROSS” mark with reg. no. 349122, Victorinox’s prior marks with reg. nos. G763828 and 3491225 were widely used in class 18’s goods for handbags, travel bags, and other goods, which could establish a certain fame in China. Therefore, as a product operator in the same industry, it was impossible for Elite to be unaware of Victorinox’s brand reputation, but it still used the “VICTORIACROSS” and “Weishi Cross in Chinese” in combination with the “” logo, which was very similar to the use of Victorinox. Its intention to actively seek to confuse the results was obvious. In summary, it can be determined that the subjective bad faith of Elite and Baoshun was obvious, and that their acts have infringed Victorinox’s trademark right, and they should bear the legal responsibility to stop the infringements.

2. RMB 800,000 in damages for unauthorized use of “Mercedes in Chinese” on auto parts

The Shanghai IP Court recently concluded a trademark infringement lawsuit between the appellant Shanghai Tonghe Auto Parts Co., Ltd. (“Tonghe”), the appellee Daimler AG (“Daimler”), and the defendant in the first instance Shanghai Tongzhi Auto Parts Co. Ltd. (“Tongzhi”). The court rejected the request to appeal and affirmed the lower court’s decision. Tonghe was ordered to immediately stop infringements against Daimler and was ordered RMB800,000 (USD112,380) in compensation to cover Daimler’s economic loss.

According to the notarized evidence submitted by Daimler and the administrative penalty decision, on-site transcripts, interrogation transcripts, photos and other evidence made by Shanghai Minhang District Market Supervision Administration, it can be determined that Tonghe sold brake pads, in the relevant stores it operated, along with filters, pulleys and other auto parts. These parts were marked with three-pointed star design, “Mercedes-Benz,” “MERCEDES-BENZ.” and other logos. The first instance court found that the said goods were identical to those approved for use by Daimler’s marks with reg. nos. 526122 and G1089299. The three-pointed star logo and the “MERCEDES-BENZ” mark used above were basically identical visually as the three-pointed star logo and the “MERCEDES-BENZ” mark owned by Daimler, which constituted identical marks. Compared with Daimler’s marks, the only difference between the “MERCEDES-BENZ” mark and the “Mercedes-Benz” mark was letter case, and there was basically no visual difference between the two in overall appearances. Therefore, Tonghe’s acts violated Daimler’s trademark rights. The first instance court took into account the relatively high popularity of Daimler’s marks on related goods, the fact that product quality may affect personal safety, and the variety of infringing products, and comprehensively considered Tonghe’s degree of subjective bad faith, the nature, time, and decided that the amount of compensation shall be determined based on factors such as the consequences, the quantity, and unit price of the infringing products, and the size of the company.

The main focus of dispute in the second instance of this case was whether the amount of compensation in the first instance was reasonable. Regarding Tonghe’s claim that the amount of compensation in this case should be based on the quantity of infringing products investigated and dealt with by the Market Supervision Administration and its fine. The second instance court found that Daimler, as the owner of the registered marks, has the right to both apply for administrative investigation and file a civil lawsuit for trademark infringement. Although Tonghe was punished administratively because Daimler purchased the infringing product based on the three notarizations involved in the case, the amount of compensation in civil infringement lawsuits is not necessarily based on the facts and the fines found in the administrative punishment. The first instance court’s comprehensive considerations of Tonghe’s infringement facts were appropriate.

With regard to Tonghe’s claim that Daimler failed to present evidence of notarized purchases in the first instance, resulting in the inability to identify product quality, Daimler should bear the adverse consequences. The second instance court found that although Daimler did not submit notarized evidence in the first instance, based on the photos attached to the notarial certificate and the content recorded on the CD-ROM and the relevant facts recorded in the administrative punishment decision, Tonghe did not submit valid evidence to prove its products’ legal origin. Based on this, the first instance court was not in err in determining that Tonghe infringed Daimler’s trademark. Moreover, product quality of the infringing products would not have affected the determination of trademark infringement.

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

Weekly China Trademark News Updates

May 30, 2023

1. Sandisk’s red-grey color combination mark was infringed and the infringer was held to be unfairly compete with Sandisk

The Shenzhen Intermediate Court recently concluded a trademark infringement and unfair competition lawsuit between SanDisk Co., Ltd. (“SanDisk”), Nanning Big Whale Trading Co., Ltd. (“Nanning Big Whale”), and Shenzhen Big Whale Trading Co., Ltd. (“Shenzhen Big Whale”).  The court held that the defendants infringed Sandisk’s mark and constituted unfair competition. The court ordered economic compensation and reasonable costs of RMB150,000 (USD 21,206).

(Cited Mark)

The court found that Nanning Big Whale and Shenzhen Big Whale jointly produced and sold the CK MicroSD memory card that SanDisk accused of infringement. According to the evidence of fame such as sales, publicity, and honors provided by SanDisk, it can be determined that  as early as 2018, the SanDisk MicroSD memory card enjoyed a certain market fame and reputation across China, and can be seen as goods with a certain influence. SanDisk has been selling and promoting SanDisk MicroSD memory cards since 2011, and has not changed its red-gray color combination decoration design for many years. SanDisk uses red-gray colors and their permutations on SanDisk MicroSD memory cards “.” It has a certain degree of significance. After years of use and promotion of SanDisk’s overall decoration design, the relevant public has associated said decoration with SanDisk’s MicroSD memory card, and has the function of distinguishing the source of goods, which is a unique decoration of SanDisk. After comparison, Nanning Big Whale and Shenzhen Big Whale used identical decoration as SanDisk’s “” on the CK MicroSD memory cards they produced and sold. Considering the SanDisk MicroSD memory card and its good reputation and uniqueness of the decoration, when the relevant public pays general attention, it is easy to confuse and misidentify the source of the CK MicroSD memory card. In particular, Shenzhen Big Whale also used SanDisk when selling CK MicroSD memory cards. In addition, the defendants falsely used product information, copyright, and trademark rights statement of SanDisk’s parent company, Western Digital Corporation. Therefore, it can be determined that Nanning Big Whale and Shenzhen Big Whale,  without the permission of SanDisk, used the logo “” identical to the decoration of SanDisk’s MicroSD memory card that have a certain influence on SanDisk, constituting unfair competition.

At the same time, Nanning Big Whale and Shenzhen Big Whale used the exact same logo on the CK MicroSD memory card product that was identical as the blank memory card approved for use for SanDisk registered trademark “” with reg. no. 31557071, and sold the said product, infringed SanDisk’s trademark right.

2. “Nike” and “De Wu in Chinese” marks were infringed

The Dongcheng District Market Supervision and Administration Bureau of Beijing imposed an administrative penalty on an individual in accordance with the second paragraph of Article 60 of the China Trademark Law, confiscated the goods and imposed RMB30,000 (USD 4,242) in fine.

Nike owns the “NIKE” mark with reg. no. 4516216 for “clothing, shoes, and soccer shoes” in class 26. Shanghai Shizhuang Information Technology Co., Ltd. owns the “De Wu in Chinese” mark with reg. no. 31033869 in class 35 for “marketing, providing an online market for buyers and sellers of goods and services” in class 35.

On November 12, 2021, the Market Supervision and Administration Bureau of Dongcheng District, Beijing received a report that there was a stall in a market selling sneakers suspected of infringing on the “NIKE” mark. After investigation, in October 2021, the party concerned paid RMB1,600 (USD226) to buy 100 pairs of sneakers with the “NIKE” trademark from a salesperson and sold 5 pairs when he was investigated on November 12, 2021. Nike confirmed these sneakers were infringing products. Inside the shoebox, there were words “identified as genuine by an appraiser” and a QR code with “De Wu in Chinese.” After confirmation with the owner of the “De Wu in Chinese” app Shanghai Shizhuang Information Technology Co., Ltd., the above appraisal conclusion was not Issued by the company or authorized to be issued by others.

This case is a typical case of administrative law enforcement in which the use of infringing trademarks on goods to deceive consumers’ trust and confuse the source of goods.

3. Unauthorized use of “Forbidden City in Chinese” caused infringer RMB 330,000 in compensation

The Beijing Intellectual Property Court recently concluded an unfair competition dispute between the Palace Museum, Sichuan Palace Wine Co., Ltd. (Sichuan Palace Wine), Palace Museum Wine (Beijing) Co., Ltd. and sentenced the defendant to compensate RMB330,000 (USD4,657) for economic losses.

The court held that the Forbidden City used to be the imperial palace of the Ming and Qing dynasties, and later became the Palace Museum in Beijing. It is a national key cultural relic protection unit and a world cultural heritage. It has long been known to the public and enjoys a high reputation. When mentioning “Forbidden City in Chinese,” people will first think of the Palace Museum, not other meanings. Beijing Forbidden City Company promoted wine products on its website and marks “Supervised by the Palace Museum” next to the displayed product pictures and displays a sign with “Supervised by the Palace Museum”; Beijing Forbidden City Company registered the “Forbidden City Liquor Brand Center” WeChat public account on February 21, 2017 to display the wine bottle and packaging pictures of the “Forbidden City Liquid” liquor, and the base showing the liquor bottle was marked with the words “produced by the Palace Museum in Beijing,” etc. As of the hearing date of this case on June 9, 2022, the said Public Account still labeled the time as September 22, 201 and the content was marked with the words “supervised by the Palace Museum” on the base of the “Forbidden City Liquid” liquor displayed. The words “Supervised by the Palace Museum” contained the name of the original enterprise name, and “Forbidden City in Chinese” is a well-known and recognizable name in the enterprise name of the Palace Museum. Therefore, the above acts were enough to make the relevant public misunderstand the source of the goods. Even if the Beijing Forbidden City Company standardized and used its corporate name on its webpage, it was enough to cause the relevant public to mistakenly believe that the company has a close relationship with the Forbidden City, thereby damaging the competitive interests of the Forbidden City. The Beijing Forbidden City Company has violated the Palace Museum’s rights and interests of the “Forbidden City in Chinese” name which constituted unfair competition. The words “Supervised by the Palace Museum” marked on the packaging box of the “Forbidden City Liquid” liquor bottle produced and sold by Sichuan Palace Museum Company contained the name of the Palace Museum. Therefore, the said behavior was enough to make the relevant public misunderstand the source of the goods, infringed on the rights and interests of the “Forbidden City in Chinese” name of the Palace Museum, and constituted unfair competition.

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

Weekly China Trademark News Updates

May 24, 2023

1. “Adidas” was recognized as a well-known mark and successfully fended off “qdidas”

Disputed Mark Reg. No. 19502292	Cited Mark 1 Reg. No. 71092	Cited Mark 2 Reg. No. G1037620	Cited Mark 3 Reg. No. 3336263

The Beijing High Court recently concluded an administrative trademark invalidation dispute between the appellant Tianjin Jiuhong Bicycle Co., Ltd., (“Jiuhong”), the CNIPA, and Adidas Co., Ltd. (“Adidas”). The appeal was dismissed, and the first instance court judgment upheld.

The issue in this case is whether the Disputed Mark violated Article 13, Paragraph 3 of the 2014 Trademark Law. The court found that: based on the evidence in the case, it can be proved that the Cited Mark 1 has been widely known to the public on clothing and other goods before the Disputed Mark’s application date and constituted a well-known mark. According to the need-based determination principle of well-known marks, the courts will only determine whether a trademark is well-known when it is really necessary. This court has protected the rights and interests of Adidas by affirming that the Cited Mark 1 is a well-known mark, and will not comment on whether the Cited Marks 2 and 3 constituted well-known trademarks.

The Disputed Mark is composed of English letters “qdidas”, the Cited Mark 1 is a word trademark composed of uppercase English “ADIDAS”. The Disputed Mark and the Cited Mark 1 are relatively similar in terms of word composition, pronunciation, meaning, appearance, etc. It constituted a copy or imitation of the Cited Mark 1. Although “bicycle; trolley” and other goods approved for use under the Disputed Mark and “clothes” goods for which the Cited Mark  is well-known are not similar goods according to the CNIPA Goods and Services Classification, they overlap in terms of sales channels and consumer groups, which belong to goods with a high degree of correlation. Considering factors such as the distinctiveness and popularity of the Cited Mark 1 and the degree of imitation of the Disputed Mark, the use of the Disputed Mark on “bicycles; trolleys” and other goods was likely to cause the relevant public mistakenly believe that the Disputed Mark and the Cited Mark have a certain degree of connection, thereby weakening the distinctiveness of each Cited Mark, improperly using the market reputation of the Cited Marks, and causing the interests of Adidas to be affected and damaged. Therefore, the first instance judgment and the sued ruling determined that the registration of the Disputed Mark violated the provisions of Article 13, Paragraph 3 of the 2014 Trademark Law was not wrong, and this court affirmed. The relevant grounds of appeal of Jiuhong cannot be established and should not be supported.

2. Nike successfully invalidated the “Swoosh & M & Design” mark

Disputed Mark Reg. No. 30399446	Cited Mark 1 Reg. No. 991722	Cited Mark 2 Reg. No. 4581865

The Beijing High Court recently concluded an administrative trademark invalidation dispute between the appellant Shanghai Jingnai Apparel Co., Ltd. (“Jingnai”), the CNIPA, and Nike Innovation Co., Ltd. (“Nike”). The court dismissed the appeal and affirmed the first instance judgment.

The Beijing High Court found that “clothing, shoes, socks” and other goods approved for use under the Disputed Mark and “clothing, shoes, hats” and other goods approved for use under the Cited Marks 1 and 2 fall into the same subclass according to the CNIPA Goods and Services Classification, constituted as identical or similar goods. The Disputed Mark is composed of the English letter “m” and designs, and the Cited Marks 1 and 2 are design marks. Comparing the Disputed Mark with the Cited Marks, it can be seen that the lower part of the Disputed Mark is highly similar to the design of the Cited Marks. The said marks were similar in design methods and overall visual effects, which constituted similar trademarks. In addition, the evidence submitted by Nike can prove that the Cited Marks already had a high reputation before the application date of the Disputed Mark through its publicity and use. Jingnai did not submit any evidence to prove that the Disputed Mark had formed a one-to-one relationship with the Disputed Mark through use and promotion, and was able to distinguish itself with the Cited Marks. On this basis, if the Disputed Mark and the Cited Marks 1 and 2 coexisted in the market, it would easily cause the relevant public to be confused and misunderstand, or believe that there was a certain relationship between the source of the goods. Therefore, the Disputed Mark and the Cited Marks constituted similar marks on identical or similar goods, and the registration of the Disputed Mark violated Article 30 of the Trademark Law. The original judgment was correct and shall be upheld.

3. The trademark infringer of the “Atlantis in Chinese” mark was ordered to compensate for RMB 1 million

The Hainan High Court recently concluded a trademark infringement and unfair competition dispute between the appellant Hainan Fuda Building Materials Co., Ltd. (“Fuda”), Hainan Atlantis Hotel Management Co., Ltd. (“Hainan Atlantis”), the appellee Kona International Co., Ltd. (“Kona”) and Hainan Zhongrui Huachen Investment Holdings Co., Ltd. (“Zhongrui Huachen“), the defendant in the original trial. The court dismissed the appeal and upheld the first instance judgment.

The issues in this case are: 1. Whether Fuda, Hainan Atlantis, and Zhongrui Huachen, the defendant in the original trial, infringed on Kona’s trademark rights; 2. Whether Fuda, Hainan Atlantis, and Zhongrui Huachen, the defendant in the original trial, have committed unfair competition; 3. If their actions constitute trademark infringement and unfair competition, how should the three companies be held civilly liable.

Regarding issue 1, first of all, Kona registered the “ATLANTIS” mark with reg. no. 5171193, the ” Atlantis in Chinese” mark with reg. no. 6635808, the “ATLANTIS” mark with reg. no. 10940717 and the “Atlantis in Chinese’ mark with reg. no. 14010119 (collectively referred to as the “Cited Marks”), which are approved for use in services such as sales of commercial housing, real estate leasing, management, apartment management, etc. According to the facts ascertained by the first instance court, since 2008, Kona has been publicizing its “Atlantis in Chinese” and “ATLANTIS” marks on Xinhuanet and other media. It has further publicized and reported the Cited Marks when it began to construct and operate the Sanya Atlantis Hotel. The Sanya Atlantis Hotel named after the Cited Marks has won relevant honors successively, with high significance and fame. Second, Zhongrui Huachen and Fuda named their real estate project under development and construction “Atlantis Garden in Chinese” and used “Atlantis in Chinese” and “ATLANTIS” extensively when promoting and selling its project. Such use, in fact, played the role of identifying the project, and it was essentially a commercial mark. The name was exactly the same as the prominent part of the Cited Mark, and the pronunciation was the same, and it was located in Hainan, where the Sanya Atlantis Hotel is located. It will make the relevant public mistakenly believe that there was a certain connection between the real estate project and Kona and its brand services, which would easily mislead the public and confuse the relevant public. Therefore, Zhongrui Huachen and Fuda used Kona’s Cited Marks as the name of its real estate and used it in large quantities in the process of development, construction, publicity and sales, which infringed Kona’s trademark right. In addition, according to the ascertained facts, Kona applied for the registration of the “ATLANTIS” mark in 2006 and the “Atlantis in Chinese” mark in 2008, and made a lot of publicity for the said marks and gained wide popularity no later than 2008. The construction engineering design plan of the “Atlantis Garden in Chinese” project was only approved by the Haikou City Planning Bureau on July 17, 2012. Therefore, the prior use defense of the three companies could not be established.

Regarding issue 2, the Hainan Atlantis Company was a company established by Zhongrui Huachen on November 25, 2013 for the operation and management of real estate projects. Basically, the Hainan Atlantis Company used the same characters as Kona’s already well-known registered mark “Atlantis in Chinese” as its enterprise name and used “Atlantis in Chinese” in a large number of daily operations and promotional activities. The “Atlantis in Chinese” mark would easily made the relevant public mistakenly believe that the three companies and the real estate projects developed by them have a specific relationship with Kona. Therefore, it constituted unfair competition and should bear corresponding civil liabilities.

Regard issue 3, the assumption of infringement liability, Kona requested the three companies to stop infringing its Cited Marks, stop using the Cited Marks in all commercial publicity and activities including but not limited to the “Atlantis in Chinese” in real estate project site, brochures and WeChat public account, and requested the Hainan Atlantis Company to immediately stop unfair competition and change the company name. The changed company name must not contain the word “Atlantis in Chinese” based on factual and legal basis. The first instance court supported Kona’s requests according to the law. Regarding the liability for compensation, because Kona did not provide evidence to prove the economic losses it suffered due to the infringement, nor did it provide evidence to prove that Zhongrui Huachen, Fuda and Hainan Atlantis gained unjustified benefit, the first instance court comprehensively considered factors such as the popularity and influence of the Cited Marks, the nature and degree of infringement by the three companies, the time of infringement and the degree of subjective fault, and the reasonable expenses paid by Kona in this case, it was not inappropriate to determine that the three companies should compensate Kona for economic losses and reasonable expenses of RMB 1 million (USD141,747).

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

Weekly China Trademark News Updates

May 18, 2023

China Trademark Filing Strategies – Rejection Appeals and Backup Filings

China’s trademark prosecution timelines and its ever-growing trademark database have brought genuine concerns to brand owners when considering filing new applications. While the China National Intellectual Property Administration has been continuously accelerating new trademark application examination process, expedited examination creates an obvious downside of increase in rejections that often requires applicants to remove citations (such as non-use cancellation or invalidation). How to keep trademark applications alive while dealing with citations will be the main focus in this short article.

Below are some of trademark timelines, which may vary on a case-by-case basis and only serves as a reference for brand owners’ filing strategies.

When a new filing is rejected based on one or more prior marks, there are generally two options to consider. Each of the two options has its own advantages, risks, and disadvantages.

Option 1 – Keep the original filing alive by exhausting all appeal proceedings until all citations are removed

• Actions
  1. File rejection appeal to keep the application alive. Meanwhile, file non-use cancellations, invalidations or other actions against the citations.
  2. If rejection appeal decision is unfavorable because some citations remain valid, appeal to the Beijing IP Court (first instance court appeal), the Beijing High Court (second instance court appeal), and even re-trial court appeal.
  3. Note, however, after a citation is expired or invalidated, the CNIPA may wait for another year to approve later-filed identical or similar application for the purpose of avoiding confusion among consumers according to the Chinese Trademark Law.
• Advantages
  • Earlier filing date works better in enforcements against later-filed bad faith filings or even in infringement cases.
  • Trademark portfolios are easier to manage.
• Risks and Disadvantages
  • Formality documents for court appeals require notarization and legalization, which may take longer than expected and lead to failure to docket the appeal.
  • Attorney fees and other related fees for court appeals are significantly higher than filing backup applications.

Option 2 – Keep filing backup applications until all citations are removed

• Actions
  1. File rejection appeal to keep the first application alive. Meanwhile, refile a second application that is identical to the first mark as a backup.
  2. If the backup second application is rejected based on the same citation(s) found in the first application, appeal the backup second application rejection, drop the first application when and if its rejection appeal decision is unfavorable, and file a backup third application. If the backup second application rejection appeal failed, repeat actions 1 and 2.
  3. If the backup second application is rejected based on additional or new citations,
     • and they cannot be canceled or invalidated, drop the second application and keep the first application alive by exhausting all appeal proceedings until all citations are void.
     • and they can be canceled or invalidated, appeal the backup second application rejection, and consider filing a third application as a backup, unless the first application survives until all citations are removed.
•  Advantages
  • There will always be a pending backup application.
  • Relatively low official fees and attorney fees, and no notarized/legalized formality documents are required.
• Risks and Disadvantages
  • Though refiling when a prior application is rejected is a good timing for backup purpose, there are risks that additional citations, including those filed in between the prior application and the backup application may be cited to block the backup application. As such, court appeal proceedings stated in Option 1 may be necessary.
  • Trademark portfolios would be more complicated to manage.

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

Weekly China Trademark News Updates

May 10, 2023

1. The CNIPA issued the “Work Plan for Systemically Governing Bad Faith Trademark Registration and Promoting High-quality Development (2023-2025)”

On May 8, 2023, the CNIPA issued the ” Work Plan for Systemically Governing Bad Faith Trademark Registration and Promoting High-quality Development (2023-2025).” The work plan is aimed at consolidating the achievements in combating bad faith trademark registration in recent years and deepening the governance of bad faith trademark registration in all fields.

2. “IKEA” is recognized as a well-known mark

Inter IKEA Systems B.V. (“IKEA”) sued Qingdao Yi Jia Staircase Co., Ltd., Linyi Mingde Yi Jia Home Furnishing Co., Ltd., Shanghai Red Star Macalline Brand Management Co., Ltd. Rizhao Branch, and Wang Zhaobin for trademark infringement and unfair competition.

The court found that IKEA is the owner of the “IKEA in Chinese” mark with reg. no. 5782277 and the “IKEA” mark with reg. no. 175291. The said marks were all valid. The defendants used a large number of logos such as “IKEA in Chinese” and “Mingde IKEA in Chinese” in WeChat public account and sales channels and manufacturing sites of “IKEA Whole Wood Mansion,” etc., which constituted identical and similar with the “IKEA in Chinese” trademark with reg. no. 5782277. The defendants used “IKEA” in WeChat public account during the poster publicity week, which was identical with the “IKEA” mark with reg. no. 175291. It was very easy for the relevant public to mistakenly believe that the defendants or their products were related to the plaintiff. The defendants’ action constituted trademark infringement. Regarding the use of the “ENKEA” mark, IKEA’s “IKEA” mark with reg. no. 175291 was registered in China since  1982. After years of use by IKEA, that is, large-scaled publicity and promotion, it has been widely known to the relevant public and has been recognized by administrative agencies and judicial agencies as a well-known mark and has received protection for many times. It should be recognized as a well-known mark. This particular mark reached well-known status before Yi Jia Staircase Co., Ltd. registered its “ENKEA” mark with reg. no. 7682322 on September 8, 2009. Combining the series of acts of the defendant Yi Jia Staircase Co., Ltd., its registration and use, the registration was a bad faith registration and should not be restricted within five years from the date of trademark registration, and the plaintiff has the right to request prohibition of its use. The defendants Yi Jia Staircase Co., Ltd. and Mingde Yi Jia Company used “ENKEA” in large quantities in its WeChat public account, “IKEA Whole Wood Mansion,” and other sales places, production workshops, etc. Compared with the “IKEA” mark, the mark “ENKEA” is similar with the “IKEA” mark in the combination of letters and pronunciation, and these marks shall constituted similar marks under the Chinese Trademark Law, which was likely to cause the relevant public to believe that the defendants or their products were associated with IKEA. Thus, the defendants’ actions infringed upon the trademark right of the “IKEA” mark with reg. no. 175291 owned by IKEA, and such use should be prohibited. The defendant, Red Star Macalline Rizhao, is a professional company engaged in the business of furniture products and should have a relatively high review obligation. The contract between the defendants and the third party clearly stipulated that the operating brands were ” IKEA in Chinese Staircase” and “ENKEA IKEA Whole Wood Mansion” and when the “ENKEA” and “IKEA” logos were clearly used in the store, as a store operator, Red Star Macalline Rizhao did not perform reasonable management duties, which constituted trademark infringement. At the same time, the defendant Yi Jia Staircase Co., Ltd. registered the domain name “enkea.cn” where the identifying “enkea” in this domain name is similar to IKEA’s “IKEA” mark with reg. no. 175291, and the defendant used it as a domain name in publicity and in contact with customers. It was very likely to cause confusion, which constituted trademark infringement of the “IKEA” mark with reg. no. 175291.

With regard to unfair competition, the defendant used the plaintiff’s “IKEA in Chinese” mark with reg. no. 5782277 as its business name, and the business scopes of the two defendants were similar to that of the plaintiff, which could easily lead to confusion among the relevant public, who believed that the defendants and the plaintiff had a direct relationship. This behavior constituted unfair competition. In summary, the court held that the defendants should stop infringing on the plaintiff’s trademark rights, and ruled that the defendants Qingdao Yi Jia Staircase Co., Ltd. and Linyi Mingde Yi Jia Home Co., Ltd. should stop using the word “Yi Jia in Chinese” in their business names. And they should compensate IKEA for economic losses and reasonable expenses of RMB3 million (USD433,025), the defendant Wang Zhaobin was jointly and severally liable for compensation, and the defendant Shanghai Red Star Macalline Brand Management Co., Ltd. Rizhao Branch should compensated Ikea for economic losses and reasonable expenses of RMB50,000 (7,217).

3. Huawei was awarded double punitive damages of RMB 5 million in a trademark infringement lawsuit

Huawei Technologies Co., Ltd. (“Huawei”) sued Shenzhen Shangpai Technology Co., Ltd. (“Shangpai”) and Liu Yuliang for trademark infringement and unfair competition. Later, Huawei removed the unfair competition claim.

The court found that Shangpai set “Huawei” as a search keyword and prominently used “Huawei in Chinese” and “HUAWEI” logos in product display pictures, which could have the effect of identifying the source of goods for consumers, so the court determined that the use of the accused infringing logo belonged to trademark use under the Chinese Trademark Law. In this case, the accused infringing mobile phone stabilizer fall into the same class of goods as those goods approved under the “HUAWEI” mark with reg. no. 16844938 approved for photographic equipment racks and camera tripods. Though the accused infringing mobile phone stabilizer was not similar to the “HUAWEI” mark with reg. no. 14203957 approved for smartphones, cameras, earphones, and mobile phone protective cases based on the the CNIPA Goods and Services Classification, however, the CNIPA Goods and Services Classification was for reference only. In actual use, it belongs to the supporting facilities for the use of camera functions in smartphones. The functions and uses of the two were closely related, and there was a certain overlap in sales channels and consumers, which constituted similar goods. Regarding the similarity of trademarks, the “Huawei in Chinese” mark in this case was exactly identical to the “Huawei in Chinese” mark with reg. no. 16844938. The accused infringing mark “HUAWEI” with the “HUAWEI” mark with reg. no. 14203957, the 8 pastel flower logo and the HUAWEI text were identical. The former has an extra line of text at the bottom, and the details of the two were slightly different, but the overall structure was similar. Based on the general attention of the relevant public, it was easy for the relevant public to misidentify the source of Shangpai’s products or believed that its source had a specific connection with the goods registered by Huawei, which was likely to cause confusion, and constituted as similar marks. Therefore, Shangpai’s use of the “HUAWEI” logo in the process of selling mobile phone stabilizer products in the online store constituted an infringement of Huawei’s “HUAWEI” mark with reg. no. 16844938 and the “HUAWEI in Chinese” mark with reg. no. 14203957. Regarding the amount of compensation, Huawei requested the application of punitive damages, taking Shangpai’s benefits from the infringement as the compensation base, plus twice the punitive damages. The court comprehensively considered the subjective fault degree of Shangpai and the objective infringement circumstances. In order to effectively play the role of punitive damages in punishing and preventing infringement, the court determined to double the punitive damages, and supported the calculation method of punitive damages claimed by Huawei, and fully supported Huawei’s compensation claim of RMB5 million (USD722,157) against Shangpai.

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

Weekly China Trademark News Updates

April 25, 2023

Summary of the Supreme People’s Court’s Annual Trademark Cases

On April 23, 2023, the Supreme People’s Court released the summary of its annual intellectual property cases, among them, there are civil and administrative trademark cases as follows.

(1) Civil trademark cases

 A trademark owner shall not prohibit others from legitimate use of the place names in a trademark

In the retrial, the applicants Xiaoling Wu, Wenping Liu and the respondent Zou Xue’e Tofu Workshop in Nanmiao, Yuanzhou District, Xue’e Zou, Gensheng Gao Vegetable Stall in Chengxi, Yuanzhou District, Gao Gensheng, Yu Zhulan Bean Products Stall in Chengxi, Yuanzhou District, and Yu Zhulan trademark infringement and unfair competition case ((2021) Zui Gao Fa Min Shen No. 7933), the Supreme People’s Court pointed out that if a registered trademark contains a geographical name, the trademark owner shall not prohibit business owners within the area marked by the geographical name from using the geographical name in good faith and legitimately.

Prior administrative punishment does not affect the determination of civil infringement liability

In the retrial trademark infringement and unfair competition case between Nanfang Pump Co., Ltd. and the respondent Yongan Nanfang Science and Technology Pump and Valve Business Department (“Nanfang Pump) ((2021) Zui Gao Fa Min Shen No. 6419), the Supreme People’s Court pointed out that in a trademark infringement case, even if the alleged infringement had been subject to administrative punishments and its evidence can reflect the fact and actual implementation of the infringement, the people’s court shall consider the interest party’s claims and relevant evidence in the infringement case to determine the actual circumstances of the infringement and its corresponding infringement liability.

Application of the statute of limitations in trademark infringement cases

In the said “Nanfang Pump Industry” trademark infringement case, the Supreme People’s Court pointed out that if there was no evidence to prove the starting time of the statute of limitations, and the accused infringer has not raised a defense against the statute of limitations, the people’s court should not directly apply Article 18 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Trademark Civil Dispute Cases which stipulates that the accused infringer does not need to bear compensation liability.

(2) Administrative trademark cases

One should reasonably avoid other people’s prior trademarks when applying for a trademark

In the retrial case, the applicant Shenzhen Xiangli Arts and Crafts Furniture Co., Ltd., the respondent Beijing Hongwen Boya Traditional Hardwood Furniture Co., Ltd., and the appellant of the second instance, the CNIPA, an administrative dispute over a request for invalidation of trademark rights ((2022) Zui Gao Fa Xing Zai No. 1) the Supreme People’s Court pointed out that the interest parties who knew of the prior trademarks used by others based on their business operations but did not reasonably avoid them, and still applied for the disputed marks that were similar to other trademarks on identical or similar goods that violated the principle of good faith. Such disputed marks shall not be registered.

Determination of the distinctiveness of English trademarks

In an administrative trademark rejection appeal dispute between the retrial applicant Nuoausi and the respondent the CNIPA ((2022) Zui Gao Xing Zai No. 4), the Supreme People’s Court pointed out that to determine whether an English trademark is distinctive, it should consider the common understanding of the relevant Chinese public for the goods or services designated by the mark as the standard, judging from the element and meaning of the overall composition, considering the degree of association between the mark itself and the goods or services designated for use, and whether it can play a role in distinguishing the source of goods or services when used.

The effect of administrative regulations on judging similarity of goods and services

In the trademark invalidation retrial case between the applicant Hebei Huatuo Pharmacy Pharmaceutical Chain Co., Ltd., the respondent Huatuo Sinopharm Co., Ltd., and the first-instance defendant the CNIPA ((2021) Zui Gao Xing Zai No. 76), The Supreme People’s Court pointed out that when determining whether goods and services are similar, it is necessary to consider the state’s management regulations for the manufacture, sales and related services of such goods in order to maintain the relevant market order, and consider the effect of such regulation on goods sales channels, service methods, and impact on consumer groups, etc. The situation of long-term stable market order formed by such regulations should be taken as an important consideration.

Determination of a registered trademark that damages the name right of foreign natural persons

In the trademark invalidation retrial case between the applicant Manolo Blahnik, the respondent the CNIP and, Yuzhou Fang ((2021) Zui Gao Xing Zai No. 75), the Supreme People’s Court pointed out that foreign natural persons such as well-known designers use and promote their name as the brand of the product. Before the application for registration of the disputed trademark, its name has a certain popularity among the relevant public in mainland China, the disputed mark completely contains the name of the natural person, and the relevant public believes that the disputed mark referred to the natural person, or that the goods marked with the disputed mark were authorized by such natural person, or that there were special association with that natural person, such disputed mark’s registration damaged the natural person’s name right.

The effect of the trademark registrant’s earlier trademarks on the approval and registration of its later trademarks

In the trademark invalidation retrial case between the applicant Guangdong Goodwife Technology Group Co., Ltd. and the respondent CNIPA and Foshan Kaidaneng Enterprise Management Consulting Co., Ltd. ((2022) Zui Gao Xing Zai No. 3), the Supreme People’s Court pointed out that whether a trademark can be registered should be judged in accordance with the relevant provisions of the Trademark Law, and the prior well-known trademark owned by the trademark registrant cannot be the obvious reason for the registration of the later-filed trademarks.

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

Weekly China Trademark News Updates

April 19, 2023

1. Chivas successfully invalidated a copy registered on coffee, tea, and cookies

A Beijing company registered the “Zhihuashi CHIVAS” mark (“Disputed Mark”) in May 2015, which was partially rejected and published for opposition for Coffee; Tea; Sweetmeats [Candy]; Honey; Cookies; Noodles; Prawn cracker; Ice cream. An opposition was raised against the publication but the Disputed Mark was allowed. Chivas filed an invalidation against the Disputed Mark shortly after its registration.

The CNIPA found in the invalidation that the Disputed Mark’s approved use for coffee, cookies, and other goods constituted as a similar mark with the Cited Mark 1 and 2 “CHIVAS in Chinese” on identical or similar goods. However, the Disputed Mark’s other approved goods of sweetmeats [candy], ice cream, honey were not the same as those approved goods of the Cited Mark 1 and 2. Thus, the Disputed Mark was maintained for “sweetmeats [candy], ice cream, honey” but invalidated on “coffee, tea, cookies, noodles, prawn cracker”.

The owner of the Disputed Mark filed an appeal to the Beijing IP Court. The Beijing IP Court rejected the appeal. The owner of the Disputed Mark then appealed to the Beijing High Court to request to vacate the prior decisions and claimed that the Disputed Mark was a continuation of the mark with reg. no. 1768387. Thus, the Disputed Mark’s status shall still be valid.

During the process of the second instance appeal, the Disputed Mark was cancelled for all said goods due to three-year non-use and was published on January 13, 2023 on the Registered Trademark Cancellation Gazette.

The Beijing High Court found that: although all of the Disputed Mark’s goods had been cancelled and published, the nature and legal consequences of trademark cancellation and trademark invalidation are different. In addition, the Disputed Mark’s rights can have certain impact to the civil cases involved while it was still valid. Thus, even though the Disputed Mark had been cancelled and its status published, it was still necessary to determine whether the Disputed Mark violated Article 30 of the 2013 China Trademark Law.

In this case, the Disputed Mark’s approved goods for “coffee, tea, cookies, noodles, prawn crackers” fell into the same subclasses as “coffee, tea, sandwich, instant noodles, popcorn” approved for the Cited Mark 1 and 2. And the said goods’ function, use, manufacturing department, consuming public highly overlapped. These goods constituted identical or similar.

The Disputed Mark is a word mark consisting of “Zhi-hua-shi” on top and “CHIVAS” at the bottom. The Cited Mark 1 is a word mark consisting of simplified Chinese characters “Zhi-hua-shi.” The Cited Mark 2 is a word mark consisting of traditional Chinese characters “Zhi-hua-shi.” The Disputed Mark’s Chinese part “Zhi-hua-shi” shared the first two Chinese characters with the Cited Mark 1 and 2, and the ending characters “shi” shared identical pronunciation and similar fonts with the “Shi” characters in the Cited Marks 1 and 2. The Disputed Mark and the Cited Mark 1 and 2 are similar in word composition, pronunciation, meaning, overall appearance, and visual effect; if the marks are used simultaneously on identical or similar goods, the relevant public, when paying general attention and observing the marks individually, would likely to believe that the said marks’ goods came from the same source or the two entities were associated and thereby causing confusion. Thus, the Disputed Mark constituted as similar mark with identical or similar goods for “coffee, tea, cookies, prawn crackers, and noodles” with the Cited Mark 1 and 2, which violated Article 30 of the China Trademark law and shall be invalidated.

The owner of the Disputed Mark claimed that the Disputed Mark was a continued registration of its prior registered trademark No. 1768387. On this point, the court held that, the registrant enjoys separate trademark exclusive rights to each of the registered marks, and there was no definite continuation relationship between successively registered marks. The protective continuation registration of a new trademark on the basis of a registered trademark should not disrupt the established order of trademark registration, especially it should not constitute identical or similar trademark used on the same or similar goods with other’s previously registered trademarks.

Therefore, the relevant grounds of the appeal of the owner of the Disputed Mark cannot be found and the court would not support it.

2. A simple act of filing trademark applications does not infringe another’s trademark right or constitute unfair competition

Castrol is one of the world’s leading professional lubricating oil manufacturers. It owns the “Castrol in Chinese,” “CASTROL,” “CASTROL and Design,” “Jihu in Chinese,” “Cihu in Chinese,” “Jiahu in Chinese,” “Jinjiahu in Chinese,” and other trademarks in Class 4 on “industrial oils and greases; lubricants; greases; fuels,” etc. Among them, the “Castrol” trademark was first recognized as a well-known mark on lubricating oil products in China in 2008.

Castrol noticed that Annaichi Company (“Annaichi”), whose business scopes covered “lubricating oil (except brake fluid), grease, antifreeze, glass water, filter element processing and sales”, hired Century Dingli Agency to file applications for the “Castrol in Chinese,” “CASTROL & Design,” “Cihu in Chinese,” “Jihu in Chinese,” and “Jinjiahu in Chinese” marks in Class 39 for “goods delivery; goods delivery; commodity packaging; commodity packaging; transportation reservation; shipping goods; automobile transportation; cargo storage liquefied gas station; filling service,” etc.

Castrol filed a lawsuit before the Xicheng District Court in Beijing arguing that Annaichi’s act of applying for trademarks was a preparatory act for trademark infringement, and if the act did not constitute trademark infringement, it should constitute unfair competition. Castrol also argued that Annaichi’s trademark agency should know that these trademarks were improper, but still helped it to register these marks in bad faith. It was obvious that they have a common intention to infringe and cause damage, and they should bear joint and several liability for compensation.

The first instance court found that Annaichi’s applying for trademark applications were neither the act of trademark use regulated by the China Trademark Law, nor act of business production or operation regulated under the China Anti-Unfair Competition Law. Therefore, Annaichi’s application for registration of the disputed trademarks did not constitute trademark infringement or unfair competition against Castrol, and Castrol’s claims were dismissed.

Castrol appealed to the Beijing IP Court and, after holding an inquiry of both parties, the court affirmed the lower court’s decision.

The Beijing IP Court reasoned the following issues.

1. Whether Annaichi’s act of applying for trademark applications infringed upon Castrol’s trademark right

Article 1 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Trademark Civil Dispute Cases (“Judicial Interpretation”) stipulates that the following acts are acts that cause other damages to others’ exclusive right to use registered trademarks: 1) prominently using words identical to or similar to others’ registered trademarks as the name of the enterprise on identical or similar goods, which may easily mislead the relevant public; 2)  copying, imitating, or translating a well-known trademark or its main part registered by others and using it as a trademark on different or dissimilar goods, misleading the public, and causing possible damage to the interests of the registrant of the well-known trademark; 3) registering identical or similar characters as others’ registered trademarks as domain names, and conducting e-commerce transactions of related commodities through this domain name, which may easily mislead the relevant public.

In this case, first, Annaichi’s act of trademark applications was mainly to apply for five marks of “Castrol in Chinese,” “CASTROL & Design,” “Cihu in Chinese,” “Jihu in Chinese,” and “Jinjiahu in Chinese” in Class 39 for “goods delivery; goods delivery; commodity packaging; commodity packaging; transportation reservation; shipping goods; automobile transportation; cargo storage liquefied gas station; filling service,” etc.  The acts of applying these trademarks were not the circumstances of causing other damages to others’ exclusive trademark rights as stipulated under Article 1 of the Judicial Interpretation. Second, Annaichi only applied for trademarks and did not put the five trademarks into business activities for use as defined in the China Trademark Law. These marks did not play the role of identifying the source of goods as trademarks and therefore did not constitute trademark infringement. Thus, Castrol’s claim that Annaichi’s act of applying for registration of trademark was trademark infringement lacked facts and legal basis, the court cannot support such claim.

2. Whether Annaichi’s alleged acts constitute unfair competition

Article 2 of the Anti-Unfair Competition Law stipulates that operators shall abide by the principles of voluntariness, equality, fairness, and good faith, and abide by laws and business ethics in production and business operations. The act of unfair competition referred to in this law refers to the conduct of business operators in violation of the provisions of this law, disrupting the order of market competition, and damaging the lawful rights and interests of other business operators or consumers in their production and business operations. The business operators mentioned in this law refer to natural persons, legal persons and unincorporated organizations engaged in the production and operation of commodities or the provision of services.

In this case, the accused behavior was that Annaichi’s applied for the registration of five marks “Castrol in Chinese,” “CASTROL & Design,” “Cihu in Chinese,” “Jihu in Chinese,” and “Jinjiahu in Chinese” in 2017 in Class 39 for “goods delivery, cargo shipment, shipping cargo, automobile transportation” and other services. The “Castrol in Chinese” and “Castrol” series trademarks of Castrol are fanciful words with high distinctiveness and high popularity. Judging by common sense, the possibility of creating a similar mark in coincidence without contact or knowledge at all was very unlikely. As a competitor in the same industry, Annaichi should know that the “Castrol in Chinese” and “Castrol” series trademarks are extremely well-known, but it still applied for the registration of the disputed marks that are identical or substantially similar to the “Castrol in Chinese” and “Castrol” series trademarks, and it did not provide evidence or fully explain the source of creativity of the five disputed marks. Their subjective intentions were hardly legitimate. Therefore, Annaichi’s act of applying for trademark registration of the disputed marks was an act of applying for trademark registration in bad faith.

However, it was not appropriate to apply Article 2 of the Anti-Unfair Competition Law to provide relief only for the act of applying for trademark registration. First, the act of applying for trademark registration itself can be given administrative relief through the relevant provisions of the China Trademark Law. For example, Article 13 of the China Trademark Law provides protection of well-known marks, Article 15 provides regulation of agents or representatives preemptively registering trademarks, Article 30 provides regulation of identical or similar trademarks for identical or similar goods, and Article 32 provides protection of prior rights or prior unregistered trademarks, and Article 44’s prohibition of “obtaining trademarks by other improper means” provides regulation of preemptive registration of trademarks. These articles provide administrative relief for trademark registration applications in bad faith. Second, the act of applying for trademark registration is an administrative act of applying to the CNIPA for trademark registration. In the absence of abuse of trademark rights after registration, it would be difficult to identify a simple act of trademark registration as a production and operation act, so it did not belong to the acts regulated under the Anti-Unfair Competition Law. Third, as far as the evidence on file is concerned, Annaichi’s accused act was only the act of applying for trademark registration, and the applications for the five disputed marks have been rejected or decided not to be registered. The legal rights of Castrol Company had been protected. Therefore, there was no legal basis for Castrol’s claim that Annaichi’s alleged conduct constituted an act of unfair competition, and this court does not support its claims.

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