Weekly China Trademark News Updates

October 27, 2023

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

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

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

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

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

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

Please see here the link to the news in Chinese.

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Weekly China Trademark News Updates

October 25, 2023

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

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

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

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

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

October 12, 2023

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

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

2. Online submission of trademark oppositions will be fully implemented

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

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

Cited Marks	Disputed Mark

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

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

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

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

Weekly China Trademark News Updates

September 20, 2023

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

September 5, 2023

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

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

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

August 30, 2023

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

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

(Cited Mark)

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

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

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

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

(Cited Marks)

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

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

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

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

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

(Cited Mark)

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

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

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Weekly China Trademark News Updates

August 23, 2023

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

August 16, 2023

1. Tesla sued an infringer for using “Tesla Used Car in Chinese” and was awarded RMB 300,000 in compensation

Tesla Motors. INC. (later changed to “Tesla, Inc.”) is the owner of the “ ” mark with reg. nos. 12492119 and 13690440, the “Tesla in Chinese” mark with reg. nos. 13690434 and 13690432, the “” mark with reg. nos.  12492124 and 13698035, the “TESLA” mark with reg. nos. 13690428 and 7792673, and the “” mark with IR. No. 1199687.  Tesla, Inc.  is the copyright owner of the “TESLA T Design (TESLA T)” artwork that was completed on June 23, 2005. On September 14, 2021, Tesla, Inc.  issued a “General Power of Attorney” that authorized Tesla (Shanghai) Co. Ltd. (“Tesla”) to use or authorize a third party to use all Tesla’s registered or future intellectual property rights in China mainland, including but not limited to exclusive trademark right, copyright, etc. Tesla was also authorized to take administrative, civil, and criminal actions on behalf of Tesla, Inc.  Tesla sued Tesla Used Car (Guangzhou) Co., Ltd. Changsha Branch for trademark infringement, copyright infringement, and unfair competition.

After trial, the court stated that the underlying action for trademark infringement is that the use of the allegedly infringed trademark shall be trademark use as defined in the Trademark Law. The defendant argued its use was an objective description of its services that did not constitute as trademark use. The defendant used three logos on its signboard, “,” “,” and “,” all of which were identical or similar to the plaintiff’s registered trademarks. The defendant was not only using the same or similar logos on the signboard, but also used the same logos extensively on the background wall and promotional posters inside the store. In addition, the court’s findings shown that Tesla (Guangzhou) Used Car Sales Co., Ltd., an affiliate of the defendant’s parent company, registered a large number of marks identical or similar to Tesla’s registered trademarks between 2020 and 2022. Such action displayed the defendant’s parent company, Tesla Used Car (Guangzhou) Co., Ltd., did not have good faith in its subjective use of Tesla’s trademarks and goodwill. As a branch company, the defendant was an operator in the automobile sales industry, and its awareness of the Tesla brand was significantly higher than other ordinary companies. It was obviously inappropriate and unreasonable for the defendant to use a large number of logos that were identical or similar to the plaintiff’s registered trademarks inside and outside of the store and in promotional materials. In sum, the logos used by the defendant on the signboard of the store, the backdrop posters, and the indoor background wall constituted the function of identifying the source of the service and were not simply descriptive use, but constitute trademark use.

Regarding whether the defendant infringed the plaintiff’s trademark right, first, regarding the similarity of goods and services, Tesla’s registered trademarks include Class 12 for “electric vehicles, electric vehicles, etc.” and Class 37 for “vehicle maintenance and repair, vehicle service station (refueling and maintenance), vehicle (vehicle) failure rescue, etc.” As a used car seller, the defendant provided used car sales and related services at its premises. Although there were some differences between the classes for services approved under Tesla’s registered trademarks, through promotion and use of its trademarks, Tesla’s trademarks has a high degree of distinctiveness, and while being used in automobiles and other vehicles, it has obtained higher popularity in cars and its related field. The scope of Tesla trademark protection should be commensurate with its popularity, and it should obtain a wider scope of protection. Based on this, compared with the services provided by the defendant and the goods and service classes approved under Tesla’s trademarks, the two were identical in terms of service content, consumers, sales methods, channels, etc. They were basically identical in terms of aspects, and there was a specific association, which was likely to cause confusion among the relevant public and can be deemed as similar goods and services. Second, regarding whether the logos are identical or similar, after isolation and comparison, the alleged infringing logo “” was consistent in shape with the plaintiff’s registered trademark “,” which constituted identical trademark under the Trademark Law. The “Tesla in Chinese” logo in the accused infringing logo “” was consistent with the “Tesla in Chinese” trademark, which constituted identical trademark. Compared with the plaintiff’s “TESLA” and “” trademarks, the “TESILA” in the accused infringing mark “” has one more letter “I” than Tesla’s registered trademarks, but this did not contribute a substantial difference. There was basically no visual difference. The relevant public cannot distinguish the two when paying general attention, which will easily cause confusion and misidentification by the relevant public. These marks constituted similar marks. Third, regarding whether the defendant’s use of the logo was fair use. The defendant prominently and extensively used logos identical or similar to Tesla’s registered trademarks on signboards, store decorations, and in-store advertising posters on its business premises. Such use was likely to make the relevant public associate the identity of the defendant’s store with the specific product source of Tesla electric vehicles, and make the relevant public mistakenly believe that the defendant was legally authorized by Tesla, or that it was associated Tesla’s official used car dealer or a dealer that were closely related to Tesla. These actions were likely to cause confusion to the relevant public to believe that there were special associations, corporerations, or authorizations between Tesla and the defendant. Therefore, the defendant’s use of its logos constituted trademark infringement.

Regarding copyright infringement, Tesla enjoys copyright to the  artwork based on the registration certificate submitted when the defendant could not provide contrary evidence. The defendant used Tesla’s artwork without authorization on its store signs, interior decorations, and promotional posters, which has infringed Tesla’s right of authorship and reproduction. Regarding the defendant’s defense that Tesla’s artwork and its trademarks constituted coopetition, and it was inappropriate to be judged twice, the court held that trademark rights and copyrights were two different types of rights, and there were obvious differences in protection objects, legislative purposes, and protection principles. Therefore, an act constituted an infringement of both copyright and trademark constituted coopetition, but no repeated judgement.

Regarding unfair competition, first, in this case, Tesla enjoys the exclusive right to use the “Tesla in Chinese” trademark, and its “Tesla in Chinese” brand has already gained certain influence through operation and promotion. Subjectively, the defendant clearly has the intention of taking advantage of Tesla’s well-established reputation by using its registered trademarks “Tesla in Chinese” as its corporate name without authorization. The word “Tesla in Chinese” is a core identification element in Tesla’s corporate name. “Tesla in Chinese” contained in the defendant’s company name is the same as Tesla’s registered trademark and company name, which was likely to cause confusion to the relevant public to believe that the defendant is Tesla’s branch or has other relationship with Tesla, which constituted unfair competition. Second, the defendant used the words “the unique Tesla franchised used car in China” in its publicity. The word “unique” was used with an absolute meaning to describe its own business, which strengthened its connection with Tesla. With normal cognitive and reading logic, ordinary consumers would believe that it is a direct store of Tesla or has a certain connection with Tesla, which will easily lead to misunderstandings by the relevant public, thereby increasing the defendant’s own competition. Therefore, the court supported the plaintiff’s claim that the defendant constituted false propaganda.

In summary, the court determined that the defendant should compensate economic losses and reasonable expenses totaling RMB300,000 (USD41,110) based on factors such as the popularity of the trademark, the nature and circumstances of the defendant’s infringement, and Tesla’s need to obtain evidence and entrust a lawyer to defend its rights.

2. Theatrical performances infringed trademark rights and were suspected of false advertising

Recently, the Beijing Market Supervision and Administration Bureau imposed administrative penalties on trademark infringement and unfair competition case in the field of theatrical performances.

The Beijing Chocolate Children’s Art Troupe Co., Ltd. (“Chocolate Children’s Art”) used a poster promotional image with a graphic logo of “Jurassic Period in Chinese” on its website, WeChat official account and when selling performance tickets. The graphic logo was composed of a rectangle superimposed on the lower part of a circle. On the upper part of the circle, there was a relief picture of the upper body of a dinosaur bone, the background color was sky blue, and the words “Jurassic Period in Chinese” and “Jurassic period” were on the rectangle. UNIVERSAL CITY STUDIOS LLC is the owner of the  trademark with reg. no. 225445 (“Cited Mark”) in class 41 for “organizing educational or entertainment competitions; organizing performances (performances).” The actions of Chocolate Children’s Art constituted trademark infringement. Since the Cited Mark was registered on November 28, 2020, and is valid until November 27, 2030, the infringement period of Chocolate Children’s Art should be calculated from November 28, 2020. According to the agreement, Chocolate Children’s Art’s total income after November 28, 2020 totaled RMB238,747 (USD32,721).

Chocolate Children’s Art used posters with the logos of “THE CROODS” and “The Croods in Chinese” on its promotional posters in its WeChat public account. DREAMWORKS ANIMATION L.L.C. is the registrant of the “The Croods in Chinese” mark with reg. no. 14821246 that was approved to use in Class 41 for “radio and television program production; performance production” and so on. The actions of Chocolate Children’s Art constituted trademark infringement. Consider that the “The Croods” has not been performed due to COVID-19, there was no illegal turnover.

In addition, from the end of 2019, Chocolate Children’s Art has used “THE CROODS” and “The Croods in Chinese” in its WeChat public account for publicity, using the words “French Avignon Theater Festival Parent-child Interactive Repertoire” and “English version screenwriter/director Ariane Mnouckine, Chinese version adaptation/director Cheng Weishu (Hong Kong, China), art director Herbert mdash, production and production of Pamir performance, France” and other content to conduct commercial promotion for the production of the performance “The Croods.” After investigation, the children’s play “The Croods” produced and performed by Chocolate Children’s Art neither has any recommendation books and documents related to “repertoires recommended for parent-child interaction at the Avignon Theater Festival in France,” nor has any relevant cooperation agreements and documents with the listed personnel. The poster promotional pictures were designed by its employees using still photos as the base map. At the same time, the children’s drama “The Croods” produced and performed by Chocolate Children’s Art was completely self-written in accordance with the script “the Croods” that matched the copyrighted artwork registration certificate. It was completed without any adaptation, and the screenwriter and director were all its personnel. The Beijing Municipal Market Supervision Administration found that the aforementioned publicity of Chocolate Children’s Art constitutes false advertising publicity for the performances of “the Croods,” violated Article 8, Paragraph 1 of the “Anti-Unfair Competition Law.”

Based on the above, the Beijing Market Supervision and Administration Bureau imposed administrative orders a penalties of RMB 558120.68 (USD76,491) in total.

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Weekly China Trademark News Updates

August 10, 2023

1. Consent letter from an associated company was not accepted by court in a trademark rejection appeal case

GFM GMBH TRADEMARKS (“GFM”) applied for the registration of the “” mark in November 2020, designated for use on “Footwear; Boots; Shoes; Sandals; Boot uppers; Insole; Soles for footwear; Fittings of metal for footwear” products. The CNIPA cited 9 prior marks of “,” “,” “,” “,” “,” “,” “,” etc. co-owned by “DR.MARTENS” INTERNATIONAL TRADING GMBH and “DR.MAERTENS” MARKETING GMBH (“DR. MARTENS”) in refusing the Disputed Mark from registration. GFM appealed. During the refusal review, the CNIPA found that the Disputed Mark and the Cited Marks 1 to 9 constituted similar marks used on identical or similar goods. Although GFM provided a signed consent letter with DR. MARTENS, the Disputed Mark was relatively similar to the Cited Marks, and the likelihood of confusion and misidentification by the relevant public cannot be ruled out, so this evidence was not accepted.

GFM appealed to the Beijing Intellectual Property Court and submitted its shareholder list which showed that each of the DR. MARTENS is 25% shareholder.

The first instance court held that since the distinctive part of the Disputed Mark “MARTENS” appeared in the distinctive parts of Cited Marks, the Disputed Mark and each of the Cited Marks share relatively high degree of similarity. Regarding the proof of affiliation of the Cited Marks’ owners submitted by GFM, considering that they each hold 25% of GFM’s shares and 50% in total, they are not the controlling shareholder. Their correlation was not strong enough. For the Disputed Mark and the Cited Marks with such a high degree of similarity, the relevant public was likely to confuse them, so it should be determined that the Disputed Mark and the Cited Marks constituted similar trademarks.

GFM appealed to the Beijing High Court where the court handed down the final judgment.

In its decision, the second instance court stated that consent letter shall be genuine, legitimate, and valid, and shall not damage national interests, social public interests, or the legitimate rights and interests of third parties. According to the legislative intent of the trademark law, it should not only protect the interests of the trademark owner, but also protect the interests of consumers. Therefore, in administrative cases of trademark right authorization and confirmation, if the mark sign of the Cited Mark and the Disputed Mark are identical or basically identical, and when used in identical or similar services, a consent letter cannot exclude the application of Article 30 of the Trademark Law.

Although GFM submitted a consent letter, the signs of the Disputed Mark and the Cited Marks shared a relatively high degree of similarity and were basically identical. Therefore, the consent letter cannot be used as a means of excluding possible confusion of the source of goods between the Disputed Mark and the Cited Marks. Although the applicant for the Disputed Mark and the registrants of the Cited Marks are affiliated companies, they are still different entities. This was not a factor to be considered in Articles 30 and 31 of the Trademark Law. Therefore, GFM’s grounds for appeal could be established, and this court did not support it.

2. The Beijing High Court: Abandoning parts of designated services in a litigation does not affect the scope of judicial review

Tencent Technology (Shenzhen) Co., Ltd. (“Tencent”) applied for the registration of the “” mark (“Disputed Mark”) in Class 42, and was first approved in “Research and Development of New Products for others; Dress designing; Graphic arts design,” and refused in “Styling [industrial design]; Design of interior decor; Computer software design; Design and development of computer game software; Software as a service [SaaS]; platform as a service [PaaS].” Among them, the Cited Mark 1 “QUANTUM” blocked the service “Styling [industrial design],” and the rest of the services were blocked by the Cited Mark 2 “QUANTUM in Chinese.” After review, the CNIPA still decided to refuse the Disputed Mark on those rejected services.

Tencent appealed. The first instance court determined that the Disputed Mark and the Cited Marks 1 and 2 constituted similar trademarks used in identical or similar services. Although Tencent submitted evidence in an attempt to prove that the Disputed Mark was relatively famous, the court deemed that as the two Cited Marks’ owners did not participate in the case, Tencent’s evidence was all unilateral evidence, which was not enough to prove that the Disputed Mark can be distinguished from the two Cited marks via use. Therefore, the court dismissed Tencent’s claim.

Tencent further appealed to the Beijing High Court; in its appeal, Tencent claimed that it shall waive the Disputed Mark on “Styling [industrial design]” services, so the Cited Mark 1 should no longer constitute an obstacle.

The second instance court held that, in view of Tencent’s abandonment of the “Styling [industrial design]” service in the second instance lawsuit, the other services on review did not constitute similar to those services under the Cited Mark 1, and the Cited Mark 1 could no longer block the Disputed Mark from registration.

As of the end of the second instance trial, the Cited Mark 2 is still a valid prior registered trademark, and the Disputed Mark and the Cited Mark 2’s distinctive identification part “QUANTUM in Chinese” are similar in terms of text composition, call, meaning, etc., and their coexistence may easily lead to confusion among the relevant public. Therefore, the Cited Mark 2 constituted a prior right obstacle against the Disputed Mark for all the services under appeal except “Styling [industrial design].”

This case is an administrative lawsuit to review the legality of the sued CNIPA decision, and the situation of the Cited Mark 2, which is pending in other proceeding, does not fall into the situation where the lawsuit must be suspended according to the Administrative Procedural Law and relevant judicial interpretations. The court did not grant Tencent’s request to suspend the trial. Therefore, the court made a judgment in May 2022 to reject Tencent’s appeal.

Tencent later petitioned for a re-trial and submitted the trademark gazette published on September 13, 2022, proving that the the Cited Mark 2 had been de-registered, and requested the court to revoke the sued decision and the first and second instance judgments based on these changes in circumstances.

The retrial court held that, regarding the Cited Mark 2, according to the facts found by this court, after the second instance judgment was made, the CNIPA has issued a publication of cancellation of the Cited Mark 2, and it no longer constituted an obstacle to the Disputed Mark’s registration.

However, regarding the determination of the Cited Marks in this case, Tencent claimed that it had explicitly abandoned the “Styling [industrial design]” service, so the Cited Mark 2 was the only cited mark in this case. In this regard, this court found that the Trademark Law did not clearly regulate regarding a trademark applicant’s “abandonment” of certain goods or services during an examination of a trademark application. The “abandonment” of the application for certain goods or service items is essentially where the applicant deletes the designated goods or services. According to the relevant provisions of the Trademark Law and the Regulations for the Implementation of the Trademark Law, if an applicant deletes certain designated goods or services, it shall follow the statutory procedures for amendment. Therefore, if a trademark applicant fails to perform such procedure, the so-called “waiver” statement has no legal effect and cannot change the scope of examination by the competent trademark registration authority. The range of goods or service items designated for use at the time of application shall be reviewed, and a review decision shall be made in accordance with the law. The trial scope of an administrative litigation for a trademark refusal is limited by the scope of the administrative action and should not exceed the scope of the administrative action being sued. On the premise that the administrative authority fails to take corresponding administrative actions on the application for deletion of designated goods or service items, no matter whether the application is filed in the name of abandoning the application for registration of the disputed mark on some designated goods or service items, or in other names, these actions are not subject to the trial scope of the people’s court because they have not been handled by administrative actions. The court should not directly accept the applicant’s application, in any form, for goods/service deletion during a court proceeding, and should not exclude, on such basis, theexamination of whether the Disputed Mark falls under the circumstances specified in Article 30 of the Trademark Law relative to all or some of the Cited Marks.

In the second instance of this case, Tencent stated that it had waived the application for the registration of the Disputed Mark on the reviewed service of “Styling [industrial design],” and claimed that the Cited Mark 1 no longer constituted an obstacle to the Disputed Mark, leaving Cited Mark 2 being the only obstacle. This claim lacks legal basis and should not be supported according to law.

On this point, the second instance judgment made an error in the application of the law, which was corrected in the retrial.

Since the CNIPA should make a re-examination decision, the retrial court cannot predict in this case what the status of the Cited mark 1 would be at the re-examination and whether it still constitutes a prior right obstacle to the registration of the Disputed Mark. Therefore, on the question of whether the Disputed Mark should be preliminarily approved and published, this court will not comment at this time. If Tencent was not satisfied with the re-issued decision made by the CNIPA, it can file a lawsuit in another case according to the law.

3. Overview of IPR crimes in the first half of 2023

The Supreme People’s Procuratorate recently released data showing that in the first half of 2023, procuratorial organs across China accepted, examined, and prosecuted 11,675 people for intellectual property infringement crimes, a year-on-year increase of 36.1%.

Among them, 10,384 people committed trademark infringement crimes, accounting for 88.9% of the intellectual property infringement crimes. Cases concerning cigarettes, liquor, food and health care products, daily chemical products, clothing, luggage, and other traditional areas of people’s livelihood that are closely related to daily life are still relatively frequent. In some cases, trademark infringement is intertwined with the crime of producing and selling counterfeit and inferior products, and with the crime of endangering food and drug safety. In addition, crimes of infringement of trademark rights are gradually spreading to emerging industries, and criminal activities such as selling refurbished electronic products as new products and manufacturing and selling counterfeit auto parts have increased. Some criminals take advantage of the characteristics of “immediacy” and “wide audience” of live broadcasts to sell fakes through “live streaming” and “mixing authentic and fake products.”

In addition, in digital environment, the dissemination of literary works, audio-visual works, musical works, computer software and other works is easier and rapid, accordingly the number of copyright infringement-related cases has increased, and the criminal methods have become more technical.

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