Weekly China Trademark News Updates

March 22, 2023

1. Louis Vuitton successfully fend off the “LK & Design” mark

Disputed Mark	Cited Mark 1	Cited Mark 2
Reg. No. 28085116	Reg. No. G1249344	Reg. No. 241081

The Beijing High Court recently concluded an administrative trademark invalidation between the appellant Guangzhou Xiangfei Leather Goods Co., Ltd. (“Xiangfei”) and Louis Vuitton. The court dismissed the appeal and upheld the original judgment.

The issues of this case are: 1. Whether the Disputed Mark and the Cited Marks 1 and 2 constitute similar trademarks used on the same or similar goods as stipulated in Article 30 of the 2013 Trademark Law; 2. Whether the registration of the Disputed Mark violates the first paragraph of Article 44 of the 2013 Trademark Law.

Regarding issue 1: the court found that the approved goods of the Disputed Mark and the approved goods of the Cited Marks for leather, imitation leather and articles made therefrom all fell into class 18. Moreover, the goods’ function, use, manufacturing department, sales channel, target consumers, etc. were identical, which constituted as identical or similar goods. The Disputed Mark is a combination mark consisted of “LK” inside a circle. The Cited Mark 1 consisted of “LV” in a circle. The Cited Mark 2 consisted of only “LV.” The composition elements, methods and overall appearances of the Disputed Mark and the Cited Marks were similar. There were no distinctive differences between the two in terms of their meanings. When viewing them in isolation, the relevant public would easily mistake that the source of the goods of the Disputed Mark and the Cited Marks came from the same source of there were certain associations when paying general attention. Thus, the Disputed Mark constituted as a similar mark approved on identical or similar goods with the Cited Marks’ approved goods. This court affirmed that the Disputed Mark violated Article 30 of the 2013 Trademark Law.

In addition, Xiangfei claimed its rights from its prior registered “Lan Kou in Chinese LANKOU” mark with Reg. No. 15090726 and that the Disputed Mark was individually created by Xiangfei and was an extension of its copyright. The court found that trademark registrants enjoy exclusive trademark rights to each of the individual trademark they own. Trademarks registered in succession do not enjoy extended associations. Additional trademarks filed for defensive purpose on the basis of a registered trademark should not disrupt the established order of trademark registration, and in particular, it should not constitute the same or similar trademark used on the same or similar goods with the trademark that others have previously applied for registration. Whether Xiangfei owned the copyright of the Disputed Mark was not the basis for judging whether the trademark violates Articles 30 and 31 of the 2013 Trademark Law. Accordingly, Xiangfei’s relevant grounds for appeal cannot be established.

Regarding issue 2: the court found that among the dozens of trademarks filed by Xiangfei, not only were there a large number of copy and imitation of Louis Vuitton’s well-known trademarks, but also copy of “GUCCI” and “LANCOME” and other relatively well-known brands. Xiangfe’s application for registration of a large number of trademarks, including the Disputed Trademark, not only violated the principle of good faith, but also disrupted the order of trademark registration, damaged the public interest, and hindered the order of trademark registration management, which constituted as the circumstance of “obtaining registration by other improper means” as stipulated in the first paragraph of Article 44 of the 2013 Trademark Law. The judgment of the first instance court was correct and should be upheld.

2. The “Brks” mark was found similar to “BROOKS”

Disputed Mark	Cited Marks
Reg. No. 21013704	Reg. No. 262644        Reg. No. 7057423        Reg. No. 7069726                          Reg. No. 7069727        Reg. No. 18163412

The Beijing High Court recently concluded an administration trademark invalidation dispute between the appellant Putian Jianbu Industry and Trade Co., Ltd. (“Jianbu”), the appellee CNIPA, and the third party in the original trial, Brooks Sports Inc. (“Brooks”). The court rejected the appeal and upheld the original judgment.

Regarding to issue 1: since Cited Marks 2 and 3 have been canceled on all approved goods, they no longer constituted a prior right obstacle to the Disputed Mark’s application. Goods such as “clothing; shoes” designated by the Disputed Mark and “clothing; shoes (things worn on the feet); shoes” and other goods approved and used by the Cited Mark 1, 4, and 5 fell into identical or similar class according to the CNIPA Classification. The two were relatively similar in terms of functional use, production department, sales channel, consumer objects, etc., so the designated use of the goods under the Disputed Mark and the approved use of the Cited Mark 1, 4, and 5 constituted as identical or similar goods. The first instance court found that there was no obvious inappropriateness in finding that the two constituted the same goods. The Disputed Mark was composed of the letters “Brks”; the Cited Mark 1 was composed of the letters “BROOKS”; the Cited Marks 4 and 5 were composed of the letters “BROOKS” and design, and the letter “BROOKS” is one of the distinctive identification parts. Simultaneous use of the Disputed Mark and the distinguishing part of the Cited Marks on similar goods may cause confusion and misidentification by consumers, which violates the provisions of Article 30 and Article 31 of the 2013 Trademark Law, and the first instance court was correct.

Regarding issue 2: according to the evidence on file, Jianbu applied for several trademarks similar to the Disputed Mark for goods in Class 25 and services in Class 35. These marks included “Jordan,” “Nike,” “Converse,” “Delhui,” and other trademarks that are identical or similar to other people’s prior trademarks. Such registrations have obviously exceeded the normal production and operation needs, and Jianbu failed to submit evidence to prove that it has made commercial use of the above trademarks or has a genuine intention to use them. Taking the above factors into consideration, Jianbu’s misconduct occupied public resources and disrupted the normal order of trademark registration. The original judgment and the sued ruling found that the Disputed Mark’s application fell under the circumstance of “obtaining registration by other improper means” as stipulated in Article 44, Paragraph 1 of the 2013 Trademark Law should be affirmed.

3. The “Pampers & Design” mark was recognized as a well-known mark for cross-class protection

Disputed Mark	Cited Mark 1	Cited Mark 2
Reg. No. 20494723	Reg. No. 1564432	Reg. No. 11214847

The Beijing High Court recently concluded an administrative trademark invalidation between the appellant Fujian Guaiqiao Maternal and Baby Products Co., Ltd. (“Fujian Guaiqiao”), the appellee CNIPA and the third party in the original trial, Procter & Gamble Co., Ltd. (“P&G”). The court dismissed the appeal and upheld the original judgment.

The issues of this case are: 1. whether the approved use of the goods of the Disputed Mark such as “sanitary napkins, disinfectant wipes, baby diapers, incontinent diapers, sanitary pads, incontinent absorbent pants, baby diapers, and sanitary underwear” violates Article 30 of the 2013 Trademark Law; 2, whether the approved use of the Disputed Mark on “medical nutritional products and pesticides” violates the provisions of Article 13, Paragraph 3 of the 2013 Trademark Law.

Regarding issue 1: regarding similarity of goods, in view of Fujian Guaiqiao did not dispute the similarly between the approved goods of the Disputed Mark for “sanitary napkins, disinfectant paper towels, baby diapers, sanitary pads, incontinence absorbent pants, baby diapers, sanitary underwear” and those approved under the Cited Marks 1 and 2 as identical or similar goods, the court now affirmed such findings. The “incontinence diaper” goods approved for use under the Disputed Mark and the approved goods under the Cited Marks 1 and 2 fell into Part 1 of subclass 0506 in the CNIPA Classification. The functional use, manufacturing department, sales channels, and other aspects are highly overlapped and constituted similar goods. In terms of trademark similarity, the Disputed Mark is a word mark composed of foreign language “Pannters.” The Cited Marks 1 and 2 were both graphic-text trademarks composed of foreign language “Pampers” and a heart-shaped pattern, among which “Pampers” was a distinctive identification part of the marks. The Disputed Mark “Pannters” and the distinctive part “Pampers” of the Cited Marks 1 and 2 were similar in letter composition, arrangement, and pronunciation, and the overall visual effects of the Disputed Mark and the Cited Marks 1 and 2 were also relatively similar. If used on identical or similar goods, it was easy for the relevant public to believe that the goods used on the said marks came from the same entity subject or that there was a specific connection between the two, resulting in confusion and misunderstanding. The evidence submitted by Fujian Guaiqiao was not sufficient to prove that before the filing date of the Cited Marks 1 and 2, the Disputed Mark had gained a certain reputation and enabled the relevant public to distinguish it from the Cited Marks 1 and 2. Therefore, the Disputed Mark was identical or similar to the Cited Marks 1 and 2 for “sanitary napkins, disinfectant paper towels, baby diapers, sanitary pads, incontinent absorbent pants, baby diapers, sanitary underwear, incontinent diapers.” The registration of a similar mark on identical or similar goods violated the provisions of Article 30 of the 2013 Trademark Law and should be invalidated.

Regarding issue 2: evidence such as sales data, sales invoices, advertisements, media reports, and protected records submitted by P&G in this case can prove that before the filing date of the Disputed Mark, through P&G’s long-term, extensive and continuous publicity and use, the goods “baby diaper” under the Cited Mark 2 has been widely known to the relevant public in China and has reached a well-known level. The Disputed Mark was similar to the text of the distinctive part of the Cited Mark 2, which constituted an imitation. Although the “medical nutritional products and pesticides” goods approved for use under the Disputed Mark and the “baby diapers” goods for which the Cited Marks were well-known fell into different Class in the CNIPA Classification, but the relevant public overlapped. In the case that the Cited Mark 2 has reached the level of well-known on the goods of “baby diapers” and the Disputed Mark constituted an imitation of the Cited Mark 2, use of the “medical nutrition, pesticides” goods under the Cited Mark was likely to cause the relevant public to mistakenly believe that the Disputed Mark has a considerable degree of connection with the Cited Mark 2 and thereby weakening or diluting the distinctiveness of the Cited Mark 2 or improperly using its market reputation, resulting in damage to P&G’s right to the already well-known Cited Mark 2. Therefore, the registration of the Disputed Mark on “medical nutritional supplements and pesticides” violated the provisions of Article 13, Paragraph 3 of the 2013 Trademark Law, and should be invalidated. Guaiqiao’s other relevant grounds for appeal were untenable and the court did not support it.

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Weekly China Trademark News Updates

March 15, 2023

1. The CNIPA issued the “Guidelines for Handling Administrative Intellectual Property Service Matters”

On March 10, 2023, the CNIPA issued the “Guidelines for Handling Administrative Intellectual Property Service Matters” that materialized the basis, application documents, and conditions when handling patents, trademarks, and geographic indications, etc. The purpose of the Guidelines aims at providing non-discriminatory administrative services in accepting applications, handling using identical standards, and realizing the convenience, speed, fairness, inclusiveness, high quality and efficiency of administrative services.

2. Hermes won RMB 2 million in damages – using “Hermes in Chinese” as a real estate name constitutes of trademarks infringement and unfair competition

Hermes International (“Hermes”) sued Shandong Hugang Jianye Real Estate Development Co., Ltd. (“Hugang Jianye”) for trademark infringement and unfair competition. The first instance court found that Hermes’ trademark “Hermes in Chinese” with reg. no. 1636601 and “” mark with reg. no. 1708652 are approved in Class 18 for “leather, leather bags, travel bags, harnesses” and so on.

Regarding trademark infringement, Hugang Jianye promoted “Hermes in Chinese Themed Apartments” on its “Huganghui” WeChat public account since January 2019. According to the evidence submitted by Hermes, the court comprehensively considered relevant public’s understanding to the Cited Marks, the time, duration, and geographical area of the actual use and promotional duration of the Cited Marks, and the Cited Marks’ multiple recognitions as a well-known mark prior to Hugang Jianye began using the Disputed Marks. The court found that Hermes has been continuously using its Cited Marks for 20 years and have extensively, broadly, and massively used, promoted, and marketed its Cited Marks. Hermes’ Cited Marks enjoy very high reputation and influence and are well-known to the public, which shall be recognized as well-known marks in Class 18 for leather bags, travel bags, and other goods. During its real estate construction and sales, Hugang Jianye used “Hermes in Chinese Themed Apartments” as its real estate’s name to promote and for sales. It highlighted the use “Hermes in Chinese” and “HERMES” in its building protective net, billboards on exterior walls, peripheral shielding boards. Hugang Jianye prominently used “HERMES” and “” on the large electronic screen outside of its sales center and exhibition stand. In the “Hermes in Chinese Themed Apartment” promotional pages, floor plans, and model room decoration, the “Hermes in Chinese”, “HERMES,” and “” logos were prominently used. Promotional articles, videos, and photos about “Hermes in Chinese Themed Apartments” were published on the WeChat public account of Hugang Jianye where the Cited Marks were prominently used. Hugang Jianye named the real estate as “Hermes in Chinese Themed Apartments” and prominently used the above-mentioned accused logo in commercial activities such as the construction, sales, exhibition and advertising of commercial housing, which played a role in identifying the source of goods, which fell under the provisions of the Trademark Law as trademark use. Through comparison, the “Hermes in Chinese” logo that was prominently used by Hugang Jianye was identical with Hermes’ Cited Mark. And the logo used by Hugang Jianye was also identical to Hermes’ Cited Mark. The “HERMES” logo used by Hugang Jianye was similar to the English letters in Hermes’ “” mark, which constituted as s similar mark. Consider Hermes’ Cited Marks have reached well-known status, relevant public can readily associated with Hermes’ and its brands upon hearing or seeing its Cited Marks. Thus, Hugang Jianye’s use of the Disputed Mark during construction, promotion, and sales for its real estate business activities was sufficient to confuse the relevant public that the disputed real estate came from Hermes or mistaken that Hugang Jianye has special connection or licensing relationship with Hermes. Moreover, Hugang Jianye directly used “Hermes in Chinese” as its apartment name for extensive promotion can be seen as to have subjective bad faith in taking advantage of other’s well-known mark and goodwill, which will diminish the distinctiveness of Hermes’ well-known mark, and unfairly exploited Hermes’ well-known marks’ market reputation, obtain unjustified interests, and damage Hermes’ legitimate interests. The court found that Hugang Jianye’s copy and imitation of Hermes’ well-known marks in different goods constituted as trademark infringement.

Regarding unfair competition, first, Hugang Jianye knew it did not have any license or connection with Hermes but deliberately emphasized the similarity or continuation relationship between its “Hermes apartment” and “Hermes” brand in terms of craftsmanship and design concepts. It also stated that the furniture and decoration in the apartment use Hermes brand and style products, and its behavior may mislead consumers into thinking that there is a connection between the two. Second, Hugang Jianye deliberately used words such as “French in Chinese,” “imported,” and “century-old luxury brand” in its publicity, and described the apartment involved as a luxury, thereby further deepening its connection with Hermes. Its intention to take advantage of Hermes’ popularity was extremely obvious. Third, combined with Hugang Jianye’s publicity and promotion of the project involved as “Hermes in Chinese Themed Apartment,” a large number of “Hermes” logos were used, and Hermes brand products, decorations and other behaviors were placed in the sales center and model rooms, these actions showed that it had the intention to mislead the relevant public. Therefore, Hugang Jianye’s publicity behavior is to promote products in ambiguous language or other misleading ways, which may easily cause confusion and misidentification of the relevant public. It was a misleading commercial publicity and constitutes unfair competition. Hugang Jianye used the Hermes classic orange design and classic logos such as the big “H” and horse design in the decoration of the apartment model room, and placed many Hermes products, which was enough to make the relevant public further mistakenly believe that the accused “Hermes Apartment” did come from Hermes or there was a specific relationship. The use of the above-mentioned logos or elemental products and decoration by Hugang Jianye was a comprehensive imitation of the trademark and brand of Hermes. Compared with simply using Heremes’ Cited Marks, Hugang Jianye’s use was more likely to cause confusion and misidentification to the relevant public, which further proves that its intention to cling to Hermes and the popularity of its trademark. Therefore, Hugang Jianye’s actions constituted as unfair competition that was enough to cause confusion.

Accordingly, the first instance court ordered Hugang Jianye to compensate Hermes economic loss and reasonable legal costs of RMB2 million (USD289,943). The second instance court later affirmed the first instance ruling.

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Weekly China Trademark News Updates

March 7, 2023

1. The CNIPA commented on the Draft Amendment of the China Trademark Law at February routine press briefing

On February 22, the CNIPA held its routine press briefing where the CNIPA commented the following six points on the Draft Amendment of the China Trademark Law.

First, complying with the development requirements of the new era, which includes adding the new chapter “Conditions for Trademark Registration” to clarify registration requirements, strengthen trademark use, brand building, public services, etc.

Second, further maintaining social fairness and justice and the fair competition market order by means of, among others, clarifying the circumstances of bad faith trademark applications and legal responsibilities, introducing compulsory transfer of trademarks and public interest litigation systems, systematically regulating trademark squatting, stipulating the principle of prohibiting the abuse of rights, adding the system of counter-compensation for bad faith litigation, and defining the boundaries of trademark rights.

Third, optimizing the procedures for trademark authorization and confirmation so as to regulate repeated and cyclical registration of the same trademark that has existed for a long time, solve the problems of repeated cases, idling procedures, and low efficiency that have plagued practice for a long time, effectively protect the interests of right holders and consumers, and promote overall improvement of the quality and efficiency of trademark examination and trial.

Fourth, continuing to strengthen the obligation to use trademarks, with hopes to provide guidance to trademark registration to return to the system origin of “registration for use,” clear up idle trademarks, and solve the difficulties in obtaining trademark registration for market players.

Fifth, strengthening the protection of legal prior rights and well-known trademarks and to resolutely crack down on trademark infringement and unfair competition behaviors such as taking advantage of goodwill of famous brands, taking advantage of fame of famous brands, free-riding on famous brands’ popularity, and infringing on other people’s prior rights.

Sixth, enhancing the ability of collaborative governance in the field of trademarks via improving administrative law enforcement measures and increasing penalties for trademark violations, setting out access requirements for trademark agencies to improve service levels, strengthening the connection between administrative and judicial procedures, strengthening credit supervision and credit punishment, and purify the market environment.

2. Country Home invalidated squatter mark based on copyright

Country Home Product Inc. (“CHP”) tried to register its logo “” on lawn mowers and trimmers, etc. in China in April 2018, but was rejected due to a prior mark “” (“Disputed Mark”) registered by a Chinese national in August 2014.

CHP first filed a non-use cancellation against the Disputed Mark and later filed an invalidation on the last day of the five-year time limit. The validity of the Disputed Mark was sustained in the non-use cancellation. The CNIPA, however, found in the invalidation action that the Disputed Mark damage CHP’s prior copyright and invalidated it. The owner of the Disputed Mark appealed the case to the Beijing IP Court.

CHP participated actively  in the administrative lawsuit as a third-party. CHP provided additional evidence including its official website introductions and Chinese translation thereof, screenshots of promotional materials of CHP’s artwork on Facebook, use evidence submitted before the USPTO when CHP renewed its US registration of “DR” mark, promotional advertisements, media report, and other materials to prove its prior rights. CHP also provided the corporate information of a company owned by the Disputed Mark’s owner to prove that the Disputed Mark owner resided in the same industry as CHP and had access to CHP’s logo.

The Beijing IP Court found that CHP’s “DR” artwork constituted as a protectable artwork under the China Copyright Law. CHP has the prior copyright of its artwork. The Disputed Mark was nearly identical with CHP’s prior copyrighted artwork and the two are substantially similar. Under such circumstance, the Disputed Mark damaged CHP’s prior copyright and violated “other’s existing prior right” as stipulated in Article 32 of the China Trademark Law2013.

The Disputed Mark owner was not satisfied with the Beijing IP Court’s decision and further appealed to the Beijing High Court. The Beijing High Court rendered the final decision for this case on February 28, 2023.

The Beijing High Court found that: first, the artwork claimed by CHP consisted of DR in silver with an orange-red ball-shaped background, with the words “PROFESSIONAL POWER FOR HOME OWNERS” surrounding the said design in a sliver circle. Such design can be seen as original and has constituted as an artwork under the Copyright Law.

Second, product manual, trademark certificates, trademark use and other evidence submitted by CHP can be used to prove that prior to the application date of the Disputed Mark, CHP had completed its artwork. CHP therefore enjoys prior copyright to its artwork.

Third, the Disputed Mark and CHP’s prior created artwork were nearly identical in terms of composition, English letters combination, etc. with slight differences in color.

Forth, the Disputed Mark’s owner resided in the same industry with CHP and therefore should’ve known about CHP’s prior artwork. However, the Disputed Mark’s owner did not pay reasonable attention to avoid conflict, but intended to register the Disputed Mark that was nearly identical with CHP’s prior artwork with designated goods such as “agricultural machinery, harvesting machinery, and cutting machines” that overlapped with the business scope of CHP. Such behaviors can hardly be justified.

Accordingly, the registration of the Disputed Mark constituted as copying other’s work without authorization, damaged CHP’s prior copyright, violated Article 32 of the 2013 Trademark Law. The CNIPA and the Beijing IP Court’s decisions were affirmed.

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Weekly China Trademark News Updates

March 1, 2023

1. CFA Institute successfully invalidated the “CVA” mark

Recently, the Beijing High Court concluded an administrative dispute concerning the invalidation of the “CVA” mark (“Disputed Mark”) owned by Huaping (Beijing) International Management Consulting Co., Ltd. (“Huaping”). The court upheld the first-instance judgment, that is, the application for registration of the Disputed Mark violated Article 30 and 31 of the 2014 Trademark Law and that the Disputed Mark shall be invalidated.

Disputed Mark	Cited Marks

Huaping applied for the Disputed Mark on December 25, 2017 and was approved for poster, book, printed publication, brochure, periodical, magazine (journal), printed matter, brochure, leaflet, and certificate in class 16.

CFA Institute filed invalidation based on its prior rights.

The second instance court found that the Disputed Mark consisted of “CVA” word marks. The Cited Marks consisted of either the “CFA” mark or other “CFA”-formative word mark or design mark. Consider “CFA” is not a fixed combination of words, it has no direct or certain connection with the approved goods. Thus, “CFA” is the distinctive part of the Cited Marks. There is only one letter difference between the Disputed Mark and the distinctive parts of the Cited Marks. Regardless of their overall comparison or comparison of the distinctive parts, the Disputed Mark and the Cited Marks were relatively similar in terms of composition, pronunciation, and overall appearance, which constitute similar marks. If the Disputed Mark and the Cited Marks were used on identical or similar goods, the relevant public may easily confuse and misidentify the source of the goods when paying general attention. Thus, the Disputed Mark and the Cited Marks constitute as similar marks on identical or similar goods. The evidence submitted by Huaping was not sufficient to prove that the Disputed Mark can be distinguished from the Cited Marks through use. In addition, the CNIPA review adopts the principle of case-by-case review, which can be affected by various conditions such as formation time, formation environment, and evidence on file. Application, examination, and approval of other marks were not necessarily related to this case, and cannot be used as the basis to decide the outcome of this case. This court affirmed the CNIPA and the first instance judgment that correctly decided the application of the Disputed Mark violated Article 30 and 31 of the 2014 China Trademark Law.

2. Awarded RMB1.1 million in damages! The Zhejiang High Court: Determine the amount of damages based on the compensation standard agreed in the settlement agreement

The Zhejiang High Court recently concluded  second instance anti-unfair competition dispute between Shenzhen Xiaoerduo Power Co., Ltd. (“Xiaoerduo”), Wenzhou Cricket Electronic Technology Co., Ltd. (“Cricket“), Quanyi Electric Co., Ltd. (“Quanyi”), Wenzhou Cricket Electronics Co., Ltd. Yueqing Branch of Science and Technology Co., Ltd. (“Wenzhou Cricket”), and Zhejiang Quanyi Electric Co., Ltd. Yueqing Branch (“Zhejiang Quanyi”). The court rejected the appeal petition and affirmed the first instance decision that ordered Cricket to immediately stop infringement and compensate Xiaoerduo for economic loss of RMB1.1 million (USD158,540).

The second instance found the following:

Xiaoerduo accused Cricket and Quanyi of using the accused infringing logo on the switching power supply, remote controller products and product promotions involved in the case, infringing the exclusive trademark right of its “XED” mark with reg. no. 13561563 and the “XED” mark with reg. no. 15067930. Cricket and Quanyi appealed and claimed their use did not constitute trademark use. In this regard, this court found that the tear-proof sticker marked “ZJXED” is located on the body of the switching power supply, and whether the tear-proof sticker is functional does not affect the function of the label to be used to identify the source of the product. As for whether “XEDYK-32II 3-phase” is a typical low-voltage electrical product model, Cricket and Quanyi did not provide evidence to prove it. Even if it was true, the letter combination of “XEDYK” is obviously not a common model number, even if the suffix “-32III3 phase” was added, it can also be used to identify the source of the marked goods, which constituted trademark use. The allegedly infringing goods were switching power supplies and remote controllers, which were identical or similar to the approved goods under the Cited Marks. Both the Disputed Mark and the Cited Marks consisted of a combination of “XED.” The primary function of the “XED” letter is a combination of the initials of the Chinese pinyin of the “Xiao Er Duo” brand name. The marks were identical in terms of composition, order, and pronunciation. At the same time, considering that the evidence submitted has a certain reputation in the industry, it should be determined that the Disputed Mark was similar to the Cited Marks, which may easily led to confusion among relevant consumers. With regard to the claims of Cricket and Quanyi that the use of the Disputed Mark was an omission in rectification, and there was no subjective intentional and necessary infringement, and, objectively, there was no possibility of confusion. Consider there was already a first-instance lawsuit in previous case between the companies and a settlement agreement was reached in second instance trial, and the time for cessation of infringement and the amount of compensation for further infringement were clearly stipulated, Cricket should have a higher duty of care to avoid subsequent trademark infringement. After the rectification period promised in the settlement agreement, the continued use of the Disputed Mark could hardly be called as good faith, and it was easy to confuse consumers. Therefore, the appeal grounds of Cricket and Quanyi could not be supported. The first instance court did not err in finding that Cricket infringed upon Xiaoerduo’s trademark rights.

The evidence submitted showed that Xiaoerduo has been using “Xiaoerduo in Chinese” as its trade name since February 19, 2008. Through long term and extensive publicity and use, its enterprise name (trade name) has formed a certain fame in the industry and obtained certain market influence. In particular, before Cricket was founded, Xiaoerduo and its related products have already been sold in Zhejiang province, including Wenzhou, where Cricket was located. Cricket and Quanyi claimed that Xiaoerduo has trade name dispute with other third parties which would affect the recognition of its fame. Xiaoerduo, however, provided evidence during the first instance that its trade name was legal and has certain fame. Cricket and Quanyi failed to prove in the contrary. Thus, Cricket and Quanyi’s claim cannot be supported. Cricket also defended by claiming that it has been changing its trade name prior to this case and it was normal to have omissions, and it has no intention to infringe Xiaoerduo. This court found that Cricket knew about the enterprise name and trade name of Xiaoerduo during previous lawsuits and settlements and undertook to change. However, Cricket still used trade names that include “Xiaoerduo” such as “Xiaoerduo Electronic Technology Co. Ltd.,” “Xiaoerduo Electronic Technology Co. Ltd., Leqingfen Company” in its marketing activities. Such use would objectively cause consumer to believe it was Xiaoerduo’s marketing activities. Cricket did not fulfill its duty of care. In particular, Cricket issued invoiced with “Xiaoerduo Electronic Technology Co. Ltd., Leqingfen Company” as its invoice title showed that it was not an omission but an unfair competition aimed at Xiaoerduo.

Regarding whether punitive damages was applicable in this case, the court found that since this case involves trademark infringement and anti-unfair competition disputes, so the nature of the liability involved is infringement damages rather than breach of contract damages. However, the relevant parties’ agreement on the amount of compensation for continued infringement in the settlement agreement of the previous case can be an important consideration for the amount of damages awarded in this case. Xiaoerduo did not require separate calculation of the amount of damages for trademark infringement and unfair competition in its complaint, and the actual losses suffered by Xiaoerduo due to the infringement and the specific benefits obtained by Cricket and Quanyi due to infringement were difficult to determine. According to the relevant provisions of China Trademark Law and China Anti-Unfair Competition Law, it was not inappropriate for the first instance court to apply statutory damages that included trademark infringement and unfair competition to Xiaoerduo. Xiaoerduo’s claim that the damages ordered did not reflect damages of unfair competition in the first instance judgement could not be supported. Comprehensively considering the company name of Xiaoerduo and the popularity of the Cited Marks, Cricket has infringed in both JD.com and Tmall online stores. The behavior of Quanyi in Tmall Store constituted joint infringement with Cricket. The sales volume of the accused infringing goods, unit price, were especially stipulated in the main body and agreed content of the previous lawsuits and the settlement agreement. Xiaoerduo paid reasonable expenses for the rights protection of this case, the first-instance judgment did not err in determining that Cricket should compensate Xiaoerduo RMB1.1 million (USD158,540)., and Quanyi should compensate the joint and several liability of RMB250,000 (USD36,039).

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

Mr. Austin Chang, counsel of Beijing East IP Law Firm, was invited to the Graduate Institute of Intellectual Property at the National Taipei University of Technology to present latest China trademark law updates and practices on February 23, 2023.

Weekly China Trademark News Updates

February 22, 2023

1. RMB 3 million in damages! Using TIGI’s thickening cream product’s unique packaging and decoration without authorization constitutes unfair competition

Recently, the Sichuan High Court concluded a unfair competition dispute between Unilever Hefei, Chengdu Yisiyun Trading Co., Ltd. (“Chengdu Yisiyun”), Chengdu Weimei Cosmetics Co., Ltd. (“Chengdu Weimei”), Guangzhou Gaojue Cosmetics Co., Ltd. (“Guangzhou Gaojue”), Chengdu Yili Cosmetics Co., Ltd. (“Chengdu Yanli”). The court affirmed the first instance judgment that the four defendants should immediately stop manufacturing and selling “Yisiyun Baby Thickening Cream” products and compensate Unilever Hefei economic losses of RMB3 million (USD436,185) and reasonable costs of RMB141,410 (USD20,560).

1. Whether the packaging and decoration of the purple ball-shaped body of TIGI’s thickening cream product plus the green pump head combination constitute as product packaging and decoration with a certain influence.

The ball-shaped bottle adopted by TIGI gave people a unique, round, cute and unique visual experience, and the combination of a bright purple bottle and green pump head can also form a strong visual impact. Such packaging decoration is extremely distinctive. Unilever Hefei has entered the Chinese market at least since 2008 and has been using the purple ball-shaped bottle and green pump head as its packaging. It has been sold through online and offline channels with high sales volume and number in a wide spectrum and received countless reviews. Through continuous publicities, reports, and recommendations by many Internet media, fashion bloggers, sellers and consumers, TIGI’s thickening cream and its unique packaging and decoration have gained a high popularity among the relevant public. Chengdu Yisiyun believed that the packaging and decoration of infringing products was not influential. There are at least dozens of similar thickening cream products adopting similar design. The infringing products do not have uniqueness and distinctiveness. The court found that there were 7 brands that have adopted the packaging and decoration involved in the case, but the sales volume was not large, neither was the popularity. Combined with the sales and publicity of TIGI’s thickening cream products, under the circumstances that Chengdu Yisiyun failed to provide sufficient evidence to the contrary, a small number of other brands using similar packaging and decoration would not necessarily cause TIGI’s products to be a common packaging and decoration for thickening cream. Accordingly, TIGI’s thickening cream product design satisfies as a product packaging that has certain influence under Article 6(1) of the Chinese Anti-Unfair Competition Law.

2. Regarding whether the defendants’ acts constitute unfair competition

In this case, the shape and color of the ball-shaped body and green head pump of the infringing products was basically identical with that of TIGI’s thickening cream in terms of overall appearance. Thus, the packaging of infringing products is identical to TIGI’s packaging that has certain influence. The packaging and design of TIGI’s thickening cream has obtained relatively high fame through long-term use, which has established a special connection with TIGI’s thickening cream and can be used to distinguish the source of a product. The target consumer and sales channels of infringing products and TIGI’s products were basically identical, and it is likely to cause confusion among the consumers.

Chengdu Yisiyun used the “EISANSUN” mark on its products that is different from the logo on TIGI’s products. There is a white document inserted inside infringing products’ packaging that labeled with Guangzhou Gaojue’s information in order to avoid possible confusion. The court found, however, that under the circumstances that infringing products and TIGI’s products were nearly identical, the use of black font on infringing products and the design details of the packaging were identical with those of TIGI’s products, simply using a different English logo could not avoid the possibility of confusion.

Accordingly, the defendants used TIGI’s influential purple ball-shaped body and green head pump combination without authorization would cause others to believe that the infringing products come from Unilever Hefei or have special relationship with Unilever Hefei, which constitute unfair competition.

2. In a retrial, the Zhejiang High Court held that an apparel style and model number can be protected under the catch-all provision of the Anti-Unfair Competition Law

The Zhejiang High Court recently concluded an anti-unfair competition retrial case between Hangzhou Jiangnan Buyi Co., Ltd. (“Jiangnan Buyi”) and Jianfei Jiang. The court revoked the second instance judgment and affirmed the first instance judgement that ordered Jainfei Jiang to compensate Jiangnan Buyi for economic loss of RMB1.5 million (USD218,016).

The “Jiangnan Buyi” mark with reg. no. 3005446 owned by Jiangnan Buyi was registered on January 21, 2003 in class 25 and is valid until January 20, 2023. The “JNBY” mark with reg. no. 1278514 was registered by Jiangnan Buyi on May 28, 1999 in class 25 and is valid until May 27, 2029. Both marks were recognized as well-known marks.

In the webstore “Jiangnan Style High Quality Women’s Clothing” store owned by Jianfei Jiang, the products link name including clothing styles and model numbers (5J9841310, 5J7820340, 5J7310620, 5J9311550, 5J9E12540, 5J8820230, 5J0710360, 5J8321500) were identical with those sold on the “Official Flagship of Jiangnan Buyi” except an additional “H” or “A” in front of the styles and model numbers. Additionally, the model numbers displayed in the other 38 clothing products links in the notarization report were identical with the clothing model numbers displayed in Jiangnan Buyi’s clothing brochure or in the “Official Flagship of Jiangnan Buyi.”

Regarding whether Jianfei Jiang’s use of clothing model styles and numbers that are identical with Jiangnan Buyi’s constitutes unfair-competition, the court found the following:

First, Jiangnan Buyi has legal competitive interests for clothing styles and models involved in the case. Although in terms of a specific clothing style, Jiangnan Buyi failed to prove that the styles are original or enjoy some exclusive rights, but as far as its clothing products were concerned, the clothing styles were their core competitiveness. It can bring more competitive advantages to a clothing company. Judging from Jiangnan Buyi’s clothing styles and model numbers, model numbers were specific numbers used to categorize products. Not only are model numbers for management of Jiangnan Buyi or relevant marketing, but they are also an important way for customers to locate clothing that fit their styles. That is, model numbers were primarily used to attract internet traffic. Relevant public can use such model numbers to search Jianfei Jiang’s clothing that share the same model numbers as Jiangnan Buyi. Jiangnan Buyi’s clothing styles and model numbers can bring competitive advantages and benefits, thus it can be protected by under the Anti-Unfair Competition Law.

Second, Jianfei Jiang’s sales of the same style as Jiangnan Buyi and the use of the same clothing styles and model numbers violated the principles of good faith and business ethics, which cannot be justified. As an operator engaged in the clothing industry, Jianfei Jiang has a direct competitive relationship with Jiangnan Buyi. Jianfei Jiang should know the important resources of the clothing styles and model numbers of clothing companies. He should also know that customers usually search for specific clothing styles or model numbers when buying clothing on the Internet. Jianfei Jiang exploited the existing corresponding relationship between Jiangnan Buyi’s clothing styles and model numbers without paying any creative labor. Jianfei Jiang simply copied Jiangnan Buyi’s clothing styles and model numbers in bulk and used the label “Jiangnan Buyi Style” on the landing page in order to take advantage of Jiangnan Buyi’s reputation. Jianfei Jian’s acts could be held to violate the principle of good faith and business ethics.

Last, Jianfei Jiang’s acts damaged the legitimate rights and interests of Jiangnan Buyi and relevant consumers, and disturbed the market competition order. Jianfei Jiang will use the same clothing styles and models as Jiangnan Buyi’s on identical or similar clothing. Jianfei Jiang will search for consumers from Jiangnan Buyi to buy their clothing to obtain unfair competition advantages. Such acts obviously encroached the trading opportunities of Jiangnan Buyi. Suh acts have substantially replaced the goods of Jiangnan Buyi, causing substantial damage to Jiangnan Buyi. In particular, given Jiangnan Buyi resides in fast fashion industry, its product life cycle is short, once the related clothing styles and model numbers are copied, it will cause great damage to the interests of product designers and manufacturers. From the perspective of consumer interests, although related consumers can buy cheaper popular clothing in a short time, if such large copy and counterfeit acts were not regulated, it will inevitably lead to the decline in original design, which would impact consumer’s interest in the long run. Combined with Jianfei Jiang using the words “Jiangnan Buyi Style” on its landing pages, some consumers may mistakenly believe that the clothing purchased from the infringing shop came from Jiangnan Buyi or there was a specific connection with Jiangnan Buyi, which caused the relevant public to be confused and mistaken.

In summary, Jianfei Jiang’s sales of identical clothing style and model numbers as Jiangnan Buyi violated the principles of good faith and business ethics, damaged the legitimate rights and interests of Jiangnan Buyi and consumers, disrupted the normal market competition order, and violated the Anti-unfair Competition Law.

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Weekly China Trademark News Updates

February 14, 2023

1. Decathlon prevailed in an unfair competition lawsuit with RMB 2 million in compensation

Recently, the Anhui High People’s Court rendered a decision for an unfair competition lawsuit in favor of Decathlon and Decathlon (Shanghai) Sports Goods Co., Ltd. (“Decathlon”), against Fujian Aoku Sports Goods Co., Ltd. (“Aoku”). The court found Aoku infringed upon Decathlon’s trademarks and its acts amounted to unfair competition. The court ordered Aoku to compensate Decathlon’s reasonable expenses of RMB 2 million (USD293,500) to stop the infringement.

The court found that considering the time when Decathlon entered the Chinese market, its business scale, publicity duration and influence of the Decathlon brand in China, the storefront decoration protection requested by Decathlon has reached the “certain influence” requirement under the Anti-Unfair Competition Law. According to the facts found in this case, it can be concluded that there were many similarities in the decoration of the two storefronts, whether it is the overall style or the selection of details, mainly including facade advertisements, posters, and sports figures. It is not easy to notice the difference between the two when the relevant public pay general attention. And it should be determined that the decorations of the two storefronts were similar. Since the overall image of the decoration used by Decathlon has distinctive features to distinguish the source of goods, the decoration used by Aoku was visually very similar to the unique decoration of Decathlon. In addition, Aoku has published many articles on its official website, saying that Aoku is the “Decathlon” in the field of sports and outdoor brand franchises, “Joining Aoku, becoming China’s Decathlon,” ” Aoku outdoor sports supermarket, China’s Decathlon,” and so on. Therefore, even if there were differences in price, quality, consumption level, etc. between the two stores, and the store signs and trademarks are different, it will inevitably make it easy for the relevant public to mistakenly believe that there was some kind of economic connection between the two parties. Therefore, Aoku’s use of the decoration involved in the case will cause misidentification and confusion to the relevant public.

Regarding the amount of compensation, Decathlon did not provide evidence to prove its losses due to the alleged infringement and the benefits obtained by Aoku due to the infringement. Considering the scale, brand and corporate popularity of Decathlon in China, factors such as operations and publicity in mainland China, the business scale of Aoku, the duration of the alleged infringement, the subjective state of the infringement, the reasonable fees paid by Decathlon to stop the infringement, etc., the court ordered Aoku to compensate Decathlon for RMB 2 million (USD293,500) for the economic losses and the reasonable expenses paid to stop the infringement.

2. The court ordered RMB10.3 million in compensation for maliciously taking advantage of the reputation of Mosaic’s “Mosaic in Chinese” trademark, trade name and packaging decorations

Recently, the Shandong High Court concluded a trademark infringement and unfair competition lawsuit for Mosaic Fertilizers (Beijing) Co., Ltd. (“Mosai”) against Qingdao Meishengyuntianhua Chemical Import and Export Co., Ltd. (“Meishengyuntianhua”), Shijiazhuang Jifengda Chemical Fertilizer Co., Ltd. (“Jifengda”), and Hebei Shendaotan Fertilizer Co., Ltd. (“Shendaotan”) (hereinafter referred to as the “Defendants”). The court found the defendants liable for trademark infringement and unfair competition, ordered RMB10.3 million (USD1.5 million) in compensation for Mosaic.

Cited Mark

Mosaic was authorized to use the “Mei Sheng in Chinese” mark and the “Mosaic & Design” mark (“Cited Marks”) owned by its parent company. The Court found that the Defendants jointly manufactured and sold the infringing products, which were identical to the approved goods under the Cited Marks. The use of the “Meisen & Design,” “Mei Shen Yun Tian Hua in Chinese” and other logos by the Defendants were trademark use. When comparing the Cited Marks with the marks and logos used by the Defendants, the composition, design style, overall visual appearances were similar, which was likely to cause confusion to the relevant public as to the source of goods. In addition, Jifengda and Shendaotan had applied for “Meisen & Design,” “Mei Shen Yun Tian Hua in Chinese” marks but were both rejected by the CNIPA. Accordingly, the Defendant’s use of the said marks and logos infringed upon Mosaic’s trademark right.

Regarding unfair competition, first Mosaic was established On December 17, 2008, earlier than April 26, 2017, when Meishengyuntianhua were established. Through operation, publicity, promotion, and use by Mosaic, fertilizers marked with the “Mosaic in Chinese” mark amassed very high market fame and was known to the relevant public. As an operator in the same field of business, Meishengyuntianhua should have known about the fame and influence of “Mosaic in Chinese,” however, it still registered “Mosaic in Chinese” as its trade name and used in actual business activities, which displayed its objective bad faith in taking advantage of Mosaic’s fame in market competition. Meishengyuntianhua’s acts constituted unfair competition. The infringed products were jointly manufactured by the Defendants, thus, the Defendants’ acts constituted unfair competition. Second, Mosaic’s packaging decoration is known to the public and formed a corresponding relationship with Mosaic that is able to distinguish the source of goods sold by Mosaic through Mosaic’s long term use and promotion. Thus, Mosaic’s packaging decoration should be recognized as to have certain influence under the Anti-Unfair Competition Law. The Defendants’ infringing products consisted identical arrangement and similar visual effect, which constituted unfair competition.

3. Jixiang Moving sued Juneyao Air for trademark infringement and requested RMB30 million in relief

Recently, the Henan High Court Province concluded a trademark infringement dispute between Jixiang Moving Co., Ltd. (“Jixiang Moving”) and Shanghai Jixiang Aviation Logistics Co., Ltd. (“Jixiang Aviation Logistics”), Juneyao Air Co., Ltd. (“Juneyao Air”). The court held that Juneyao Air’s use of “Jixiang Airlines” did not constitute trademark infringement or unfair competition. Juneyao Air’s use of “Jixiang Logistics Ruyida,” “Jixiang Luodipei,” “Jixiang produced Moutai express line” and other slogans constituted as trademark infringement. The court ordered Juneyao Air to compensate Jixiang Moving RMB1 million (USD146,700) for trademark infringement.

Cited Mark

Jixiang Moving was established in February 2004. Jixiang Moving applied for the “Jixiang in Chinese” mark in class 39 that was approved on October 28, 2006 for baggage handling, unloading, delivery, freight, furniture transport, and relocation services. Jixiang Moving alleged that Juneyao Air’s use of the same slogans constituted trademark infringement and unfair competition and requested RMB30 million (USD4.4 million) in compensation in an action against Juneyao Air.

The court found that, regarding unfair competition, Juneyao Air began using the “Jixiang’ mark on May 8, 2006 as its trade name, which was earlier than the application date of Jixiang Moving’s Cited Mark. Although Jixiang Moving claimed it has been using the “Jixiang” trademark since 2004, it failed to provide evidence proving that its mark had obtained certain fame before May 2006. Additionally, the words “Jixiang” were not fanciful words created by Jixiang Moving, it is common words used by the general public. Juneyao Air’s registration of such words as its trade name can be justified. Although Jixiang Aviation Logistics established later than Jixiang Moving, but as a wholly-owned subsidiary of Juneyao Air, its use of “Jixiang” as its trade name was reasonable. Thus, neither Jixiang Aviation Logistics’ nor Juneyao Air’s acts constituted unfair competition.

Regarding trademark infringement, although Juneyao Air has an internal freight department that handles passenger luggage consignment and related freight, which is different from professional cargo airlines. Juneyao Air and Jixiang Aviation Logistics operated individually regarding its finance, human resources used on promoting and publicity of its trade name and trademarks, which have attracted its own specific clientele. Consider the scope of business of Jixiang Aviation Logistics and Juneyao Air were very different, the evidence submitted could not prove that Juneyao Air intended to attach to the fame of the “Jixiang” mark. The evidence was also not sufficient to prove Juneyao Air intended to cause confusion or sever the connection between Jixiang Moving and the “Jixiang’ mark. Jixiang Aviation Logistics used corresponding marks on its WeChat public account and media. Juneyao Air and Jixiang Aviation Logistics used its marks on different occasions. Jixiang Aviation Logistics’s use of “Jixiang Logistics Ruyida,” “Jixiang Luodipei,” “Jixiang produced Moutai express line” and other slogans did not specify that it was based in the aviation field of business. It only showed logistics and cargo services related characteristics, which was similar to the approved services of the Cited Mark. Said acs of Jixiang Aviation Logistics would likely o sever the existing association between Jixiang Moving and the “Jixiang” mark, which would impede the mark’s function to distinguish the services of Jixiang Moving. Thus, Jixiang Aviation Logistics’s acts constituted trademark infringement and should compensate Jixiang Moving RMB1 million (USD146,700) in damages.

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Weekly China Trademark News Updates

February 7, 2023

1. The CNIPA issued the Guidelines on the Prohibition of Using Signs as Trademarks and the Guidelines on Application for Registration and Use of Trademarks Containing Geographic Names

The Guidelines on the Prohibition of Using Signs as Trademarks further explains the various circumstances where signs cannot be used as trademarks as stipulated in Article 10 of the China Trademark Law. “Not to be used as a trademark” means that in addition to registration prohibition, the use of a relevant logo as a trademark is also prohibited. For example, any application for registration of an “absolutely prohibited” relevant signs mentioned in this guideline will be rejected for violating Article 10 of the China Trademark Law. Already registered trademarks will face the legal consequences of being invalidated. Meanwhile, those that constitute bad faith trademark applications will also face punishments such as warnings and fines, and the punishment information will be published on the National Enterprise Credit Information Publicity System. If market entities use any aforementioned unregistered signs as trademarks, they will be stopped and given a time limit to correct, still, they may face punishments such as notifications to relevant administrative departments and fines.

The Guidelines on Application for Registration and Use of Trademarks Containing Geographic Names provides guidance on standardized use of registered trademarks containing geographical names, reasonable protection of rights, and legitimate use by others. The owner of the exclusive right to use a trademark should use the approved registered trademark logo and the approved use of goods or services, and shall not change, highlight, simplify, add, deform, or split the geographical name part of the trademark on its own. Other market entities that only use the relevant geographical name in a non-trademark use to indicate geographical origin shall be regarded as legitimate good faith use. The owner of the registered trademark has no right to prohibit others on the grounds that such use is identical with the place name in its registered trademark. Other market entities should also fully register the right to exclusive use of the trademark when using a place name and must not exceed the scope of “justifiable and reasonable” use. In addition, the transfer of trademarks containing geographical names to transferees whose actual use will cause the public to misidentify the place of origin or source should be avoided. For transferring collective trademarks or certification trademarks containing geographical names, transferees should also meet the relevant subject qualification requirements and other requirements.

2. Highlighting use of “Huawei in Chinese” in the title of online sales link of one’s own products constituted infringement. The court ordered RMB 2 million in compensation

Plaintiff Huawei Technologies Co., Ltd. (“Huawei”) sued defendant Ji She Clothing (Shanghai) Co., Ltd. (“Ji She”) for trademark infringements and false publicity. The Shanghai Jing Shan District Court ruled against Ji She and ordered Ji She to stop infringement and unfair competition actions, and compensate Huawei for economic losses and reasonable expenses totaling RMB 2 million (USD295,000).

The first issue in dispute was: Whether the act of highlighting use of other’s registered trademark in the hyperlink title of an online sales of its own products by Ji She constitutes trademark use. The court found that using identical or similar words as other’s registered trademarks as the first words of an online sales hyperlink title of its own products would make Internet users to believe that the store’s goods or services have a specific connection with that other’s trademarks pointed to by the words used. Such use constituted trademark use. Ji She used words such as “Suitable for Huawei,” “Authentic Huawei,” and “For Huawei mobile phones” as the first part of the title of its own product online sales hyperlink, and highlighted these words in a prominent position of the title without displaying its own brand. The title was accompanied by the word “authentic product,” which was likely to confuse Internet users. The method of naming the titles of an online sales hyperlink of its own products by Ji she neither conformed to Tmall’s product title publishing specifications, nor did it conform to the industry’s general practices. The said actions violated Huawei’s trademark right to use “Huawei in Chinese,” Jishe should immediately stop the infringement and rectify its own products on its Tmall flagship store in accordance with the Tmall’s product title publishing regulations and industry-wide practices. The title of the online sales hyperlink should highlight its own brand name at the beginning of the title.

The second issue in dispute was: Whether Ji She’s actions constituted an unfair competition act of false publicity. Huawei and Ji She were both smart watches owners and competes with each other. The “Huawei in Chinese” trademark owned by Huawei is well-known in the market, and Ji She used the words “Authentic Huawei” in the first part of the title of an online sales hyperlink of its own products. Such use was a misleading commercial publicity that could easily mislead consumers. Therefore, Ji She’s actions constituted false publicity.

The third issue in dispute was: The amount of compensation and reasonable expenses for rights protection. According to the evidence on file, although it was difficult to determine the actual loss of Huawei and the benefits obtained by the Ji She from its infringement, it could be roughly determined that Ji She’s sales of the 16 infringing products were around RMB 23 million to 37 million. Ji She claimed that there were exaggerated sales data and return rate, etc., and that its profit were low. Therefore, Tmall’s sales data cannot be used as the calculation base. Ji She, however, did not provide any actual sales number or profits it had. Therefore, the court comprehensively considered factors such as the popularity of Huawei’s “Huawei in Chinese” trademark, Huawei’s influence in the smart watch industry, the degree of subjective fault of Ji She, the method of infringement, the duration of infringement, and the consequences of infringement damages, in supporting Huawei’s infringement claim and compensation claim for economic losses and reasonable expenses for RMB 2 million (USD295,000).

3. Squatted “SUPREME” trademark was invalidated

The Beijing High Court recently rendered a decision against Guangzhou Duo Lun Zi Watch Co., Ltd. (“Duo Lun Zi”) in an administrative trademark invalidation dispute that also involved a third party Chapter Four, and the CNIPA. The court rejected the appeal and affirmed the first instance decision.

Disputed Mark

Disputed Mark in Class 14 with Reg. No. 23437057 Approved goods: sports watch, watch, etc.

The court found that Duo Lun Zi filed for more than 100 trademarks across multiple classes of goods and services, including “Xia Mi in Chinese SHARME,” “Wan Bao Lu in Chinese MARLBORO,” “supreme,” etc., which were identical or similar to Chapter Four and other third parties’ famous trademarks that have high distinctiveness. Not only did Duo Lun Zi fail to provide reasonable explanations to the source of its trademark design, but it also failed to prove that its massive filings were due to regular business needs. Thus, Duo Lun Zi’s massive filings cannot be seen as to have filed in good faith. On the other hand, the “supreme” trademark that is owned by Chapter Four has certain distinctiveness and the evidence in this case can prove that through Chapter Four’s promotion and use, the “supreme” mark obtained certain fame before the Disputed Mark’s registration date. Duo Lun Zi’s failure to provide evidence proving its actual intent of use of the Disputed Mark and any actual commercial use of the mark despite it filed the Disputed Mark that is identical or similar to Chapter Four’s prior famous mark. Accordingly, Duo Lun Zi’s massive filing, including filing of the Disputed Mark, disrupted the order of trademark registration, harmed public interests, and improperly occupied public resources, which violated the provision of “obtaining registration by other improper means” as stipulated in Article 44 of the 2013 Trademark Law. The first instance judgment was correct and should be affirmed.

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Weekly China Trademark News Updates

February 2, 2023

Major Points of the Draft China Trademark Law Amendments (2023)

China Trademark Law, enacted in 1982, has been amended four times (1993, 2001, 2013, and 2019). Yet there are still issues of bad faith trademark applications, redundant and repeated registrations, improper use and abuse of trademark rights, etc. in trademark practice. On 13 January 2023, less than four years after the 2019 amendment, the China National Intellectual Property Administration (CNIPA) released a new Draft Amendment to the Trademark Law (“Draft”) for public comment.

The Draft expands the current Trademark Law to 10 chapters and 101 articles, among which, there are 23 newly added articles, 6 new articles split from existing articles, 45 articles with substantive updates, and 27 articles basically remain unchanged.

In light of such drastic revisions, this newsletter is prepared with major points that we believe are most noteworthy.

I. Strengthen Measures to Crackdown on Bad Faith Trademarks

1. Clarify specific circumstances of bad faith trademarks

Article 22 of the Draft lists specific circumstances of bad faith marks, including: (1) applying for trademarks in bulk with no intent to use, which disrupts the order of trademark registration; (2) applying for trademarks using fraudulent or other improper means; (3) applying for trademarks that are detrimental to the interest of the country or of the public, or that have other significant unhealthy effects; (4) copying, imitating, or translating other’s well-known mark; (5) pre-emptively applying by the trademark owner’s agent, representative, or interested party; (6) pre-emptively applying for other’s trademarks by unfair means, which damages other’s existing prior rights or interests; and (7) other actions in bad faith.

The Draft clarifies that “applying with no intent to use, or filing applications in bulk,” and “applying using fraudulent or other improper means” could be used as absolute grounds for trademark refusals, oppositions, and invalidations. This has broadened the application scope of the Article 44 of Trademark Law 2019, which is mostly applicable only against registered trademarks in invalidation actions.

2. Add more restrictions on signs that can be used and registered as trademarks 

– those in violation of public order or morality (Article 14)
– those contrary to core socialist values, or detrimental to excellent Chinese traditional culture (Article 15)
– both domestic and foreign geographical names known to the public (Article 15)
– those consisting of only generic names, designs, model numbers or technical terms of the goods concerned can neither be registered as trademarks, nor acquired distinctiveness through use (Article 16)

The Trademark Law 2019 stipulates that “geographic names of administrative divisions above the county level or foreign geographic names known to the public shall not be used as trademarks.” On this basis, Draft further adds “domestic geographic names known to the public” into the scope of signs that are prohibited from using and registering as trademarks.

In addition, review of trademark distinctiveness is more stringent, that is, generic names, designs, model numbers or technical terms are prohibited from securing registration by obtaining distinctiveness through use.

3. Prohibit repeated registrations

Article 21 of the Draft clarifies that a trademark application shall not be identical to the applicant’s previous applications, registered trademarks, or trademarks that have been revoked, cancelled, or declared invalid within the prior year for the same kind of goods or services. The purpose is to regulate improper acts of trademark squatters such as repeated bad faith applications, and re-application for registration immediately after their squatted trademarks are invalidated or cancelled. And there are some exceptions for right holders who have legitimate need, such as: (1) due to production and operation needs, the trademark application bears minor modifications to the prior trademark which has been in actual use, and the applicant can illustrate the differences; (2) for reasons not attributable to the applicant, the prior registered trademark was not renewed; (3) due to the failure to timely submit trademark use statements, the prior registered trademark that has been in actual use was cancelled; (4) for reasons not attributable to the applicant, the prior registered trademark that has been in actual use was cancelled due to failure to provide evidence of use in response to a non-use cancellation; (5) the prior trademark was declared invalid due to conflicts with prior rights or interests of others, but the prior rights or interests in question no longer exist; (6) there are other legitimate reasons to justify repeated applications for trademark registration.

4. Establish transfer mechanism of bad faith trademarks in invalidation proceeding

Articles 45 to 47 of the Draft stipulate that not only may prior right holder request the CNIPA to declare a registered trademark invalid, but prior right holder may also request to transfer such registered bad faith trademark under his name. This amendment creates a new mechanism favorable to right holders whose marks were pre-emptively registered by squatters; it enables the right holder to obtain earlier registered trademarks while avoiding repeated applications and refusal reviews in line with its trademark enforcement actions.Meanwhile, the Draft sets limitations on transferring registered trademarks by the CNIPA, that is, if there are no other reasons to declare the registered trademark invalid, and the transfer is unlikely to lead to confusion or other adverse effects, the CNIPA shall approve the transfer of the registered trademark. Such limitations, however, lack necessary details for actual implementations. If these particular imitations are to be included in the final version of the amended Trademark Law, we expect the Trademark Implementation Regulations and relevant regulative documents would provide further details and clarifications.

5. Increase penalties against bad faith trademarks

– Increase fines against bad faith registrations (Article 67)
– Civil compensations shall be ordered against bad faith trademark registrations that caused damages to others (Article 83)
– Bad faith trademark registrations that damage national interests, or social public interests, or cause major adverse effects, the Procuratorate shall, in accordance with the law, file a lawsuit in the Court against the bad faith trademark registrations (Article 83)

Articles 67 and 83 of the Draft provide a trinity of administrative, civil, and criminal punishment mechanism to effectively protect the legitimate rights and interests of right holders and crack down on bad faith squatting. A bad faith trademark application can be fined up to RMB250, 000 and any illegal gains shall be confiscated. If losses are caused to a specific entity, such entity may sue in a Court and request monetary compensation for the loss. If a bad faith trademark application damages national interests, social public interests or causes other major adverse effects, the Procuratorate may file a lawsuit.

III. Improve Trademark Examination Proceedings

1. Shorten the timeline for opposition

Article 36 of the Draft shortens the opposition period from three months to two months, which in turn shortens the time needed to obtain a trademark registration.

2. Cancel review of disapproval of trademark registration

Article 39 of the Draft cancels the review of disapproval of trademark registration. Where a trademark is disapproved in opposition, the applicant no longer has the right to appeal such decision with the CNIPA, but it may appeal to the Court. This amendment avoids the same dispute going through three proceedings (substantive examination, opposition, review of disapproval) all before the CNIPA, while still providing remedy for the applicant before the Court.

The Draft does not, however, amend the proceeding where an opposed trademark is approved for registration and where the opponent can file an invalidation with the CNIPA, then still have the remedy to appeal an unfavorable decision to the Court.

How can the two proceedings be harmonized in practice or whether consistency of review is applicable deserves further discussions.

3. Restrict the application of change of circumstances rule in court proceedings

Article 42 of the Draft stipulates that for court proceedings on refusal reviews, registration disapproval reviews, and invalidation actions, “If the status of the relevant trademarks change after a CNIPA decision is made, it shall not affect the trial of the decision by the Court, except when the principle of fairness is clearly violated.” According to the said amendment, change of circumstances shall not be applicable to administrative trademark litigations, except “when the principle of fairness is clearly violated.” However, the circumstances of “when the principle of fairness is clearly violated” remains unclear. Such amendment would greatly impact rights holders’ current practices of obtaining their own trademark registrations by removing prior obstacles via invalidations or cancellations.

III. Strengthen Trademark Use Requirements

1. Strengthen trademark use obligations

– Add use or intent to use requirement when applying new trademarks (Article 5)
– Establish regulations to require trademark owners voluntarily explain trademark use 5 years after registration (Article 61)

Article 5 and 61 of the Draft adds use or intent to use requirement when applying trademarks, and establishes regulations to require trademark owners to voluntarily explain trademark use 5 years after registration. Additionally, a random inspection system for explaining use and provisions for cancelling registered trademarks after random inspections is also added. This amendment will impose higher requirements on the use and maintenance of trademarks by trademark owners. Accordingly, defensive filings may face problems for providing evidence of use 5 years after registration. However, the Draft does not provide for specific review standards and implementing rules. According to the CNIPA statement on the Draft, “a simple and easy-to-implement method such as a use undertaking letter or a use description form is likely to be adopted.”

2. Regulate trademark use

For “unauthorized alteration of registered trademarks, name or address or the registrant and other items,” the Trademark Law 2019 only imposes liabilities “to make corrections within a time limit,” otherwise “the registered trademark shall be cancelled.” Article 64 of the Draft adds “a fine up to RMB100, 000” on top of the said provisions and imposes corresponding administrative and criminal liabilities and compensations for those infringing others’ trademark rights.

3. Broaden the applicable circumstances for cancellation

– Cancellation due to causing confusion among relevant public as to quality, source, or origin or other features of the goods by the use of a registered trademark, or seriously harming public interests and cause significant adverse effects by the use and exercise of exclusive rights of a registered trademark (Article 49)
– Cancellation due to untruthful statement of trademark use during random inspections (Article 61)
– Cancellation due to unauthorized alteration in the process of using the registered trademark (Article 64)

The Draft improves the cancellation system by adding more applicable circumstances and specifies that the CNIPA may cancel ex officio a registered trademark that damages public interests. Meanwhile, Article 49 adds a provision that cancellation “shall not damage the legitimate rights and interests of the trademark registrant or disrupt the order of trademark registration” in order to further regulate repeated three-year non-use cancellations or bad faith three-year non-use cancellations.

In addition, the Draft also expands the scope of cancellation ex officio. The CNIPA may cancel a registered trademark ex officio if an improper use of trademark right seriously damages the public interest and causes major adverse effects. If a trademark registrant alters the registered trademark without authorization in the process of using such registered trademark and fails to make correction within a time limit, that registered trademark shall be cancelled. The CNIPA shall conduct random inspections on a trademark registrant’s statement of the use of the trademark, and if necessary, require the trademark registrant to supplement relevant evidence. Where such statement is found to be untrue, the registered trademark shall be cancelled.

4. Clarify the applicable circumstances and the beginning and end of trademark registration “isolation” period

Article 50 of the Draft stipulates that, within one year from the date when a registered trademark is published as canceled or expired, any application for a trademark that is identical or similar to the said mark shall not be approved.

Regarding this one-year “isolation” period, which aims to avoid market confusion, the Draft improves the applicable circumstances by deleting the current provision of applying the isolation after a registered trademark is invalidated, and only retains applicability after a registered trademark is cancelled or expired.

In practice, prior right holders usually file a trademark application while filing an invalidation against a squatted trademark. If the one-year isolation is applicable to such squatted registration, it will lead to prior right holders’ repeatedly filing new trademark applications or incur new trademark disputes. This amendment, in comparison, is closer to the legislative intent in assuring that prior right holder’s trademark application will be approved timely.

IV. Strengthen Trademark Protection

1. Strengthen well-known mark protection

Article 10 of the Draft amends the current expression of “recognition of a well-known mark” into “confirmation of well-known status of a trademark,” which helps to weaken the administrative tint in the well-known mark affirmation. The amendment further specifies that the protection shall follow the principle of case-to-case confirmation, passive protection, and need-basis confirmation, and provides that the scope of protection of a well-known trademark shall be appropriate to the trademark’s distinctive features and reputation.

Meanwhile, Article 18 extends the scope of protection to circumstance that “is likely to cause the relevant public to believe that a trademark is closely connected with a well-known trademark, thus diminishing the distinctive features of that well-known trademark, or disparaging or improperly free-riding on the market reputation of the well-known trademark.”

2. Improve trademark infringement damage calculation method 

The order of calculating trademark infringement damages in the Trademark Law 2019 is actual loss of the right holder, infringer’s infringement profits, and reasonable multiples of royalties. In judicial practice, however, said damage calculation order is not the basis for calculating infringement profit when rights holder cannot prove its loss after exhausting his burden of proof. Therefore, Article 77 of the Draft lists right holder’s actual loss or infringer’s infringing profits as the first priority in damages calculation methods, which more streamlined with legal practice. Moreover, the Draft clarifies that damages should include right holder’s reasonable costs.

3. Introduce public interest trademark infringement lawsuit

Article 78 of the Draft introduces public interest trademark infringement lawsuit, where the infringement of trademark rights harms national interests or social public interests, and the trademark owner or interested parties does not file a lawsuit, and the department responsible for trademark enforcement does not deal with the infringement, the Procuratorial may file a lawsuit before the Court.

V. Clarify Administrative Power Boundaries 

1. Introduce a principled provision where trademark rights shall not be abused to damage national interests, social public interests, or the legitimate rights and interests of others

Article 9 of the Draft stipulates that the principle of good faith shall be upheld in the application for trademark registration and in the exercise of trademark rights. Trademark owners shall not abuse trademark rights to the detriment of national interests, public interests, or the legitimate rights and interests of others.

2. Improve descriptive use regulations and add fair use scenarios

Article 62 of the Draft introduces trademark fair use that includes (1) using one’s name and address in good faith; (2) for the purpose of indicating the kind, nature, quality, functions, purposes, weight, quantity, value, geographic origin or other features of the goods, using the geographical name, generic name, graphics, models, technical terms or other symbols relating to such indication of goods; (3) using its registered trademark for the sole purpose of indicating the purpose of use, target or scenario of use of goods, except where such use misleads the public.

3. Introduce malicious lawsuit compensation system

The Trademark Law 2019 sets a regulatory path for malicious lawsuit to be imposed of a sanction by the Court, which provides a legal basis against trademark right abuse. Article 84 of the Draft further stipulates a compensation system for malicious lawsuit. Where a malicious trademark lawsuit causes losses to others, compensation shall be ordered. The amount of compensation shall at least include the reasonable costs paid by the other party in responding to the malicious trademark lawsuit.

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Weekly China Trademark News Updates

January 19, 2023

1. The CNIPA released a notice on public opinion consultation on the “Draft Amendment to the China Trademark Law (Draft for Comment)”

On January 13, 2023, the CNIPA released the “Draft Amendment to the China Trademark Law (Draft for Comment)” to solicit opinions. The amendments involved in the Draft Amendment mainly include prohibition of repeated registration, shortening of the publication period to two months, compulsory transfer of bad faith squatted trademarks, and increased penalties for bad faith registered trademarks, cancel non-registration appeal, added requirement of trademark use or commitment to use, and the system of voluntarily explanation of use of trademarks every 5 years after trademark registration, etc.

2. The State Council Information Office held a Press Conference on Intellectual Property Work in 2022

On January 16, 2023, the State Council Information Office held a press conference to introduce the work related to intellectual property in 2022. In 2022, there were 6.177 million registered trademarks. The CNIPA completed adjudicating 169,000 trademark opposition cases, completed 412,000 various trademark review and appeal cases, and received 5,827 Madrid trademark international registration applications submitted by domestic applicants. As of the end of 2022, the number of valid trademark registrations in China are 42.672 million.

3. “Shiseido in Chinese” was recognized as a well-known mark and granted cross-class protection

Jingmen Shiseido Gypsum Industry Co., Ltd. (“Jingmen Shiseido”) is the registrant of the trademark “Shiseido Gypsum in Chinese” with reg. no. 11485383 (“Disputed Mark”). Shiseido Co., Ltd. (“Shiseido”) filed an invalidation against the Disputed Mark. The CNIPA invalidated the Disputed Mark. Jingmen Shiseido appealed the CNIPA decision to the Beijing IP Court.

The Beijing IP Court found that the evidence submitted cannot prove that Shiseido’s Cited Mark (“Shiseido in Chinese” with reg. no. 135757) had reached the level of a well-known before the application date of the Disputed Mark. The Beijing IP Court vacated the CNIPA’s invalidation decision. The CNIPA and Shiseido appealed to the Beijing High Court. The Beijing High Court found that advertisements published in newspapers and magazines, ranking data of the world’s top 500 brands and other materials submitted by Shiseido can prove that the Cited Mark was approved and registered on cosmetics as early as 1980, and has a high reputation worldwide before the application date of the Disputed Mark. The Cited Mark has been used and publicized extensively in China for a long period of time and has won many honors. Its sales performance is relatively remarkable in the cosmetics industry. Moreover, before and after the filing date of the Disputed Mark, several effective judgments have determined that the Cited Mark is a well-known trademark used in class 3 for cosmetics. Combined with the evidence submitted, it was sufficient to determine that the Cited Mark has been widely known to the relevant public in China on “cosmetics” products and has reached the level of well-known. The Disputed Mark is composed of Chinese characters “Shiseido Gypsum in Chinese,” and the Cited Mark is composed of Chinese characters “Shiseido in Chinese.” The Disputed Mark completely includes the Cited Mark. The two marks were similar in terms of text composition, pronunciation, meaning, etc., which have constituted a copy and imitation of the Cited Mark. Although there were differences between the goods such as “alabaster; plaster of Paris; gypsum; gypsum board” used by the Disputed Mark and “cosmetics” for which the Cited Mark is well-known for, the Cited Mark has reached the level of well-known and the Disputed Mark’s distinctive part was identical with the Cited Mark. Under such circumstances, the relevant public would easily believe that the Disputed Mark has a considerable degree of connection with the Cited Mark when purchasing the goods approved to use under the Disputed Mark, thereby weakening the distinctiveness of the Cited Mark or improperly taking advantage of the market reputation of the Cited Mark. The market reputation of Shiseido’s well-known Cited Mark may be damaged. Accordingly, the Beijing High Court invalidated the Disputed Mark.

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