Weekly China Trademark News Updates

January 11, 2023

1. The CNIPA and all levels of courts held a seminar on authorization and confirmation of trademark rights

Recently, the Trademark Office of the CNIPA and three levels of courts held a seminar on authorization and confirmation of trademark rights. Around 40 participants from the Trademark Office of the CNIPA, the Department of Treaty and Law of the CNIPA, the Beijing Intellectual Property Court, the Beijing High Court, and the Supreme People’s Court attended this seminar.

Issues regarding the feasibility of closing the door of litigation evidence in the non-use cancellation review cases, avoiding improper expansion of the application of the change of circumstances, definition of the “legality” of trademark use, and acceptance of coexistence agreements from affiliated companies were extensively discussed through analysis from various angles and interest, and by incorporating cases and relevant legal regulations, and parts of the issues discussed reached consensus.

We will continue to pay close attention to the trends of the Trademark Office and the courts on issues related to the evidence of use, change of circumstances, and coexistence agreements.

2. The Beijing High Court invalidated the stylized Crocodile mark by overturning the first instance decision

Against the mark “ ” in class 25 applied in May 2006 by Cartelo Crocodile Pte Ltd (“Cartelo”) with the address of Samoa and registered in March 2017 through oppositions and opposition appeal, Lacoste of France and Crocodile Garment Limited of Hong Kong (“Crocodile Garment”) filed invalidation actions respectively in July 2017 and April 2018. The then TRAB found Lacoste’s “” caused no confusion whilst invalidated the “” mark for similarity with Crocodile Garment’s “”, “”, “” marks.

Cartelo was unsatisfied with the decision and appealed to the Beijing IP Court.

The Beijing IP Court found that: the Disputed Mark is a Design mark. The Cited Marks were combinations of Design with letters and/or numbers, where letters or numbers took a bigger portion of the mark, or were brighter than the Design. Therefore, among the Cited Marks, parts other than the Design also constituted distinctive parts that has strong distinctiveness. There were relatively large differences between compositions and overall visual effect of the Cited Marks and the Disputed Mark. What’s more, comparing Designs alone, although the Disputed Mark consisted of a crocodile design while all Cited Marks include a crocodile design, there are certain differences between the two in terms of body shape, tail shape, mouth features, and body image depiction. Thus, the Disputed Mark and the Cited Marks do not constitute similar marks.

Both the CNIPA and Crocodile Garment appealed the Beijing IP Court decision. The Beijing High Court found that both the Disputed Mark and the Cited Marks consisted of a left facing crocodile design. The Cited Marks consisted of a left facing crocodile design with letters, where the crocodile design and the letters “CORCODILE” were its distinctive parts. Regardless of overall comparison or comparison of the distinctive parts, the Disputed Mark and the Cited Marks were relatively similar in terms of design composition, design style, meaning, and overall visual effect, which constituted similar marks. The evidence on file submitted by Cartelo was not sufficient to prove that the Disputed Mark had been used to a certain degree of popularity before the filing date of each Cited Marks, and had formed a stable one-to-one correspondence relationship with Cartelo in the field of goods approved to be used by the Disputed Mark and can be sufficiently distinguished from each Cited Marks.

The Disputed Mark and the Cited Marks constituted similar marks on identical or similar marks. Thus, the CNIPA did not err in its decision and this court affirmed the CNIPA’s decision and vacated the first instance decision.

3. Louis Vuitton successfully invalidated the “Bei Er Wei Deng in Chinese” mark through litigation

A Hong Kong resident registered a word mark “Bei Er Wei Deng in Chinese” (“Disputed Mark) in traditional Chinese characters in class 23 in February 2009. Louis Vuitton Malletier (“Louis Vuitton”) filed an invalidation action against the Disputed Mark in June 2019, claiming its well-known marks “Lu Yi Wei Deng in Chinese” (Louis Vuitton in Chinese) in class 18 and class 25 (“Cited Marks).  The CNIPA found no violation of well-known mark or absolute grounds, and rendered a decision in December 2020 to sustain the Disputed Mark.

Louis Vuitton appealed to the Beijing IP Court.

The Beijing IP Court found that the evidence can prove that the Cited Mark 1 reached the degree of well-known in mainland China for “luggage” in class 18 prior to the filing date of the Disputed Mark, constituted as a well-known mark. The Disputed Mark and the Cited Marks constituted similar in terms of word composition and pronunciation. The Disputed Mark copied and imitated the Cited Mark. The Disputed Mark’s use on “yarn and worsted wool” overlapped with “luggage” in consumers. These goods have certain associations.

Meanwhile, the Cited Mark 1 have been registered for more than 30 years, Louis Vuitton has been selling luggage related goods labeling “Lu Yi Wei Deng in Chinese” for many years. The Disputed Mark’s registrant should have known Louis Vuitton and its more famous Cited Mark 1, and should reasonably avoid filing to register the Disputed Mark. Considering comprehensively the market reputation accumulated by the Cited Mark 1 before the filing date of the Disputed Mark and the continuous use of the Cited Mark 1 by Louis Vuitton, when the relevant public sees the Disputed Mark, it was easy to think of the well-known Cited Mark 1. Based on this association, the relevant public may mistakenly believe that the Disputed Mark was related to Louis Vuitton or the Cited Mark 1, thereby misidentifying the source of the goods. Even if there was no misidentification of the source of the goods, such association will destroy the close association between the Cited Mark 1 and the goods provided by Louis Vuitton, thereby weakening the distinctiveness of the Cited Mark 1and causing damage to the legitimate interests of Louis Vuitton , which violated the provisions of Article 13, Paragraph 2 of the 2001 China Trademark Law.

In view of the fact that the Cited Mark 1 has been recognized as a well-known mark and the rights and interests of Louis Vuitton have been protected, the court will no longer comment on whether the Cited Mark 2 in class 25 constituted as a well-known trademark according to the principle of determining well-known trademarks on demand.

The CNIPA appealed and the Beijing High Court found that: the Cited Mark 1 has become well-known prior to the filing date of the Disputed Mark, constituted as a well-known mark in luggage related goods. Both the Disputed Mark and the Cited Mark 1 included the fanciful words of “Wei Deng in Chinese.” The Disputed Mark and the Cited Mark 1 constituted similar in terms of word composition and pronunciation. The Disputed Mark copied and imitated the Cited Mark 1. The approved goods of worsted wool, etc. under the Disputed Mark overlapped with luggage related goods approved under the Cited Mark that Louis Vuitton was famous for in terms of sales channels and consumes. Considering the above, it can be deducted that the registrant of the Disputed Mark knew that the Cited Mark 1 was more famous on luggage related goods and should have reasonably avoid filing trademark applications similar to the Cited Mark 1. However, that the registrant of the Disputed Mark insisted on filing the Disputed Mark that was highly similar to the Cited Mark 1 on goods highly similar under the Cited Mark 1’s approved goods. The registrant of the Disputed Mark showed obvious intention to take advantage of the Cited Mark 1’s fame. The use of the Disputed Mark on “worsted wool” would easily cause confusion and misunderstanding among the relevant public and damage Louis Vuitton’s interests. The first instance decision was affirmed.

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Some essential aspects of utility model patent in China

Weekly China Trademark News Updates

January 4, 2023

1. HDMI was awarded of RMB 500,000 in punitive damages based on sales number

In December 2022, the Shenzhen Intermediate Court concluded a lawsuit in favor of HDMI LICENSING ADMINISTRATOR, INC. (“HDMI”) against Shenzhen Xindaying Technology Co., Ltd. (“Xindaying”) in a trademark dispute. The court ordered Xindaying to stop selling infringing goods, destroy the infringing goods in stock, and compensate HDMI for RMB500,000 (USD72,430).

The court found that: on January 18, 2021, Xindaying was punished by the administrative agency for trademark infringement. HDMI could still purchase infringing goods on March 23, 2021 from Xindaying’s 1688 webstore. That is, Xindaying repeated its infringing activities after being punished by the administrative agency. HDMI claimed that Xindaying deliberately infringed its legal right to exclusive use of a registered trademark and the circumstances were serious, which had factual basis. The request for punitive damages in this case complied with the law, and this court supported HDMI’s request.

According to 1688’s background data, 21,210 infringing goods were successfully traded, with a sales amount of RMB1.63 million. Xindaying argued that 1688 sales data contained a large number of fraudulent orders, which should be deducted when calculating the infringement profits. In practice, there are indeed some e-commerce sellers who use improper means to gain a favorable competitive position in seller’s ranking with false sales volume of related products, or to improve the reputation of sellers, or to give consumers the illusion of huge sales volume when browsing the product page. False transactions are carried out through means to attract consumers to buy and increase product sales. Such act of creating false sales violated the principle of good faith, and deceived consumers by improper means, damaged consumers’ right to know, and the competitive interests of other market operators, and violates the legal obligations as defined under the E-Commerce Law. That is, when Xindaying sold the infringing goods, it obtained praise and earned traffic based on false sales numbers, but requested those false sales numbers to be deducted when calculating infringing profits. This constituted as an attempt to make double profits from illegal activities. Accordingly, the court would not deduct the billing data when calculating the infringing profit, and Xindaying should bear the illegal consequences of its false transactions and should pay the corresponding price for its dishonest business behavior.

2. The “Ganten in Chinese” mark was recognized as a well-known mark and granted cross-class protection

The Beijing High Court concluded a trademark dispute between Jingtian (Shenzhen) Food and Beverage Group Co., Ltd. (“Jingtian“), Guangdong Bairun Tea Co., Ltd.  (“Bairun”), and Liankai Software (Beijing) Co. Ltd. (“Liankai”). The court ordered Bairun to stop the infringement and compensate Jingtian for the economic loss of RMB1.5 million (USD217,290) for Bairun’s trademark infringement. In addition, the court ordered Bairun to compensate RMB200,000 (USD28,972) for unfairly compete with Jingtian and Jingtian’s reasonable legal expenses of RMB80,000 (USD11,588). The court ordered Liankai to compensate Jingtian for the economic loss of RMB100,000 (USD14,486) based on trademark infringement and RMB20,000 (USD2,897) for reasonable legal costs.

The second instance court, upheld the first instance judgment, found that Jingtian provided sufficient evidence such as, special audit reports for sales and advertising fees, honorary certificates, award certificates, relevant judgments, requests for trademark invalidation, administrative judgments, newspapers and other evidence, in proving its “Gantian in Chinese” mark with reg. no. 3407468 was well-known in mineral water. Jingtian’s continuous and extensive use and publicity has been well known to the relevant public. It has been protected as a well-known trademark for many times. It was appropriate for the first instance judgment to find that the “Gantian in Chinese” mark with reg. no. 3407468 constituted a well-known mark. The “Bai Sui Shan in Chinese” mark used by Bairun and the “Nobel Tea in Bai Sui Shan in Chinese,” “Good Mountains and Good Water Produces Good Tea, Good Tea Originates from Bai Sui Shan” and other advertising slogan that used “Bai Sui Shan in Chinese” was identical to the “Gantian in Chinese” mark with reg. no. 3407468 in terms of word composition, pronunciation, and meanings. There were only slight differences in fonts. Bairun’s use constituted as a copy and imitation. Bairun used the “Bai Sui Shan in Chinese” mark with “Genuine Xiao Zhong Black Tea” and “Puer Dahongpao Dancong Black Tea,” which was not identical or similar to the goods that Jingtian’s “Gantian in Chinese” mark was famous for. However, the function, use, and target consumer extensively overlapped. The production and sales of the accused infringing products by Bairun and related advertising activities were enough to cause confusion among the relevant public and mistaken consumers into believing that the two were associated, which would damage the rights and interests of Jingtian. The first instance judgment did not err in recognized the “Gantian in Chinese” mark as a well-known mark.

Bairun used the promotional slogan of “the preferred brand of CCTV Online Mall” when displaying and selling “Bai Sui Shan in Chinese” tea products on its official website, WeChat public account and other platforms. Bairun’s use of “the preferred brand of CCTV online shopping mall” as a slogan was enough to cause misleading publicity effects and misled consumers. The first instance judgment did not err in finding that Bairun constituted false publicity and unfair competition.

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Weekly China Trademark News Updates

December 27, 2022

1. Vans was awarded RMB 16.2 million in treble damages against repeated bad faith trademark infringers

In December 2022, the Ningbo Intermediate Court concluded a trademark infringement lawsuit in favor of the plaintiff Vans, Inc. against the defendants Gao Zhilong, Ruian Jiwo Shoes Co., Ltd. (“Jiwo”), Ruian Xise Wanmei Shoes (“Xise Wanmei”), and Zhang Feifei. The court ordered the four defendants to stop the infringement and ordered that the defendants Gao Zhilong and Zhang Feifei should be jointly liable for compensating Vans for economic losses of RMB16 million (USD2.3 million), and the defendant Jiwo and Xise Wanmei shall be jointly and severally liable for part of the compensation. The four defendants shall jointly and severally bear reasonable legal fees of RMB200,000 (USD28,715).

The court held that Vans’ Cited Marks and the accused infringing marks were all used on footwear products in the same class. The accused infringing marks in this case constitute identical or similar marks with Vans’ Cited Marks.

Accused Infringing Marks	Cited Marks

The court found that Gao Zhilong and Zhang Feifei, the actual controllers of Jiwo and Xise Wanmei, are family members. In 2020, Xise Wanmei was administratively punished for selling products that infringed Vans’ registered trademark, and continued to sell the accused infringing products. Gao Zhilong and Zhang Feifei, as the actual controllers of Jiwo and Xise Wanmei, obviously knew that the accused infringing products sold by Jiwo and Xise Wanmei had greatly infringed upon Vans’ rights to exclusive use of registered trademarks However, Gao Zhilong and Zhang Feifei still actively participated in and even led the sale of the accused infringing goods by Jiwo and Xise Wanmei, which was enough to determine that the four defendants had obvious joint infringement intentions.

Regarding the amount of compensation, Gao Zhilong and Zhang Feifei have been infringing on Vans’ exclusive right to use registered trademarks since at least 2018. After being investigated by the market supervision and management department and sentenced by the court, the defendants should have a certain awareness of infringing on others’ trademark rights, but they continued to carry out identical or similar infringements through online stores, and the sales scale was relatively large. In addition, Jiwo and Xise Wanmei were actually controlled by Gao Zhilong and Zhang Feifei respectively, and they have divided labor and cooperated in the implementation of infringement acts. Therefore, the existing evidence was sufficient to prove that the four defendants have formed a long-term and stable business mainly infringing intellectual property rights from 2018 to 2021 and formed long-term and stable scale returns based on this. In this case, since the four defendants did not submit corresponding evidence to prove that they have other businesses, nor did they submit evidence to prove their own sales profits, they can refer to the trademark licensee of Vans in China. The average profit rate of Vans’ licensee in China is 50%. According to the penalty decision issued by the Ruian City Market Supervision Administration to Xise Wanmei, the gross profit rate of the accused infringing goods is about 46%. Combined with the gross profit rate of Anta, a listed company in the same industry, it can be seen that in the past three years the average annual gross profit margin is about 52.33%. It can also be seen from the above calculation results that the gross profit rate of 50% is in line with the general level of the industry, and also in line with the actual profit of the four defendants in this case, and the four defendants, as the main body of intellectual property infringement, should have a higher profit rate than that of standardized operations. Therefore, in this case, 50% of the sales profit can be used to calculate the profit of the defendants.

The four defendants were bad faith infringers with a wide range and large scale of infringements and obtained a lot of profits from infringements. They based their business on intellectual property infringement. After the four defendants were given criminal administrative punishments, they continued to carry out the same or similar infringements. The infringements were serious, so the court comprehensively considered the nature of the alleged infringement, the sales scale, the popularity of Vans’ trademarks involved, etc., and determined the appropriate punitive damages in this case should be three times. The amount of compensation that the four defendants should bear exceeds the plaintiff’s request, thus, the court fully supported the compensation amount claimed by Vans.

2. The “LUNA” series of facial cleansers were counterfeited by “Dumbo” facial cleansers, the court awarded RMB 900,000 in compensation!

The Hangzhou Intermediate Court recently concluded a counterfeit case in favor of Foreo (Shanghai) Trading Co. Ltd. (“Foreo”), and against Dongguan Ruixinli Cosmetic Appliances Co., Ltd. (“Ruixinli”), Hunan Menghai Trading Co., Ltd. (“Menghai”), Changsha Oufeila Culture Communication Co., Ltd. (“Oufeila”), and Sun Shinan. The court ordered Ruixinli, Menghai, Oufeila to stop the infringement, and that should jointly compensate Foreo for economic losses (including reasonable expenses) of RMB800,000 (USD115,000), and Sun Shinan to compensate Foreo for economic losses (including reasonable expenses) of RMB100,000 (USD14,357).

The second instance court, which affirmed the first instance decision, found that Foreo had been operating the Luna facial cleansers since 2013 in China. Foreo sold its products through multiple channels such as “Sephora,” counters across the country, and online platforms. Through advertisements, online publicity, celebrity endorsements, etc., the Luna series facial cleansers have gained a high reputation among the relevant public in the Chinese market. The product decoration of the Luna series facial cleanser products was mainly composed of bristles that are approximately flat ellipsoid as a whole, with a flat bottom and fan-shaped annular distribution in the middle of the top. Cloth and other elements have maintained its unique product decoration style since entering the Chinese market. Although the entire series has undergone minor revisions successively, the overall style was unified, and the main design elements have not been changed. The revision of decoration has not separated the packaging and decoration from the product. The arrangement and combination of the overall shape, bottom style, bristle distribution shape, and bristle thickness distribution on the decoration was unique, forming a significant overall image, and has nothing to do with the functionality of the product. As part of its publicity, after a long period of use and a lot of publicity, it is enough for the relevant public to associate the overall image of the above-mentioned decoration with the Luna facial cleanser product of Foreo, which has the function of identifying the source of its product. Therefore, the decoration constitutes a unique decoration under the Anti-Unfair Competition Law.

A comprehensive comparison between the Dumbo facial cleanser produced or sold by the four defendants and the Lund series facial cleanser showed that although there were differences in the back pattern and the specific shape of the ellipse, the overall shape of the facial cleansers, the shape of the distribution of bristles, the shape of the bristles, the arrangement and combination of thickness distribution and other aspects were identical or similar, and the overall image of the two decorations were still visually similar. With the general attention of the relevant public, it was easy for the relevant public to mistakenly believe that there was a certain connection between the two sources. Therefore, the decoration of the allegedly infringing product is similar to that of the Luna series facial cleanser.

To sum up, Ruixinli, Menghai, and Oufeila unauthorizedly used the decoration similar to Foreo’s product decoration that has obtained a certain influence, and produced and sold the Dumbo facial cleaners, and Sun Shinan also sold the above-mentioned infringing products. The defendants infringed on the certain influencial product decoration rights enjoyed by Foreo, which constituted unfair competition.

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Weekly China Trademark News Updates

December 20, 2022

1. The owner of the “Lincoln in Chinese” mark prevailed against the “Ling Ken in Chinese” mark for trademark, trade name, trade dress infringements

The Jiangsu High Court recently concluded a trademark infringement and unfair competition dispute in favor of the Lincoln Global Co., Ltd. (“Lincoln Global”), Lincoln Electric Company (“Lincoln Electric”), and Lincoln Electric Management (Shanghai) Co., Ltd. (“Shanghai Lincoln”) against Shanghai Ling Ken Electric Co., Ltd. (“Ling Ken”). The court affirmed that Ling Ken constituted trademark infringement and unfair competition, and ordered Ling Ken to compensate plaintiffs for economic losses and legal costs of RMB648,200 (USD92,821).

Founded in 1895, Lincoln Electric is a multinational enterprise engaged in the design, development and manufacture of arc welding products, headquartered in Ohio, USA. Lincoln Electric established a production base in China in 1997. After years of development, it has established many branches in China, including, but not limited to, Lincoln Electric Shanghai Company, Nanjing Lincoln Electric Co., Ltd., etc. Lincoln Global applied to register the “LINCOLN ELECTRIC” mark in Class 9 on May 14, 2002, which was approved for electric welding equipment, electric welding machines, transformers for electric welding equipment, etc. Lincoln Global applied for the “LINCOLN ELECTRIC and Design” mark in Class 9 on April 4, 2006, which was approved for rod-shaped welding electrodes, arc welding equipment, welding conveyors, wire machines, etc. Lincoln Global applied for the Design mark in Class 9 on June 23, 2008, which was approved for power supply for arc welding, transformer-rectifier welding equipment for arc discharge, etc. Said trademarks are all valid. Plaintiffs believed that the logos used by Ling Ken in the production and sales of electric welding machine products, website promotion, WeChat public account, and product manuals infringed upon trademark right of Lincoln Global. Ling Ken’ use of red shells with black front and rear panels on the electric welding machine products and use of words similar to the names of Lincoln Electric and Shanghai Lincoln that have certain influence constituted unfair competition.

Cited Marks

Regarding trademark infringement, Lincoln Global’s registered trademark is a fanciful trademark, through long-term use and publicity by Lincoln Global, etc., the said trademarks have obtained a high reputation. Lincoln Global has used the combination of “red machine shell with front and rear black panels” on their products. Consumers have established a fixed connection between this color combination and the products of Lincoln Global, which has strong distinctiveness. Ling Ken, as the enterprise engaged in the production and sales of welding equipment, should pay attention to the registered trademarks used by competitors in the same industry and avoid infringing on the exclusive right to use registered trademarks of others. The alleged infringing logo used in the official account and the product manual has the same overall composition as the Cited Marks, and the overall appearance was highly similar, and the pronunciation of the alleged infringing mark “Ling Ken in Chinese” was similar to the pronunciation of “Lincoln,” which may easily confuse and mistaken consumers, which constituted trademark infringement. Regarding unfair competition, first, Ling Ken’s act of registering “Ling Ken in Chinese” as it corporate name had the subjective intention of taking advantage of the popularity of Lincoln Electric and other corporate names. Objectively, the co-existence of Lincoln Electric, Lincoln Shanghai, and Ling Ken is easy to cause the relevant public to confuse the services provided by the two, or mistakenly believe that the two have a certain relationship, which will cause market confusion, damage to the interests of consumers, violate the legal provisions and recognized business ethics in market transactions, and constitute unfair competition. Second, welding machine products produced by plaintiff Lincoln Electric and others are well-known goods, and the packaging decoration of “red shell with black front and rear panels” has become recognizable and distinctive and can play a role in distinguishing the source of goods. The allegedly infringing product also adopted the design of “red shell with black front and rear panels,” which is similar to the decoration of the products claimed by Lincoln Electric and constituted unfair competition.

2. Carl Zeiss prevailed in a second instance trademark infringement and was awarded of RMB 4 million

Recently, the Zhejiang High Court concluded a trademark infringement and unfair competition dispute and ruled in favor of Carl Zeiss AG (“Zeiss”) and against Yiwu Hanke Outdoor Products Co., Ltd. (“Hanke”) and Wang Xiao. The court affirmed that Defendants constituted trademark infringement and unfair competition, and order Defendants to compensate plaintiff for economic losses of RMB 4 million (USD57, 280).

Zeiss established its factory in Germany in 1846 and is a world-renowned manufacturer and seller of optical lenses. Zeiss has been using registered trademarks on products such as microscopes, medical endoscopes, and glasses, as well as promotional materials such as packaging and product manuals, and in advertising. “Zeiss,” “Zeiss in Chinese,” “Carl Zeiss” and other trademarks of Zeiss have been widely publicized and used for a long time, and have gained a high reputation and fame in the field of optics, and are well known to the relevant public. At the same time, Carl Zeiss is the corporate name of Zeiss, and Carl Zeiss in Chinese and Carl Zeiss formed a stable corresponding relationship. As early as 1960, Zeiss applied for the trademarks such as “Zeiss,” “Zeiss in Chinese,” and “Carl Zeiss” in China, which were approved to be used in Class 9 for microscopes, telescopes, magnifying glasses, and other goods. Plaintiffs claimed that Hanke used identical or similar logos as the eight Cited Marks that were similar to the approved use of the Cited Marks without permission, which would easily lead to confusion among the relevant public and constituted trademark infringement. Hanke used “Zeiss” and “Zeiss in Chinese” as store names on its Yiwugo website, and uses them together with Zeiss’ slogan “We make it visible,” which was enough to make others mistakenly believe that there is some kind of relationship between it and Zeiss, which constituted as unfair competition. At the same time, Hanke used the “Made in Germany” mark as its products’ place of origin as false publicity on the accused infringing products, which constituted unfair competition.

Cited Mark

Regarding trademark infringement, the court found that after extensive publicity and use by plaintiff, Zeiss, the trademarks “Carl Zeiss” and “Carl Zeiss in Chinese,” “Zeiss,” and “Zeiss in Chinese” have formed a corresponding relationship to the relevant public and have established a relatively high reputation in the field of optical instruments. The allegedly infringing marks were used on gun scopes, rifle scopes, and other goods, which were optical products that were similar to Zeiss’s approved goods of microscopes, additional lenses, sight glasses, telescopes, etc. The functions and uses of the goods were similar, which may easily cause confusion and mistaken the relevant public. Hanke’s uses constituted use of identical or similar marks on similar goods. Reagrding unfair contention, because Zeiss commercially uses its trade names “Carl Zeiss” and “Zeiss” with “Carl Zeiss in Chinese” and “Zeiss in Chinese,” they have formed a corresponding relationship and have a relatively high reputation. Defendant, Hanke, opened the Yiwu Xiaguang Optical Instrument Factory store and used Zeiss’s “Zeiss” and “Zeiss in Chinese” brand name and Zeiss’s slogan “We make it visible” on its webpage, which misled others into believing that Hanke has a specific connection with Zeiss. At the same time, Hanke used the words “Made in Germany” as false publicity of the origin of its goods, which misled the relevant public into believing that Hanke has a competitive advantage over other operators with competitive relationships with Zeiss. Such acts violated the good faith principles and recognized business ethics, damaged the interests of competitors and constituted false publicity and unfair competition.

Hanke not only registered a large number of marks identical or similar to Zeiss’ trademarks, but also continued to carry out infringement activities after being investigated by Zeiss and punished by the administrative law enforcement. Hanke based its business on selling infringing products which shown obvious bad faith. Hanke has carried out the infringing activities for more than six years. The alleged infringing products bore multiple infringing marks. The infringement scope covers across online and offline activities, which satisfied the “serious circumstances” infringement element. However, the sales volume of the accused infringing products based on the salable quantity of the accused infringing goods in the infringer’s online store cannot be ascertained and the actual sales numbers may not be authentic. The court then applied statutory damages.

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Weekly China Trademark News Updates

December 13, 2022

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

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

December 7, 2022

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

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

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

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

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

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

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Weekly China Trademark News Updates

November 29, 2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

November 22, 2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Weekly China Trademark News Updates

November 15, 2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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