Weekly China Trademark News Updates

October 26, 2022

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

Disputed Mark	Cited Mark

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

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

2. Bad faith complaints constitute unfair competition

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

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