(English Translation of the News Reports Posted on Websites of Beijing High Court and the Supreme People’s Court)

Author: Cheng Ying   Release Time: 2016/04/28

Recently, Beijing High Court as the second instance court rendered the final and effective decisions on the trademark opposition against “Face book.”  Beijing High Court held that trademark application of the opposed marks “Face book” was in obvious bad faith of copying and imitating third parties’ marks with high fame, which disturbed the registration and administrative order of trademark, jeopardized the market order of fair competition, and violated the principle of public order and good social custom.  Accordingly, Beijing High Court affirmed the decisions of Beijing First Intermediate Court (the first instance court), which ordered the Trademark Review and Adjudication Board (TRAB) to revoke the TRAB decision approving the registration of the opposed marks and to render new decisions.  Facebook, Inc., as the U.S. owner of the trademark of FACEBOOK, won the three lawsuits.

On January 24, 2011, the individual LIU Hongqun filed the applications for the opposed marks of “face book” in several Classes，which includes goods such as “Canned vegetables, Potato chips” in Class 29, “Coffee-based beverages, Tea-based beverages and candy” in Class 30, “Fruit juice [beverages], Ice [beverages], and Vegetable juices [beverages]” in Class 32.

After the opposed marks were preliminarily examined and published for opposition, Facebook, Inc., the owner of the FACEBOOK trademark, filed the oppositions before the Chinese Trademark Office (CTMO) within the opposition period.  The CTMO approved the registration of the opposed marks after the examination.  Dissatisfied with the CTMO decisions, Facebook, Inc. filed the appeal for review before the TRAB on April 2, 2013.

On April 15, 2014, the TRAB rendered the decisions holding as follows:  No evidence shows Facebook, Inc. has used “FACEBOOK” at a prior stage as the trade name or trademark in the production or business field relevant to goods such as fruit juice [beverage] and has formed some influence.  Under this situation, it could not be deemed that the opposed marks jeopardized the prior right of trade name of Facebook, Inc., and it could not be deemed that the opposed marks fell under the situation where unfair means were used to preemptively register the trademark of some reputation owned by a third party.  Thus, the opposed marks did not violate Article 31 of the Chinese Trademark Law.  Dissatisfied with the TRAB decisions, Facebook, Inc., filed the administrative lawsuits.

The decisions of the first instance court held that the major evidence supporting the TRAB decisions were insufficient, and thus revoked the TRAB decisions and ordered the TRAB to render new decisions.

LIU Hongqun, dissatisfied with the decisions of the first instance court, filed appeals before the second instance court (Beijing High Court).  LIU Hongqun argued the following:  He had been working in the field of Fast-Moving Consumer Goods (FMCG) for years.  The applications for the marks such as “DARLIE in Chinese” and “face book” were filed in accordance with the relevant procedures prescribed by the Chinese Trademark Law.  Moreover, the fame of the mark “DARLIE in Chinese” filed by him was confirmed by the prior court decision.  Therefore, the opposed marks shall not be deemed as a violation of the law.

Beijing High Court held as follows:  According to Paragraph 1 of Article 41 of the Chinese Trademark Law, where the registration of a trademark was registered by deceptive or any other unfair means, the CTMO shall invalidate the registered trademark; and any other organization or individual may request the TRAB to invalidate such a registered trademark.  The legislative spirit of the above provision is to implement the principle of public order and good social custom, to maintain the good order of the registration and administration of trademarks, and to create the healthy market environment of trademark.  According to the literary meaning of the above provision, the above provision may be applied merely in the procedure of invalidating the registered trademarks, rather than the procedure of examination and approval of the pending trademark applications.  However, if the behaviors of filing trademark applications by deceptive or any other unfair means are not prohibited at the examination and approval stage, which have to wait for invalidation after the registration of such trademarks, it is obviously not beneficial to prohibiting the above-mentioned behaviors of improper trademark registration in a timely manner.  Therefore, the above mentioned legislative spirit shall be implemented throughout the procedures of trademark application examination, approval of application and invalidation.  If an applicant files a trademark application by deceptive or any other unfair means, the CTMO, the TRAB and the courts may prohibit such behaviors of the improper application during the procedures of application examination, approval of application, and the corresponding proceeding of litigation, by applying with reference to the above provision.

In this specific case, LIU Hongqun filed applications for the mark “face book” in several Classes, and filed applications for the marks “DARLIE in Chinese” and “One Plus One in Chinese” in Class 29.  The above-mentioned application of LIU Hongqun was in obvious bad faith of copying and imitating third parties’ marks with high fame, which disturbed the regulation and administrative order of trademark, jeopardized the market order of fair competition, and violated the principle of public order and good social custom.  Meanwhile, China adopts the trademark registration system, and the principle of first to file shall be applied while examining the trademark application to decide whether to approve for registration.  Nevertheless, the value of marks per se is to distinguish the sources of goods and services.  Accordingly, the trademark registration shall be preconditioned on the intention of using the marks, and the value of marks per se can be realized in this way.  In case an applicant files a large quantity of trademarks with high fame owned by third parties for purpose of gaining commercial benefits by transferring the trademarks and hoarding the trademarks for speculation, it obviously violates the inherent value of marks, adversely affects the normal order of trademark registration, and even hinders the healthy operation of the good faith operators under the market economy.  Therefore, such behaviors aiming at the abusive and pre-emptive registration and disturbing of the order of trademark registration shall be prohibited.  In accordance with the legislative spirit of the Paragraph 1 of Article 41 of the Chinese Trademark Law, the application for the opposed marks shall not be approved for registration.  The decisions of the first instance court are correct, which shall be affirmed.  The requests for appeal of LIU Hongqun lack factual and legal basis, which shall not be supported.

In conclusion, Beijing High Court held that the facts are clear, the application of law is correct, and the procedures are legal in the decisions of the first instance court.  Thus, Beijing High Court held that the decisions of the first instance court shall be affirmed.

Sources of Chinese texts are as follows:

Beijing High Court website

http://bjgy.chinacourt.org/article/detail/2016/04/id/1847770.shtml

The Supreme People’s Court website

http://www.chinacourt.org/article/detail/2016/04/id/1847894.shtml