Weekly China Trademark News Updates

November 30, 2021

1. The CNIPA’s reply regarding procedural issues of an allegedly infringing trademark that passed the preliminary examination or is pending in opposition

Paragraph 3 of Article 62 of the Chinese Trademark Law provides that: “where, in the process of investigating a trademark infringement case, there is any dispute over the ownership of the trademark or the right holder files a trademark infringement lawsuit with the people’s court, the Administration for Market Regulation may suspend the investigation of the case. After the reason for the suspension is eliminated, the case investigation and handling procedures shall be resumed or terminated.” Article 81 of the Regulation on the Implementation of the Trademark Law provides that: “where the ownership of a registered trademark at issue is in an adjudication before the Trademark Office or the Trademark Review and Adjudication Board or in a trial by a people’s court, and the outcome of the case may affect the determination of the nature of the case, such a case falls into Paragraph 3 of Article 62 of the Chinese Trademark Law because there are disputes over trademark right ownership.”

Where an allegedly infringing trademark has been preliminarily examined and published or is pending in an opposition, as a general rule, the trial of a case involving such a mark shall not be suspended because the mark has not been registered. However, considering that the status of rights in an allegedly infringing mark may affect the determination of the nature of the case, law enforcement authorities may decide to suspend the investigation of the case in light of the actual use of the allegedly infringing mark, trademark opposition status, and other specific facts.

2. Christian Louboutin prevailed in a trademark infringement against an online reseller

Christian Louboutin is one of the world’s leading designer brands for men’s and women’s shoes, bags, and related accessories created in 1991 by Christian Louboutin himself. The Christian Louboutin brand has become a world-famous manufacturer of luxury shoes and opened retailers in more than 60 countries. Christian Louboutin registered the “CHRISTIAN LOUBOUTIN” mark, the “Louboutin” mark, and the “Louboutin and Design” mark in China. Lanli Co. opened a store named “Guangzhou Lanli International Trade Co., Ltd.” on the 1688 platform, used the said trademarks without Christian Louboutin’s authorization, and sold goods that infringed the said trademarks. Another company, Shiyu, posted a moment story on a WeChat account using the said trademarks without authorization and sold goods that infringed the said trademarks. The infringing activities of Shiyu can be traced back to 2015, which lasted for quite some time.

Lanli Co. and Shiyu jointly sold infringing goods, but did not submit evidence to prove the source of purchase of the infringing goods at issue. In addition, Lanli Co. operated the shop involved in this case as a manufacturer and advertised in details that “the disputed shoes can be customized and all shoes can be made.” Combining with Shiyu’s statements, such as “we are manufacturer” “can start making shoes tomorrow,” etc. the court found both Lanli Co., and Shiyu were manufacturing the disputed infringing goods.

Lanli Co. and Shiyu produced and sold the infringing goods at issue, which infringed upon Christian Louboutin’s registered trademark rights, and the court ordered the defendants to pay the Christian Louboutin RMB150,000 (USD23,540) in damages.

3. Starbucks was sued by an animation company after its popular bear-styled cake gone viral on the Internet

After Starbucks’ “Cub-styled Caramel Hazelnut Cake” became a popular hit food item, the Cub Animation Co., Ltd. (“Cub Animation”) filed a lawsuit in the Quanzhou Intermediate Court of Fujian Province on the grounds that the Quanzhou branch of Starbucks infringed upon its exclusive right to use the “Cub in Chinese and xiongzai” trademark in Class 30 and the “Cubs in Chinese” trademark for “Cookies; pastries; instant noodles; candies.” The Quanzhou Intermediate Court dismissed Cub Animation’s claims. Cub Animation appealed to the Fujian High Court. On September 29, 2021, the Fujian High Court rendered a second instance judgment rejecting Cub Animation’s appeal and affirmed the first instance judgment.

The Fujian High Court found that the trademark use in the Chinese Trademark Law meant using a trademark in commercial activities and can be used to identify the source of a product. Therefore, descriptive use to indicate the shape, quality, main raw materials, functions, means of use, weight, quantity or any other feature of a product shall not fall within the scope of trademark use in the Chinese Trademark Law. The disputed goods in this case was a cartoon cub-style cake containing hazelnuts. Therefore, the Quanzhou branch of Starbucks named it “Cub in Chinese Caramel Hazelnut Cake,” which was used to indicate the shape of the goods and was a descriptive use of the goods. This kind of behavior also complied with the people’s habit in their daily life to indicate food and other relevant goods by using the name of an animal. As long as such indication did not exceed the scope of proper and reasonable use, and did not cause the relevant public to confuse the source of the goods, it could be determined as a legitimate use. Therefore, the Fujian High Court dismissed Cub Animations’ claims.

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Weekly China Trademark News Updates

November 23, 2021

1. McDonald’s invalided the “Mai Ke Shi in Chinese & MKS” mark

The Beijing High Court recently issued a second instance judgment of the administrative dispute over the invalidation of the trademark with registration number 9631046 “Mai Ke Shi in Chinese & MKS” (“Disputed Mark”), rejecting the appeal of the CNIPA and upholding the first instance court’s finding that the Disputed Mark and the Cited Marks 1 to 4 constituted as similar trademarks on identical or similar goods. Therefore, the Disputed Mark should be declared invalid.

Disputed Mark	Cited Mark 1	Cited Mark 2	Cited Mark 3	Cited Mark 4

The Beijing High Court found that the Disputed Mark consisted of the English letters “Mks” and the Chinese character “Mai Ke Shi in Chinese” of which the initial letter “M” was a double arch graphic and prominently displayed. The Disputed Mark was almost identical in appearance to the highly distinctive and well-known “double arches” graphics of Cited Marks 1 to 3. The Cited Mark 4 was only composed of the Chinese character “Mai Ke in Chinese” and the Chinese character part of the Disputed Mark contained the Cited Mark 4 in its entirety, both of which have no specific meaning. The evidence on file is sufficient to prove that McDonald’s Cited Marks have certain popularity in burgers and other goods, and the Disputed Mark and the Cited Marks were similar in word composition, pronunciation, appearance, etc. When simultaneously using the said marks on similar goods on the market was likely to cause and misunderstanding of the source of goods by the relevant public. Therefore, the Disputed Mark and the Cited Mark 1 to 4 constituted as similar marks use on identical or similar goods as stipulated in Article 28 of the Trademark Law. The first instance judgment was correct, and the CNIPA’s appeal’s claim lacked legal basis and was not supported.

2. The “STOKKE” trademark was invalidated in a second instance judgement

The Beijing High Court rendered a trademark invalidation dispute decision between STOKKE AS (“Stokke”), the CNIPA, and the original third party Situoke (Shanghai) Biotechnology Co., Ltd. (“Situoke”). The judgement vacated the first instance court’s decision and ordered the CNIPA to reissue its decision regarding the Disputed Mark.

Regarding the first issue of this case, whether the registration of trademark with registration number 11102646 “STOKKE” (“Disputed Mark”) constitutes a situation stipulated in Article 13(3) of the Trademark Law 2013, the Beijing High Court found that although the evidence submitted by Stokke could prove that its “STOKKE” trademark with registration number G891394H (“Cited Mark”) in Class 12 on baby stroller goods had a certain degree of fame, it was not sufficient to be recognized as a well-known mark. The Disputed Mark’s registration would not likely to mislead the public and possibly damage Stokke’s interests. The Disputed Mark’s application did not fall into the situation stipulated in Article 13(3) of the Trademark Law of 2013. The first instance court judgment regarding this issue was correct.

Regarding the second issue, whether the Disputed Mark’s registration constitutes the situation of “obtaining trademark registration by other improper means” under Article 44(1) of the Trademark Law of 2013, the Beijing High Court found that, according to the evidence submitted by Stokke, before the Disputed Mark’s application date, the Cited Mark “STOKKE” had obtained a high degree of fame. The original owner of the Disputed Mark had applied for more than 600 trademarks including the Disputed Mark, among which a number of trademarks were identical or similar to the trademark “STOKKE,” which has been made highly known by Stokke, in Classes 11, 15, and 29, as well as in other classes. Other trademarks such as “Guo Long in Chinese,” “Mickey Mouse in Chinese,” “Alpha Dog in Chinese,” “Magic Monkey in Chinese” etc. were identical or highly similar to other trademarks with strong distinctiveness or with high fame. Such behavior had the obvious intention of copying and imitating others’ trademarks, and had exceeded the normal production and operation needs. On this basis, the intention of Situoke to free-ride on the popularity of the trademark “STOKKE” by receiving the Disputed Mark for improper benefits was obvious, which was contrary to the legislative intent of the Trademark Law. Accordingly, the Court has reason to believe that the Disputed Mark’s registration had disturbed the order of trademark registration management and constituted the situation of “obtaining registration by other improper means” as stipulated in Article 44(1) of the Trademark Law of 2013. The first instance judgment erred in the second issue and shall be revoked. New Balance Athletics, Inc and New Balance Trading (China) Co., Ltd. (together as “New Balance”) sued Putian Shengfengsheng Shoes Co., Ltd. (“Shengfengsheng”), Putian Wobaili Trading Co., Ltd. (Wobaili”), Wang Jinbiao, Gusu District Meibailu Shoe Store (“Meibailu”) for infringing its registered trademark the “N” logo with registration number 5942394 on Class 25 for “sneakers” (“Cited Mark”) in Suzhou Intermediate Court. The defendants cited its registered trademark “N & design” with registration number 10214341 (“Disputed Mark”).

3. The “Dior” trademark was recognized as a well-known mark and “Dike Diao in Chinese & DikeDior” was not allowed to be registered as a trademark

The Beijing High Court rendered a second instance trademark invalidation decision between the appellant Putian Changli Industry and Trade Co., Ltd. (“Putian Changli”) and the appellee, the CNIPA, and the third party in the original case, Christian Dior Fragrance Company (“Dior”), which the court upheld the first instance court judgment.

Disputed Mark	Cited Mark 1	Cited Mark 2

The Beijing High Court held that when the Disputed Mark was filed for registration, the Cited Mark 1 had been approved for registration and the Cited Mark 2 had not yet been approved for registration. Therefore, Article 13(2) of the Trademark Law 2001 should be applied to the Cited Mark 1, Article 13 (1) of the Trademark Law of 2001 should be applied to the Cited Mark 2.

The evidence submitted by Dior during the trademark administration proceeding and the first instance court can prove that before the Disputed Mark’s filing date, the Cited Marks 1 and 2 had been widely and extensively used and publicized in the China market for a long time and were widely known among the relevant public with a high fame. Dior submitted a prior ruling, which found that the Cited Marks 1 and 2 constituted as well-known marks on cosmetics and perfume goods before January 9, 2012. Therefore, the evidence on file was sufficient to find that the Cited Marks 1 and 2 constituted as well-known marks used on “cosmetics and perfume” and other goods. In the original case, Putian Changli also expressly recognized that the Cited Marks 1 and 2 constituted as well-known marks on cosmetic goods before the Disputed Mark’s filing date that was confirmed by the first instance court.

The Disputed Mark was a word mark consisted of “Dike Diao in Chinese & DikeDior” the Cited Mark 1 was the word mark “DIOR” and the Cited Mark 2 was the word mark “Dior in Chinese” The Disputed Mark included the Cited Marks 1 and 2 in its entirety. The Disputed Mark’s approved foods for facial cleaners, etc. were similar to the approved goods of the Cited Marks 1 and 2 for cosmetic goods, which the Cited Marks 1 and 2 were famous for, in terms of target consumer, sales place, function, and use. The approved goods for the Disputed Mark and the Cited Marks were similar goods or closely related goods. The Disputed Mark was a copy and imitation of the Cited Marks. Putian Changli also applied for trademarks similar to other famous brands, and its application for registration of the Disputed Mark was in bad faith. The registration and use of the Disputed Mark was likely to cause the relevant public believe that there was a specific connection between the Disputed Mark and the provider of goods of the Cited Marks, which improperly use the market reputation of the Cited Marks, and take up the Cited Marks of Dior’s fame without compensation for its efforts and substantial investments, cut off the relevant public to the association between Dior’s Cited Marks and Dior’s cosmetics and perfume related goods, weakened the Cited Marks’ well-known status, and caused damage to Dior’s interests as a well-known mark owner. Therefore, the Disputed Mark’s registration constituted the circumstances stipulated in Article 13(1) and (2) of the Trademark Law 2001 and should not be registered according to law. The first instance court did not err in its judgment and Putian Changli’s claims cannot be supported.

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