Weekly China Brand Protection News

January 18, 2025

1. Supreme People’s Court: A Trademark Should be Invalidated for Damaging Prior Domain Name Rights and Unfairly Preempting Prior Used Trademark with Certain Influence

In a retrial involving Hangzhou Huishu Zhitong Technology Co., Ltd. (“Huishu Zhitong”), the CNIPA, and the third party Hengsheng Technologies Inc. (“Hengsheng”) concerning trademark invalidation of the “DataFocus” trademark (Reg. No. 39744963) (the “Disputed Mark”), the Supreme People’s Court (“SPC”) found that the registration of the Disputed Mark violated Article 32 of the Trademark Law (infringed upon other’s prior rights and prior used mark). The SPC overturned the decisions of the first-instance and second-instance courts as well as the CNIPA’s ruling.

Guangzhou Anzheng Software Co., Ltd. (“Anzheng”) applied for the Disputed Mark on July 18, 2019, and registered on May 14, 2020, approved for use in services under Class 42 for “leasing web servers; computer software design; etc.” On August 6, 2020, Anzheng assigned the trademark to Hengsheng. Huishu Zhitong filed an invalidation request against Disputed Mark. After examination, the CNIPA and both the first-instance and second-instance courts upheld the trademark validity. Huishu Zhitong petitioned for a retrial with the SPC.

The focus of the retrial was whether the registration of the Disputed Mark violated Article 4 (bad faith application not intended for use shall be refused) and Articles 32 of the Trademark Law.

On Issue 1: Whether the registration of the Disputed Mark violated Article 32 of the Trademark Law.

First, regarding whether the registration of the Disputed Mark infringed upon others’ pre-existing rights (the first half of Article 32). The SPC held that “prior rights” refer to “civil rights” and “other lawful rights that should be protected” that existed before the application date of the Disputed Mark and still existed when the trademark was approved for registration. According to the provisions of Article 4 of the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in Civil Disputes Involving Computer Network Domain Names and Article 11 of the Interpretation of the Supreme People’s Court on the Application of the Anti-Unfair Competition Law of the People’s Republic of China, domain names are a type of civil rights protected by law. A domain name can be protected as a prior right under the Trademark Law if the following conditions are met:

1. The domain name registration date precedes the trademark application date.
2. The domain name has a certain level of fame.
3. The domain name and the Disputed Mark are identical or similar in terms of identification.
4. The goods or services that give the domain name a certain level of influence and the goods or services approved for use under the Disputed Mark are similar, likely leading to confusion among the relevant public.

Based on this case’s fact findings, before the application date of the Disputed Mark, the legal representative of Huishu Zhitong had registered the domain name “datafocus.ai” and authorized Huishu Zhitong to use it. The main part of this domain name was completely identical to the letters of the Disputed Mark. The content displayed on the website linked to this domain name involved data analysis, software applications, etc., which were related to the services of “computer programming; computer software design; etc.” approved under Class 42 of the Disputed Mark, constituting similar services in terms of purpose, content, and target audience. The evidence in the case could prove that, before the application date of the Disputed Mark, the “datafocus.ai” domain name had already gained a certain degree of fame through extensive promotion and use by Huishu Zhitong. If the Disputed Mark were used for similar services such as “computer software design,” which overlaps with the data analysis and software applications offered under “datafocus.ai,” the general attention of the relevant public would likely lead them to believe that the relevant services originated from the same entity or that there was some form of connection between the service providers, resulting in confusion or misidentification of the service source. Therefore, the registration of the Disputed Mark damaged Huishu Zhitong’s prior domain name rights.

Second, the registration of the Disputed Mark constituted preemptive registration of another’s prior used and influential trademark by improper means (the latter half of Article 32). The court held that evidence submitted by Huishu Zhitong in the first instance proved that before the application date of the Disputed Mark, it had already used the “DataFocus” trademark for data analysis and software application services and gained a certain level of fame and influence through promotion and use. The Disputed Mark’s English elements are identical to the “DataFocus” mark prior used by Huishu Zhitong. The approved services under Class 42, such as “computer software design,” were similar to the data analysis and software application services on which Huishu Zhitong had used its prior mark. Additionally, as a peer competitor in the software service industry, the original applicant of the Disputed Mark, Anzheng, was aware or should have been aware of the prior fame of Huishu Zhitong’s “DataFocus” mark. Nevertheless, it failed to reasonably avoid the conflict and still registered an identical mark for the same or similar services. Subjectively, this behavior is difficult to justify as proper and, objectively, it is likely to cause confusion or misidentification among the relevant public. Therefore, the registration of the Disputed Mark constituted improper preemptive registration of another’s prior used and influential trademark.

On Issue 2: Whether the registration of the Disputed Mark violated Article 4 of the Trademark Law.

The court held that the existing evidence failed to prove that the original applicant of the Disputed Mark, Anzheng, engaged in the bulk registration of trademarks for profit without the intention of use. Moreover, Huishu Zhitong acknowledged that Anzheng did not engage in large-scale trademark registration activities. Therefore, the Disputed Mark did not constitute the situation provided for in Article 4 of the Trademark Law, and this claim was not supported.

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