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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