Weekly China Trademark News Updates

August 24, 2021

1. An individual was sentenced to three years in prison for Illegal manufacturing the “Ferrero in Chinese” mark

On August 18, 2021, the Shanghai No. 3 Intermediate Court made a first-instance judgment on the case of defendant Liu illegally manufacturing the registered trademark of “Ferrero in Chinese” and unpacking and repacking the genuine products for sale. Liu was sentenced to three years in prison, suspended for five years, and fined RMB 300,000 (USD 46,200).

Defendant Liu, without the permission of the registered trademark right holder of “Ferrero in Chinese,” purchased 96 and 30 pieces of Ferrero chocolate products with low unit price with his brother for the purpose of obtaining illegal profit. Liu entrusted others to illegally manufacture packaging materials such as labels, bottom cards, plastic boxes, bottom brackets, outer packaging cartons, tapes, etc. with registered trademarks “Ferrero in Chinese.” Liu then hired workers to repackage the purchased chocolates with counterfeit packaging materials into products labeled with “Ferrero in Chinese” such as 8 pieces, 16 pieces, 24 pieces, 32 pieces and other high-unit-price chocolate products and sell them for profit.

From July to September 2020, the public security bureau successively seized more than 490,000 items suspected of counterfeiting Ferrero chocolate’s packaging, involving more than 800,000 “Ferrero in Chinese” related trademarks. The seized products were identified as not authorized by the right holder but used a mark identical to the right holder’s registered trademark. Upon random inspection, the 30-piece “Ferrero” hazelnut wafer chocolates produced abroad have the same features with the products produced by Ferrero. The 96 pieces, 48 pieces, and Collection96, etc. are all produced by Ferrero. The single chocolate balls inspected showed no shape, structure, and main raw materials difference from those produced by Ferrero. After auditing, from July 2018 to July 2020, Liu and others entrusted others to forge packaging materials bearing the registered trademark of “Ferrero in Chinese” for more than 5.65 million copies, worth more than RMB 1.7 million (USD 261,735). On July 13, 2020, Liu was arrested and confessed the above-mentioned criminal facts.

The Shanghai No. 3 Intermediate Court found that Liu entrusted others to forge 5.65 million copies of the registered trademarks of “Ferrero in Chinese” without the authorization of the right holder with the actual payment for the of more than RMB 1.7 million (USD 261,735). The circumstances were particularly serious and Liu’s behavior constituted the crime of illegally manufacturing registered trademark logos. In a joint crime, the defendant Liu was the principal offender and should be liable for all the crimes in which he participated. Liu truthfully confessed the facts of the crime upon arrest so his sentence can be reduced accordingly. Liu voluntarily pleaded guilty, obtained compensation through his family members to compensate the right holder, and paid a fine before the court, so a lenient sentence was appropriate.

2. The “JEEP” mark was cited to invalidate the “JCEIP” mark

The Beijing Higher Court made a second instance judgment on the invalidation of the trademark “JCEIP” with registration no. 11775571, dismissed the CNIPA’s appeal request, and upheld the first instance court’s decision that Wei Xiqin’s disputed trademark constituted as a similar trademark on the same or similar goods to the cited mark owned by Fiat Chrysler America Co., Ltd. (“Fiat”).

Disputed Mark	Cited Mark 4 – 7	Cited Mark 8	Cited Mark 9

The Beijing Higher Court found that the approved “shoes; hats; socks” goods for the disputed mark were basically the same as the “shoes; hats” approved for use under the Cited Marks 4 to 9 in terms of functions, uses, production departments, sales channels, and consumer groups, which constituted as identical or similar goods. The disputed mark was a word mark consisting of the letters “JCEIP”. The Cited Marks 4 to 8 were word marks consisting of the letters “JEEP.” The Cited Mark 9 was a word mark consisting of “JEEP in Chinese”. Compared with the Cited Marks 4 to 8, the Disputed Mark was similar in terms of text composition, pronunciation, and overall appearance, and constituted as a similar mark. Although the Disputed Mark was different from the Cited Mark 9, according to the evidence submitted by Fiat, the Cited Marks 4 to 9 were used on clothing, shoes and other goods, and had obtained a certain degree of popularity. A relatively stable correspondence was established between “JEEP” and “JEEP in Chinese”, so the Disputed Mark and the Cited Mark 9 constituted as similar marks. Considering the degree of similarity between the Disputed Mark and the Cited Marks and the relevance of the goods used, if the Disputed mark and the Cited Marks 4 to 9 were used together on identical or similar goods, where the relevant public paid only general attention, they would easily be confused and misidentify the source of the goods. Thus, the Disputed Mark and the Cited Marks 4 to 9 constituted as similar marks used on identical or similar goods. Accordingly, the judgment of the first instance court that the registration of the Disputed Mark violated Article 30 and Article 31 of the Chinese Trademark Law 2014 should be affirmed.

3. The CNIPA publicly solicits opinions on the “General Trademark Violation Judgment Standards“

To strengthen trademark management, improve trademark enforcement guidance, and unify enforcement standards, the CNIPA has drafted the “General Trademark Violation Judgment Standard (Draft for Comment),” which will be publicly soliciting opinions until October 1, 2021.

The “General Trademark Violation Judgment Standard (Draft for Comment)” stipulates ten general trademark violations, including: Violation of Article 6 of the Chinese Trademark Law, that is, must use a registered trademark but failed to use it; violation of Article 10(i) of the Chinese Trademark Law, that is, use logos that are not allowed to be used as a trademark; violation of Article 14(5), that is, use the words “well-known mark” during business activities; violation of Article 49(i) of the Chinese Trademark Law, that is, in the process of using the registered trademark, the registrant changes the registered trademark, registrant’s name, address or other registration matters by himself; violation of Article 52 of the Chinese Trademark Law, that is, uses unregistered trademarks as registered trademarks; violation of Article 3 of the Several Rules on the Regulation of Trademark Registration, that is, applying for trademark registration in bad faith and etc.

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Weekly China Trademark News Updates

August 17, 2021

1. The “BVLGARI and BVLGARI in Chinese” mark was recognized as a well-known mark

Bulgari S.P.A. (“Bulgari”) filed an invalidation request against Cai Qinghe’s trademark with reg. no. 6085778 (“Disputed Mark”) based on its prior trademark with reg. no. 3811212 “” in Class 14 and International trademark with reg. no. G761852 “” in Class 42.

Reg. No. 3811212             Reg. No. G761852

Disputed Mark

Bulgari’s Prior Marks

Upon hearing, the Beijing High Court found that the invalidation request was filed on April 2, 2017, more than five years after the Disputed Mark’s registration date (November 6, 2011). Therefore, Bulgari’s invalidation request based on Article 28 and Article 31 of the Chinese Trademark Law 2001 (“TM Law 2001”) shall be rejected. However, combined with the journals and magazines submitted by Bulgari and various media reports on Bulgari regarding its “BVLGARI and BVLGARI in Chinese” brand jewelries and watches, national library search reports, award certificates and materials, introduction to the distribution of Bulgari specialty stores, and the lease contract of its China retail stores, lease contracts and photos of its China franchised stores and watch counters, sales invoices and bank card slips, records of administrative and judicial protection of the “BVLGARI and BVLGARI in Chinese” trademark, and other evidence can prove that Bulgari has carried out long-term and continuous promotion and sales of its “BVLGARI and BVLGARI in Chinese” jewelries and watch products in China. Bulgari had obtained a wide range of publicity and high sales income. Based on the foregoing, it can be determined that the “” mark in Class 14 with reg. no. 3811212 had obtained a great reputation and influence on the “decoration (jewelry); watch” related goods and had been widely known to the public, which constituted as a well-known trademark under Article 13 Paragraph 2 of the TM Law 2001. The Beijing High Court concluded that the Disputed Mark’s registration may improperly took advantage of Bulgari’s well-known trademark’s market reputation and damaged its rights, which violated Article 13 Paragraph 2 of the TM Law 2001.

2. Dr. Martens’ “Marten Boots in Chinese” was found to be lack of distinctiveness

Dr. Martens International Trading GmbH is the owner of the well-known footwear brand “Dr. Martens.” Its Chinese trademark “Marten boots in Chinese” in Class 26 was rejected by the CNIPA citing the mark directly referred to the function and purpose of the goods. After the first and second instances, both the Beijing Intellectual Property Court and the Beijing High Court found that “Marten boots” is a type of leather shoes, and when such mark was use on “shoelaces” and related goods in Class 26 directly indicated the function and purpose of the goods. Such use was difficult to distinguish the mark and the source of goods based on the relevant consumer’s knowledge. Moreover, Dr. Martens did not submit sufficient evidence to prove that the “Marten Boots in Chinese” mark had obtained distinctiveness through its use (Beijing East IP’s search of the prosecution history of “Marten Boots in Chinese” revealed that the mark in Classes 25 and 35 was also rejected based on the same reasoning).

3. Beijing Municipal Intellectual Property Office solicits public opinions on the “Beijing Intellectual Property Rights Protection Regulations (Draft for Public Comment)“

The Beijing Municipal Intellectual Property Office issued the “Beijing Intellectual Property Rights Protection Regulations (Draft for Public Comment)” (“Regulation”) to solicit public opinions. The Regulation is divided into general provisions, administrative and judicial protection, coordinated protection, promotion and service, mediation of multiple disputes, liabilities, and supplementary provisions, with a total of 7 chapters and 60 articles. The Regulation aims to further strengthen the comprehensive protection mechanism of intellectual property rights through local legislation, improve the comprehensive protection system of intellectual property rights, strengthen the construction of various protection systems, and enhance the system protection capabilities of strict protection, incentives, creation, and promotion of application. Follow the concept of strengthened intellectual property protection is protecting innovation and provide better legal protection for the capital’s high quality innovation developments.

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Weekly China Trademark News Updates

August 10, 2021

1. Additional document is required when requesting Well-Known Mark protection from Sept. 1

On August 6, 2021, the Trademark Office of the CNIPA issued a notice requesting that, from September 1, 2021, parties requesting well-known marks protections in opposition and invalidation actions must submit, along with the arguments of grounds, an Undertaking of Good Faith for Requesting Well-Known Marks Protection, signed and sealed by the interested party and its trademark agency and agent. The quintessential part of the content reads as follows:

1. We understand the relevant provisions of the Chinese Trademark Law, Regulations on the Implementation of the Chinese Trademark Law, Regulations on the Recognition and Protection of Well-Known Marks, and other laws and regulations on the recognition and protection of well-known marks, and have submitted materials as requested to follow the principle of good faith.
2. We guarantee that the relevant information and evidentiary materials in the opposition and invalidation documents are true, accurate, and complete, and there are no false circumstances such as forgery, alteration, concealment of evidence, instigation, bribery, and coercion of others to give false testimony.
3. We guarantee that there are no dishonest acts such as malicious collusion with the adversary, and no other acts of fraudulently obtaining protection of well-known trademarks by improper means.

Recently, many CNIPA issued documents are related to well-known marks. Among them, one of CNIPA’s replying letter to a suggestion raised in the National People’s Congress session specifically mentioned, “Currently, the CNIPA is organizing well-known marks information that has been administratively recognized and used continuously over the years, striving to establish and improve the well-known marks database, … which will, first, be opened to trademark administrative law enforcements to support law enforcement in various places, and will be opened to the public in a later time.” Meanwhile, the draft of the “Regulations on the Recognition and Protection of Well-known Marks” will be revised and promulgated as soon as possible.

Here are additional news regarding the new well-known mark protection requirements in Chinese:

http://sbj.cnipa.gov.cn/tzgg/202108/t20210806_333421.html#

https://www.cnipa.gov.cn/art/2021/7/27/art_516_166276.html?xxgkhide=1

https://www.cnipa.gov.cn/art/2021/7/27/art_516_166274.html?xxgkhide=1

2. Wrigley obtained a well-known mark recognition and successfully invalidated the “Yida Jiebai” trademark used on toothpaste and other products

Guangzhou Qiancai Cosmetics Co., Ltd. (“Qiancai”) was assigned the “Yida Jiebai” trademark on August 20, 2010. The trademark was filed on September 5, 2005 and approved on May 28, 2009 in class 3 “soap; toothpaste; shampoo; body lotion; cosmetics; washing powder; detergent” goods. On November 14, 2016, Wrigley cited its “Yida” (Extra in Chinese) to file an invalidation to the Trademark Review and Adjudication Board (“TRAB”) against the disputed trademark.

The original TRAB found that the disputed trademark’s registration violated Article 13 of the Chinese Trademark Law 2001, and invalidated the disputed trademark. Qiancai, unsatisfied, appealed to the Beijing Intellectual Property Court and the Beijing High Court successively.

Recently, the Beijing High Court made a final judgment and concluded that the evidence submitted by Wrigley can prove that the cited trademark has been continuously promoted and used by Wrigley before the filing date of the disputed trademark and has been well known among the relevant public on “non-medical chewing gum” goods. Both the disputed trademark “Yida Jiebai” and the cited trademark contained the word “Yida” and were similar in terms of composition and pronunciation, so the disputed trademark constituted a copy or imitation of the cited trademark. Products such as “toothpaste; soap” approved for use under the disputed trademark have a certain relevance to the “non-medical chewing gum” goods cited by Wrigley. Considering that the cited trademark was not an inherent term in Chinese, its distinctiveness was high, the registration of the disputed trademark was sufficient to confuse the relevant public to believe that the disputed trademark and the cited trademark had a considerable degree of association, which may damage the interests of Wrigley.

Although Wrigley filed the invalidation after five years from the registration date of the disputed trademark, there were provisions in the Chinese Trademark Law for the time limit for filing invalidation. “For malicious registration, the owner of a well-known trademark is not subject to the five-year time limit.” The evidence submitted by Wrigley can prove that the cited trademark had reached a well-known status on the “non-medical chewing gum” goods before the application of the disputed trademark was filed. The original registrant of the disputed trademark should be aware of Wrigley’s cited trademark, and the application for registration of the disputed trademark completely contains the cited trademark, which could hardly be considered as to have a subjective goodwill. Therefore, Wrigley’s invalidation of the disputed trademark should not be subject to the five-year time limit.

In summary, the Beijing High Court found that the registration of the disputed trademark violated Article 13 of the Trademark Law 2001, and affirmed the first instance court’s decision.

3. Reversal of the second instance trial found Ralph Lauren not infringing

Guangzhou Aichi Leather Co., Ltd. (“Aichi”), the owner of the “POLO” mark with reg. no. 3301575 in class 18 “wallets, school bags, small wallets, handbags, travel bags (cases), etc.”, sued Ralph Lauren to the Chaoyang People’s Court of Beijing, requesting an order to stop the infringement and compensate for economic losses and other legal expenses.

The Chaoyang People’s Court of Beijing found that Ralph Lauren’s prominent display or independent use of “POLO” on the alleged infringing products and tags could easily cause relevant consumers to be confused and misidentify the source of the goods, which infringed on Aichi’s trademarks rights. Considering factors such as the location, scale, quantity, and duration of the stores operated by Ralph Lauren, the unit price of the alleged infringing goods, and the degree of subjective fault of Ralph Lauren, the Chaoyang People’s Court of Beijing ordered Ralph Lauren to compensate Cichi for economic losses of RMB 3 million (USD 462,900).

Ralph Lauren appealed to the Beijing Intellectual Property Court. The court recently made a final judgment in favor of Ralph Lauren’s appeal request, revoked the first instance judgment and dismissed Aichi’s request. The court found that: although the word “POLO” was embroidered or highlighted on some of the goods, from the perspective of the specific usage and usage scenarios of the alleged infringing mark, the said allegedly infringing goods were all displayed and sold at Ralph Lauren shops, and all labeled with “RALPH LAUREN” and “Ralph Lauren Trading (Shanghai) Co., Ltd.”, which clearly indicated the provider of the alleged infringing goods. On the contrary, Aichi did not provide evidence of use of the disputed trademark on the allegedly infringing goods and that its trademark had obtained certain influence through use. Therefore, when consumers entered Ralph Lauren stores to purchase related goods, they will clearly recognize that the goods they bought were from Ralph Lauren without associating them with Aichi, or mistakenly believing that there is specific relationship between the two entities. Accordingly, the use of the alleged infringing mark would not cause the relevant public to confuse or mistake the source of the goods.

As far as the subjective intention of taking advantage of other’s goodwill, the evidence in the case proved that Ralph Lauren’s registration of multiple “POLO” and “POLO RALPH LAUREN” trademarks in multiple related classes, and the extensive promotion and use of “POLO” and “RALPH LAUREN” on clothing and other goods has established a stable correspondence between the “RALPH LAUREN” logo with Ralph Lauren and its affiliates and has gained a certain degree of popularity and influence. However, Aichi did not provide evidence to prove its use of the disputed trademark on the allegedly infringing goods and that its trademark had obtained certain influence through use. Therefore, Ralph Lauren’s selling of the allegedly infringing goods in its stores did not have subjective bad faith in taking advantage of Aichi’s goodwill.

Accordingly, although Aichi had the right to claim rights as the legal rightsholder of the disputed trademark, Ralph Lauren’s use of the alleged infringing mark will not cause market confusion. The Chaoyang People’s Court of Beijing erred in its findings and should be amended.

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Weekly China Trademark News Updates

August 3, 2021

1. Licensed “Mulinsen in Chinese” infringed “FILA”

FILA Luxembourg S.à.r.l. (“FILA”) sued Fujian Shishi Fusheng Footwear Co., Ltd. (“Fusheng”) for two casual shoes and slippers that simultaneously printed the “Mulinsen in Chinese” trademark and a logo similar to the “FILA” trademark.

Fusheng asserted that it was not the products’ manufacturer and provided the trademark licensing agreements signed with Zhuzhou Jiamuhang Trade Development Co., Ltd. (“Jiamuhang”) and the approval issued by Jiamuhang that the alleged infringing products were produced by it. Accordingly, Fusheng asserted that the alleged infringing products were all produced by Jiamuhang, and Fusheng did not produce or sell the alleged infringing products.

The Fujian High Court found that the alleged infringing products bore the “Mulinsen in Chinese” trademark held by Fusheng, and that Fusheng’s corporate information was printed on the shoe box. Both the trademark and manufacturer information pointed to Fusheng. If there is no evidence to the contrary, it should be determined that Fusheng is the manufacturer of the alleged infringing product. Even if the alleged infringing product was produced by Jiamuhang without authorization, it would be an internal act of Jiamuhang violating the agreement with Fusheng in the performance of the trademark licensing agreement. Moreover, according to the agreement between the two parties, Fusheng should have known of the production of the alleged infringing products, thus, Fusheng should be liable for the legal consequences of trademark infringement caused by such act.

2. In the first half of 2021, intellectual property infringement crimes were mainly counterfeiting registered trademarks and selling products with counterfeit registered trademarks, which accounted for 80% of the total prosecuted cases

Last year, the Supreme People’s Procuratorate established an Intellectual Property Procuratorate Office to implement centralized and unified intellectual property criminal, civil, and administrative procuratorial work, and carried out pilot work Beijing, Shanghai, and nine other cities.

In terms of criminal prosecution, the efforts to handle cases have been significantly increased. From January to June 2021, procuratorial organs across the country prosecuted 6,017 people for intellectual property infringements, a 12.6% year-on-year increase. Among them, the counterfeiting registered trademarks crime and the selling products with counterfeit registered trademarks crime accounted for 80% of the total prosecuted cases.

In terms of civil prosecution, intellectual property related cases have also increased significantly. From January to June 2021, a total of 100 effective civil judgments and mediation cases involving intellectual property and competition disputes were accepted, an 88.7% year-on-year increase. Among them, there were 63 intellectual property rights disputes and infringement disputes, accounting for 63% of the total accepted.

3. The CNIPA: Continue to maintain a high-pressure state of combating malicious trademark registration applications

Recently, a reply letter issued by the CNIPA pointed out that under the current legal and policy framework, it is difficult to increase the trademark review power of the local administration of market regulation. The CNIPA will continue to maintain a high-pressure state of combating malicious trademark registration applications, strengthen credit supervision in the trademark field, actively promote the revision of relevant rules and regulations, and conduct research and demonstrations on key issues such as regulating malicious trademark registrations and strengthening the obligation to use trademarks in order to further improve trademark laws, systems, and laying the foundation.

 

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Quarterly China Trademark News Updates

April – June 2021

1. Notable trademark and anti-unfair competition cases

a. LEGO won RMB 30 million in a trademark infringement dispute

The Guangdong High Court rendered the final decision regarding the trademark infringement and unfair competition disputes between the “LEGO in Chinese (乐高)” mark owned by LEGO Juris A/S (“LEGO”) and the “Le Pin in Chinese (乐拼)” mark owned by Meizhi Zhijiao Technology Co., Ltd. (“Meizhi”). The court held that Meizhi and other defendants infringed upon LEGO’s trademark right and their acts amounted to unfair competition, and awarded LEGO economic loss and reasonable legal cost of RMB 30 million (USD 4.58 million).

The court acted as the second instance court found that Meizhi’s “Le Pin in Chinese (乐拼)” mark was highly similar to the “LEGO in Chinese (乐高)” mark in terms of color combination, presentation, and overall appearances, which was likely to cause confusion to the relevant public and weakened the distinctiveness of “LEGO in Chinese,” and damaged LEGO’s market reputation.

Meizhi had been copying LEGO’s products for more than four years, infringed upon eight of LEGO’s registered trademarks and one influential trade name. Between September 11, 2017, and April 23, 2019, Meizhi’s infringing products collected unjustifiable income of RMB 330 million (USD 50 million), and combining with the sales records provided by Taobao, it can be reasonably presumed that “Le Pin in Chinese (乐拼)” products collected over RMB 500 million (USD 76 million) unjustifiable income. Using the industrial profit as a scale, the overall profit of the infringing products was over RMB 160 million (USD 24.4 million).

The court ordered a high damage not only because Meizhi had obvious bad faith in copying and imitating LEGO’s trademarks, but also because Meizhi’s long-term, extensive, and highly-profitable infringements of LEGO’s trademarks.

b. Bulgari won against fake Serpenti jewelry trademark disputes

The Beijing Intellectual Property Court (“the Beijing IP Court”) recently held that the “snake head design” mark owned by an individual Liu with reg. no. 15911982 (“Disputed Mark”) infringed upon Bulgari S.P.A.’s (“Bulgari”) copyright and should be cancelled. The court found that Bulgari’s Serpenti design was a pictorial and unique design that can be protected under the Chinese Copyright Law as an artwork. Bulgari submitted sufficient evidence proving that it enjoyed copyright for the snake head design before the Disputed Mark’s application date. Moreover, Bulgari’s evidence showed that Liu once owned a business related to “purse,” which overlapped with Bulgari’s scope of business and suggested that Liu may or should’ve known about Bulgari’s Serpenti design. Considering both the Disputed Mark and Bulgari’s Serpenti design have drawn ideas from snake head, the overall appearance, composition, visual effect, and expression were all similar, the Disputed Mark constitutes as a similar mark to Bulgari’s Serpenti copyrighted design.

Infringing Mark	Bulgari’s Serpenti Jewelry

c. Alibaba was fined for RMB 18.22 billion for abuse of market dominance

On April 10, 2021, the State Administration of Market Regulation (“SAMR”) rendered a decision finding Alibaba Group Holding Limited (“Alibaba”) abused its market dominance, imposed a fine of RMB 18.22 billion (USD 2.79 billion), and requested Alibaba to conduct full rectification and operate in compliance with laws and regulations.

In its decision, the SAMR found that Alibaba’s operations have “occupied a relatively high market share for a long period of time, which enjoys a very high market recognition and consumer awareness, and there is a high cost for operators to move away from Alibaba’s platforms.” Alibaba had a dominant position in the online retail service market in China.

Since 2015, in order to restrict other competitions, maintain and strengthen its market position, Alibaba abused its market dominance by not allowing business operators on its platform to operate or participate in sales events on other competing platforms. Further, Alibaba imposed various awards and punishments in order to carry out its “choice between the two” (business operators can only choose either Alibaba or other competing platforms but not both) implementation.

Alibaba’s actions not only maintained and strengthened its market position, but also deviated from the development concept of economic openness, tolerance, and sharing. Such actions excluded and restricted relevant market competition, harmed the interests of business operators and consumers on the platform, and weakened innovation and development vitality. Alibaba’s actions also hindered the healthy development of platform economy in a standardized, orderly, and innovative manner.

Click here for SAMR’s official press release and its administrative decision and guidance in Chinese.

d. “PENFOLDS in Chinese” recognized as an unregistered well-known trademark

Southcorp Brands Pty Limited (“Southcorp”) sued Huaian City Huaxia Manor Brewing Co., Ltd. and Hangzhou Zhengsheng Trading Co., Ltd. (together as “the Defendant”) for trademark infringement. The court held that Southcorp’s “PENFOLDS in Chinese” mark constituted as an unregistered well-known mark, and the defendants’ use of “PENFOLDS in Chinese” mark infringed upon Southcorp’s right to the unregistered well-known mark. Meanwhile, the “Penfunils” mark used by the Defendants constituted as a similar mark to Southcorp’s “PENFOLDS” mark in terms of letter composition, order, and pronunciation, and such use infringed upon Southcorp’s registered trademark right for “PENFOLDS.” The court ordered the defendant to compensate Southcorp’s economic lost and reasonable enforcement costs of RMB 1 million (USD 154,100).

e. Michelin won in a trademark infringement retrial

Compagnie Generale Des Etablissements Michelin (“Michelin”) sued Ningbo Jaiqi Handicraft Co., Ltd. (“Jaiqi’) for trademark infringement. The Guangdong High Court found that the only differences between the two Micheline’s Cited Marks was its gestures, the rest of Michelin Man’s characteristics were identical, which suggested that the Michelin Man’s characteristics were the heart of its Cited Marks’ distinctiveness. Through long-term promotion and use, the Michelin Man’s characteristics grew more prominent and triggered the relevant public to associate Michelin upon seeing the Michelin Man.

Infringing Marks	Michelin’s Marks

When comparing the disputed cartoon character with the Cited Marks, although the disputed cartoon character only had a smiling face, the component and details of the smiling face were nearly identical with the Cited Marks’ characteristics. Considering Michelin Cited Marks’ distinctiveness and fame, such smiling face was likely to cause the relevant public to associate the Michelin Man image presented in the Cited Marks and cause confusion. Thus, the disputed cartoon character  shall be deemed as similar to the Cited Marks. Additionally, the disputed inflatable doll also closely reassembled the Michelin Man’s characteristics and shall be deemed as similar with the Cited Marks. The court concluded that Jaiqi infringed upon Michelin’s trademark rights and ordered compensation for economic loss and reasonable legal costs of RMB 100,000 (USD 15,416).

f. First criminal copyright infringement case involving an artwork came into effect with RMB 410,000 in penalty in Shenzhen

Recently, the Shenzhen Longgang District Court (the “First Instance Court”) concluded that the defendant WANG infringed upon the plaintiff’s copyright. The Shenzhen Intermediate Court rendered the final decision as the second instance court which rejected WANG’s petition to appeal and affirmed the First Instance Court’s decision. In the First Instance Court decision, WANG was sentenced to 3 years and 8 months in prison with penalty of RMB 410,000 (USD 63,675). The infringing toys used as evidence during the trial were confiscated and destroyed. This is the first criminal copyright infringement case involving an artwork in Shenzhen.

Between October 2016 and November 2018, without authorization from CCA and B, LLC. (“CCA”), Wang purchased the infringing Christmas genie dolls and reindeer dolls that he knew were infringing CCA’s copyright. WANG made unjustified profits from selling the dolls on its Alibaba and Amazon online stores.

On October 31, 2018, Longgang Branch of Shenzhen Municipal Administration for Market Regulation seized 8,340 “Christmas genie dolls” and 215 “reindeer dolls” for sale in WANG’s company. Identified by the Copyright Appraisal Committee of Copyright Protection Center of China, these dolls constated as copies of the “Christmas genie dolls” and “reindeer dolls” owned by CCA. They were infringing copies of “Christmas Genie dolls” and “reindeer dolls.” On July 15, 2019, the case was transferred to Longgang Public Security Bureau.

It was verified that from May 31, 2017, to October 30, 2018, WANG sold the infringing products through three online stores and earned a total amount of RMB 557,000 (USD 86,500). The value of the seized infringing products for sale was about RMB 213,000 (USD 33,000). The total unjustified profit was RMB 771, 000 (USD 119,700).

After hearing, the First Instance Court concluded that WANG’s operation purpose was to obtain unjustified profits by copying and selling copyrighted artworks without authorization, which amounted to RMB 771, 000 (USD 119,700). Such circumstance was particularly serious and constituted as a crime of copyright infringement.

 g. Weibo sued Toutiao for unfair competition and won a RMB 20 million verdict in compensation

Beijing Weimeng Chuangke Network Technology Co., Ltd. (“Weibo” a.k.the Chinese Twitter) sued Beijing ByteDance Technology Co., Ltd. (“Toutiao”) based on the grounds that Toutiao’s relevant content constituted unfair competition before the Haidian District Court of Beijing. The court found that displayed content and disseminated information of the Weibo content involved in this case was not purely user-generated, the information involved were added with Weibo’s resources and services, which constituted as the “legal interests” of Weibo according to Article 2 of the Chinese Anti-Unfair Competition Law. Toutiao targeted Weibo’s contents and transferred the said contents without authorization, particularly with those Weibo accounts that had large number of fans, more market impact, celebrities’ accounts, and major VIP accounts. Toutiao’s actions substantially substituted Weibo and damaged its business interests. The court ruled in favor of Weibo for economic loss of RMB 20 million (USD 3.14 million) and reasonable legal costs of RMB 1.15 million (USD 180,000).

h. Land Rover prevailed against Landwind X7

On May 27, 2021, the Beijing IP Court concluded the final decision of an unfair competition lawsuit between Jaguar Land Rover Limited (“JLR”) and Jiangling Holdings Co., Ltd. (“JLH”) and Beijing Dachang Landwind Motor Sales Co., Ltd. (“Landwind”). The court ordered JLH and Landwind to immediately stop all unfair competition acts, publish a statement to eliminate negative impacts, and compensate for losses and reasonable expenses of RMB 1.5 million (USD232,200).

In this case, JLR claimed five design features of its “Range Rover Evoque” had the characteristics that were different from the common exterior design of ordinary cars, and these designs were distinctive as product decorations. JLR’s evidence were also sufficient to prove that its “Range Rover Evoque” car enjoyed certain fame and influence in China’s car industry. Accordingly, Range Rover Evoque’s exterior decoration when used as product shape decoration satisfied the “decoration with certain influence” as stated in the Chinese Anti-Unfair Competition Law. The shape and decoration used by JLH on the “Landwind X7” car was enough to confuse and mislead the relevant public with JLR’s “Range Rover Evoque,” which constituted as unfair competition.

The first instance court calculated the damages based on the sales volume and unit profit of the infringing product, while referring to the 2015 domestic vehicle industry sales profit of domestically funded vehicle companies published by “National Passenger Car Information Exchange Association,” the sales data and the lowest unit price published on the official website of JLH. Also considering the duration of the unfair competition in the case, the role of the car product shape and decoration played during sales of “Landwind X7,” the range of sales, and the popularity of the “Range Rover Evoque” car shape, the second instance court affirmed the first instance court’s calculation methods.

i. Unauthorized use of New Balance’s “N” logo amounted to unfair competition

The Beijing IP Court affirmed the first instance court judgment regarding an unfair competition lawsuit between New Balance Trade (China) Co., Ltd. (“NB”) and Jiangxi Xinbailun Sports Goods Co., Ltd. (“Jiangxi Xinbailun”), Guangzhou Xinbailun Leading Footwear Co., Ltd., Guangzhou Xinbailun Enterprise Management Co., Ltd. (together as “Guangzhou Xinbailun”) and its executive director and general manager Lelun Zhou.

In the first instance judgment, the Beijing Dongcheng District People’s Court found that NB lacked evidence to support its claims that the “New Balance in Chinese” was an influential trade name or was a special name for the “New Balance” sneakers products. However, the uppercase bold “N” letters in the upper side of the shoes constituted as unique decoration. Thus, the use of the “N” logo on its sneakers products by Jiangxi Xinbailun and Guangzhou Xinbailun amounted to unfair competition for using other’s unique decoration without authorization.

Regarding the amount of compensation, the first instance court considered the fame of NB’s sneakers, uniqueness of decoration, subjective bad faith of Guangzhou Xinbailun and Jiangxi Xinbailun, the nature, method, duration, influence area involving the unfair competition behavior, related products sales prices and other factors, and ordered Guangzhou Xinbailun and Jiangxi Xinbailun compensate NB for economic loss of RMB 1 million (USD 154,700) and reasonable costs of RMB 100,000 (USD 15,470).

Guangzhou Xinbailun and Jiangxi Xinbailun were unsatisfied with the judgment, and NB was unsatisfied with the court’s findings of “New Balance in Chinese” and the compensation amount ordered. All parties appealed the first instance judgment to the second instance court, the Beijing IP Court. The Beijing IP Court affirmed the first instance court’s judgment.

2. Notable trademark laws, regulations, and news updates

a. The CNIPA: Enlist bad faith applicants into blacklist

From the beginning of 2021, the China National Intellectual Property Administration (“CNIPA”) has rejected more than 10,000 bad faith trademark applications citing the 2019 Chinese Trademark Law. The CNIPA has also created a blacklist system to include applicants who filed more bad faith applications and registrations. This is to closely supervise new trademark applications. So far, there are about 1,000 bad faith trademark applicants added into the blacklist.

The average trademark examination time had been shortened to 4 months.

b. The CNIPA issued the Notice of Deepening “Deregulation, Innovation, and Service” in the Intellectual Property Industry on Optimizing and Improving Innovation Environment and Business Operation Environment

On May 11, 2021, the CNIPA issued the Notice of Deepening “Deregulation, Innovation, and Service” in the Intellectual Property Industry on Optimizing and Improving Innovation Environment and Business Operation Environment. The notice includes the following news.

1. Continue to reduce trademark examination period. Aim to regulate trademark examination time within four months. The entire trademark application proceeding will be reduced from eight months to seven months. At the end of 2021, examination time for trademark assignments, oppositions, rejection appeals, and invalidations will be reduced to one and half months, twelve months, five and half months, and nine months, respectively. Examination time for trademark applications and renewals filed electronically will be reduced by one fifth.
2. Strengthen trademark examination supervision. Rigorously crack down on bad faith trademark registration and refuse to accept or fast-reject trademark applications with significant adverse effects according to the law. Promptly disclose typical bad faith trademark registration cases in time. Include bad faith trademark registration without intent to use into credit supervision according to the law.
3. Fully implement electronic trademark registration certificate, accelerate the use of the electronic trademark registration certificate on e-commerce platform, enforcement, proffer evidence and other fields.
4. Establish and improve the green channel acceleration model of trademark examination. Priority examination for qualified trademark rejection appeals and oppositions in order to assist applicant in obtaining trademark certificate and safeguard legal rights and interests.
5. Strengthen the crack down on illegal agency. Rigorously crack down on the forgery of legal documents and seals and disrupt the order of the agency market by fraud and false publicity. Strengthen the credit supervision and punishment of illegal agency in accordance with the laws and regulations.

Fully exploit the value of intellectual property information. On the basis of data security, fully release basic data of intellectual property right, and fully employ the strategic resource value of intellectual property information.

c. The Supreme People’s Court issued the Official Reply of Defendant’s Request for Compensation for Reasonable Expenses due to Abuse of Rights by the Plaintiff in IP Infringement Litigation

On June 3, 2021, the Supreme People’s Court (“SPC”) has issued the Official Reply of Defendant’s Request for Compensation for Reasonable Expenses due to Abuse of Rights by the Plaintiff in IP Infringement Litigation (the “Reply”) to be implemented immediately.

The Reply confirmed that, in an intellectual property infringement litigation, if the defendant can provide evidence to prove that the lawsuit brought by the plaintiff constitutes the abuse of rights according to the law, the people’s court should uphold the defendant’s request that the plaintiff should compensate for the reasonable attorney fee, transportation fee, accommodation fee, and other expenses. The defendant may also file another separate lawsuit to require the plaintiff to compensate the said reasonable expenses and fees.

d. The CNIPA: Trademark Examination and Adjudication Standards (Draft for Comments)

The CNIPA launched the revision of the current Trademark Examination and Adjudication Standards in July 2020 and published the draft for comments from the public. The revised content mainly includes two aspects: the first is to add new standards on trademark formality examination and trademark affairs examination; the second is to revise and improve the substantive standards of trademark examination and adjudication. The first aspect includes the standard for applying Article 4 of the Chinese Trademark Law, clarifying the applicable factors, considerations, and applicable circumstances for malicious trademark applications filed without the intent to use. The second aspect includes revision and improvement of applicable standards of other provisions in the Chinese Trademark Law, including the applicability of prohibited filings and prohibited use, standards and considerations for determining identical or similar trademarks, standards for determining distinctiveness for 3D marks, color combination marks, sound marks, etc.

3. Trademark Practices Series – Bad Faith Application in China

Bad faith trademark applications, a constant headache for foreign brand owners due to China’s first-to-file system. In this new series, we will provide our experiences to decipher the laws, regulations, and actual practices on how to tackle the bad faith trademark applications. We will begin with the relevant stipulations in the Chinese Trademark Law of China (2019 Version), the required factors when applying the laws, the current trend in tackling bad faith trademark applications or registrations, and finally demonstrate how to tackle the bad faith trademark applications or registrations with our successful cases.

1. Tackling Bad Faith Trademark Applications or Registrations In China – Part I
2. Tackling Bad Faith Trademark Applications or Registrations In China – Part II

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Weekly China Trademark News Updates

July 27, 2021

1. Adidas successfully invalidated the “Yellow River Lotus” trademark with its prior copyrighted logo

In July 2021, the Beijing High Court made a final judgment on the administrative trademark invalidation of the “Yellow River Lotus” trademark, rejected the CNIPA’s appeal and affirmed the first instance judgment made by the Beijing IP Court.

The disputed trademark was filed by Fan County Huanghe Lotus Root Industry Farmers Professional Cooperative (referred to as the “Yellow River Lotus Root Cooperative”) for registration on June 3, 2009, approved on April 14, 2016, for goods “dry vegetables; cooking vegetable juice; pickle; pickled vegetables” and others. In November 2017, the original Trademark Review and Adjudication Board (“TRAB”) issued a ruling to maintain the disputed trademark. Adidas was dissatisfied and filed an administrative lawsuit with the Beijing IP Court. The Beijing IP Court found that the disputed trademark’s registration infringed upon Adidas’s prior copyrighted artwork and revoked the TRAB’s decision. Dissatisfied, the CNIPA appealed to the Beijing High Court.

Disputed Mark

Adidas’ Copyright Artwork

The Beijing High Court found that Adidas’ “shamrock” design is composed of three fusiform leaves and is divided by three horizontal black and white lines, which reflected the creator’s choice and combination and has a certain originality. Adidas’ “shamrock” design constituted as artwork under the Chinese Copyright Law. Adidas’ cited trademark’s application date was earlier than the disputed mark’s filing date. Meanwhile, combined with the copyright registration certificate, the creation of the “shamrock” design, and the assignment oath, etc., it can be determined that Adidas is an interested party of the artwork’s copyright involved in this case. The design part of the disputed mark was highly similar in design style and form of expression with Adidas’ copyrighted artwork, the composition of the two was substantially similar. Meanwhile, Adidas had already used the “shamrock” design on clothing, shoes, and other goods before the disputed mark’s application date. After extensive publicity and use in China, Adidas’ “shamrock” design has gained a high fame, and there was a possibility that the Yellow River Lotus Root Cooperative has knew of Adidas’ copyrighted artwork. Under such circumstance, the Yellow River Lotus Root Cooperative still filed a design that was substantially similar to Adidas’ copyright artwork as a trademark without reasonable explanations. Its subjective nature could hardly be regarded as good faith. Therefore, the disputed mark’s registration infringed upon Adidas’ prior copyrighted artwork.

2. Schneider China won a RMB 3 million judgement against malicious and repeated trademark infringement

On July 21, the Beijing Chaoyang District Court heard a trademark infringement case involving Schneider China and fully supported Schneider China’s economic losses claim of RMB 3 million (USD 462,600).

In January 2013, Schneider China filed a complaint against the defendant Hangzhou Dongheng Company’s predecessor Hangzhou Schneider Electric Co., Ltd. (“Dongheng”) for trademark infringing, and using the “Schneider” brand name in corporate names and publicity before the Hangzhou Xiacheng District Court. Through mediation by the court, Dongheng ceased its infringement, changed its company name, and compensated Schneider China for economic losses and reasonable expenses of RMB 100,000 (USD 15,419).

The Beijing Chaoyang District Court’s investigation revealed that after the mediation concluded, Dongheng had since continued to use the “Schneider” trademark extensively in many places on its official website. Meanwhile, in the “China Supplier Network” operated by a technology company in Beijing, Dongheng also had a product display page which used a large number of Chinese and foreign trademarks of “Schneider/Schneider in Chinese” in the company and products introduction. The said use continued until 2019.

The Beijing Chaoyang District Court found that Dongheng’s use of the “Schneider” and “Schneider/Schneider in Chinese” logos on its website and web pages constituted trademark infringement. Considering that Dongheng was a repeated infringer, its subjective malice was obvious, the infringement duration was long, and the fame of Schneider’s trademark, the court full supported its compensation claim of RMB 3 million (USD 462,600).

3. Summary analysis of administrative litigation of trademark review and adjudication cases in 2020

In 2020, the Trademark Office’s review and adjudication departments have ruled a total of 358,300 cases and received a total of 14,977 first instance response notices. The number of first instance responses received accounted for 4.18% of the total number of adjudications, which basically leveled with the previous year. A total of 5,933 second instance response notices were received, a slight increase from last year.

The overall review cases loss rate of the Trademark Office’s review and adjudication departments in 2020 was 24.62%, and the actual loss rate after excluding cases with change in circumstances is only 9.8%, which was a significant drop from the actual loss rate of 13.9% in the previous year.

Type of Cases	Total rulings	Total losses (due to change of circumstances)	Loss rate (excluding change of circumstances)
Rejection review	9,500	2,594 (2,147)	27.3% (4.7%)
Disapproval of Registration Review (including opposition review)	174	16 (6)	9.2% (5.7%)
Invalidation declaration	3,636	680 (26)	18.7% (18%)
Cancellation review	1,398	331	23.7%
Total	14,708	3,621	24.6% (9.8%)

 

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Weekly China Trademark News Updates

July 21, 2021

1. The Beijing High Court rejected a retrial petition filed by Beijing Wuyinliangpin against MUJI

On July 13, 2021, the Beijing High Court rejected a retrial petition filed by Beijing Miantian Textile Co., Ltd. (“Beijing Miantian”) against Muji (Shanghai) Commercial Co., Ltd. and Beijing Chaoyang Third Branch of Muji (Shanghai) Commercial Co., Ltd. (together as “MUJI”).

Beijing Miantian owns registered trademarks “Wuyinliangpin in Chinese” with registration numbers 1561046 and 7494239 in class 24 for “cotton textiles and towels.” These two trademarks were licensed to Beijing Wuyinliangping Investment Co., Ltd. for use in China. Ryohin Keikaku Co., Ltd. owns the following registered trademarks in China, the “MUJI” trademark with registration number 3545164 in class 24, the “Wuyinliangping in Chinese” mark in class 16 with registration number 4471270, in class 35 with registration number 4471277, and the “Wuyinliangping in Chinese and MUJI” mark in class 35 with registration number 1707559. Ryohin Keikaku Co., Ltd. licensed the said trademarks to MUJI for use in China. Beijing Miantian sued MUJI alleging that MUJI’s use of the “Wuyinliangpin in Chinese” mark on store signboard, header of the shopping receipt, and shopping bags infringed upon its registered trademarks “Wuyinliangpin in Chinese” with registration numbers 1561046 and 7494239 in class 24 for “cotton textiles and towels.”

The court found that MUJI’s use of the “Wuyinliangpin in Chinese” mark on its signboard shall be considered as use on selling general merchandise goods. The use of the “Wuyinliangpin in Chinese” logo on the header of the shopping receipt was the unified format of the shopping receipt provided by the store when selling goods, and did not specifically point to towels, quilts or other specific products. Such use still constituted as trademark use in providing general merchandise sales services. Except for the “Wuyinliangpin in Chinese and MUJI” logo on the outside, no other words were printed on the body of the disputed shopping bag. From the appearance, the disputed shopping bag cannot be seen to have a specific connection with the goods approved for use under the disputed trademarks in this case. Meanwhile, MUJI was authorized by its parent company, Ryohin Keikaku Co., Ltd., the right to use the “Wuyinliangpin in Chinese” trademark with registration number 4471270 in class 16 for packaging paper bags and other goods. The court found that MUJI’s use of the disputed trademarks on its store signboard, head of the shopping receipts, and shopping bags were trademark use in the process of sales services, which were not identical with or similar to the disputed marks’ approved goods and did not constitute as infringing on the disputed marks’ exclusive rights.

2. Huawei prevailed in the “Huawei Ark” trademark dispute

On July 5, the Beijing High Court rejected the second instance appeal between the CNIPA and Huawei and affirmed the first instance court’s decision.

Huawei Technologies Co., Ltd. (“Huawei”) applied for the “Huawei Ark” trademark with application number 37348881 on April 8, 2019 in class 38 for information transmission related services. The CNIPA cited “Huaxun Ark and design” with registration numbers 16987741, 21723380, and 22485505 and “Huaxun Ark” with registration number 31713645 in refusing the “Huawei Ark” from registration. Huawei appealed to the first instance court the Beijing IP Court.

Huawei Ark	Huaxun Ark

The Beijing IP Court found that the “Huawei” used in the “Huawei Ark” mark could be distinguished and would not cause confusion to the relevant consumer. The “Huawei Ark” mark and the cited marks did not constitute as similar marks use on identical or similar services. The Beijing IP Court ruled in favor of Huawei and ordered the CNIPA to reissue its refusal decision. The CNIPA appealed to the second instance court the Beijing High Court. The Beijing High Court found that although both the “Huawei Ark” and the “Huaxun Ark” contains the word “Ark,” however, ark usually means Noah’s ark, which was a non-distinctive coined word. The relevant consumer would primarily distinguish the two marks through the use of “Huawei” and “Huaxun” contained in the marks. “Huawei” and “Huaxun” had obvious differences in its calling, meaning, and composition, and they would not cause confusion to the relevant public as to the source of goods when used on identical or similar services, neither would the relevant public believe that they are serial mark from the same service provide, or otherwise associated. Therefore, the “Huawei Ark” did not constitute as similar mark with the cited marks on identical or similar services.

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Weekly China Trademark News Updates

July 13, 2021

1. “Tencent Weishi in Chinese” is ruled not similar to “Weishi in Chinese”

The Beijing High Court made a final judgment on an administrative trademark invalidation dispute in favor of Tencent Technology (Shenzhen) Co., Ltd. (“Tencent”), and against Beijing Gaojie Shengshi Technology Co., Ltd. (“Gaojie”) and the CNIPA.

The Beijing High Court found that: although the disputed mark “Tencent Weishi in Chinese” and the cited trademarks 1-6 “Weishi in Chinese, “Weishi in Chinese”, “Weishi Design”, ““,”,” and “” all contain “Weishi in Chinese”, however, the rather distinctive trademark “Tencent in Chinese” has been added in front of the disputed mark. Considering that the use of “Weishi in Chinese” in class 9 goods was not so distinctive, the disputed mark and the cited trademarks has certain differences in the overall enunciation and composition elements. Tencent submitted a consent letter issued by Gaojie, which clearly stated the detail information of the disputed mark and each of the cited trademarks, and the undertaking to agree unconditionally, permanently, and irrevocably the coexistence of the said trademarks, which was sufficient to prove that Gaojie has agreed to the disputed mark’s registration on all approved goods in class 9. If there was no other evidence to prove that the coexistence of the disputed mark and the cited trademarks will cause confusion among the relevant public regarding the source of the goods, the disputed mark can be maintained.

2. “Double Eleven in Chinese” and “618 Carnival” are all invalidated at last

The Beijing High Court made a final judgement on an administrative trademark invalidation dispute in favor of JD.com and against Alibaba and the CNIPA. The mark involved is the “Double Eleven in Chinese” trademark in class 35 for “sales for others,” which the court found that JD.com submitted sufficient evidence to prove that using the disputed mark on “advertisement and sales for others” services was likely to cause relevant public to believe that such a term was a sales description or slogan. Such use could not be distinguished as a trademark use because the disputed mark lacked distinctiveness. Accordingly, the disputed mark violated the provisions of Article 11, Paragraph 1, Item 2 and Item 3 of the 2001 Chinese Trademark Law.

Meanwhile, the Beijing High Court made a final judgement on an administrative trademark invalidation dispute against JD.com and the CNIPA. The mark involved is the “618 Carnival in Chinese” trademarks in class 35 for “advertisement and sales for others,” which the court found the trademarks to be deceptive because the combination of “618” and “carnival in Chinese” used on the approved services would mislead the relevant public on the content and quality of the services provided. Moreover, the court noted that none of the Chinese holidays is a “carnival.” The disputed mark “618 Carnival in Chinese” would be seen as promotional slogan when used on the approved services, which lacked distinctiveness as a trademark. The evidence submitted was insufficient to prove that the disputed mark has established a stable association with JD.com as a distinguishable trademark when used on the approved services. Accordingly, the disputed mark violated the provisions of Article 11, Paragraph 1, Item 3 of the 2001 Chinese Trademark Law. The first instance decision is affirmed.

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Weekly China Trademark News Updates

July 7, 2021

1. The CNIPA solicits comments from the public regarding the “Measures for the Coordinated Governance of Illegal Employment in the Patent and Trademark Agency Industry, Collusions between Examiners and Agencies, etc. (Draft for Solicitation of Comments)“

On July 5, 2021, the CNIPA published the Measures for the Coordinated Governance of Illegal Employment in the Patent and Trademark Agency Industry, Connections between Examiners and Agencies, etc. (Draft for Solicitation of Comments) (“Measures”) to solicit public comments. The Measures aim to maintain the market order of the patent and trademark agency industry, create a fair and just market competition environment, and severely crack down on illegal employment of patent and trademark agency industry and the collusion of examiners and agencies. The Measures list some behaviors that should be included in the blacklist of illegal behaviors of patent and trademark agency industry and restraint and management measures for the blacklisted personnel.

2. Santak was awarded a RMB 1 million punitive damages against the infringer

Santak Electronic (Shenzhen) Co., Ltd. (“Santak”) brought Hangzhou Lingguan Electronics Co., Ltd. (“Lingguan”) to the court for a trademark infringing lawsuit based on its exclusive right to use registered trademarks Nos. 512382 “,” 7892420 “,” and 512838 “.” The first instance court found that Lingguan’s use of words such as “CSTK” and “Santak” as its goods name, drawings, and packaging of its goods constituted as trademark infringement and ordered Lingguan to compensate Santak for its economic losses and reasonable expenses of RMB 150,000 (USD 23,200). Santak was unsatisfied with the judgment on the economic loss ordered and appealed to the second instance court. The second instance court found that Santak had requested the first instance court to multiply Lingguang’s profit as punitive damages, however, the first instance court erred by directly applying statutory damages against Lingguang, which was not in compliance with the Chinese Trademark Law. The second instance court found that based on the circumstances at hand punitive damages should be ordered against Lingguang, the second instance court then doubled Lingguang’s profit as the final punitive damages amount and in support of Santak’s economic losses claim of RMB 1 million (USD 154,662).

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Weekly China Trademark News Updates

June 30, 2021

1. “China Pacific Insurance Company in Chinese CPIC and Design” trademark was recognized as a well-known mark

The Beijing High Court redarned a second-instance judgment on an administrative dispute concerning trademark invalidation filed by the China Pacific Insurance Company (“CPIC”), and recognized that the “CPIC in Chinese CPIC and Design” trademark was well-known on “insurance” services, which successfully reversed the adverse invalidation decision and at the first instance court judgment.

The disputed trademark was filed by Ruiankang Technology Co., Ltd. (“Ruiankang”) on May 8, 2017, and approved for registration on September 7, 2018, for use on “hearing aid” in class 10. CPIC’s cited mark was registered on “insurance, insurance information” and other services in class 36.

During the invalidation proceeding, the CNIPA found that the evidence in the case was insufficient to prove that the cited mark is well-known to the relevant public, and there were obvious differences between hearing aid goods and insurance services. The disputed trademark’s validity was untouched. CPIC was unsatisfied and appealed to the Beijing IP Court. The Beijing IP Court found that although the disputed trademark constituted a copy or imitation of the cited mark, the disputed mark’s approved use on “hearing aid” and the famous “insurance” services of which the cited mark relied on were somewhat different. Thus, the two marks were not similar. Considering the low relevance between the two marks, the court found there is no need to evaluate whether the cited mark has achieved well-known status and rejected CPIC’s appeal.

CPIC appealed further to the Beijing High Court. The Beijing High Court found that the evidence in the case can prove that the cited mark achieved well-known status in the “insurance” service before the disputed mark’s application date. The disputed mark was identical with the cited mark, which constituted as a copy. Although according to the Classification of Similar Goods and Services the disputed mark approved for “hearing aids” was not similar with the cited mark approved for “insurance” service of which CPIC relied on for its well-known service, the consuming public of the two marks crossed and have certain association. The relevant public of the cited mark would be confused to believe that the disputed mark’s goods provider has certain association with the cited mark’s service provider. Even without considering the degree of association between the goods and services mentioned, the disputed mark’s application improperly exploited the goodwill of CPIC’s well-known mark, dissected the well-established association between CPIC and the “insurance” services approved for the cited mark, weakened the cited mark’s distinctiveness, and damaged CPIC’s interests. Accordingly, the disputed mark violated Article 13 Paragraph 3 of the Chinese Trademark Law.

There are two types of cross-class protection of well-known marks, including cross-class protection of well-known marks based on confusion of the relevant public, and cross-class protection of well-known marks based on dilution of the well-known mark’s distinctiveness without confusing the relevant public. For more information on well-known marks, please refer to our previous trademark series on our website.

2. Unauthorized use of New Balance’s “N” logo amounted to unfair competition

The Beijing IP Court affirmed the first instance court judgment regarding an unfair competition lawsuit between New Balance Trade (China) Co., Ltd. (“NB”) and Jiangxi Xinbailun Sports Goods Co., Ltd. (“Jiangxi Xinbailun”), Guangzhou Xinbailun Leading Footwear Co., Ltd., Guangzhou Xinbailun Enterprise Management Co., Ltd. (together as “Guangzhou Xinbailun”) and its executive director and general manager Lelun Zhou.

In the first instance judgment, the Beijing Dongcheng District People’s Court found that the NB lacked evidence to support its claims that the “New Balance in Chinese” was an influential trade name or was a special name for the “New Balance” sneakers products. However, the uppercase bold “N” letters in the upper side of the shoes constituted as unique decoration. Thus, the use of the “N” logo on its sneakers products by Jiangxi Xinbailun and Guangzhou Xinbailun amounted to unfair competition for using unique decoration without authorization.

Regarding the amount of compensation, the first instance court considered the fame of NB’s sneakers, uniqueness of decoration, subjective bad faith of Guangzhou Xinbailun and Jiangxi Xinbailun, the nature, method, duration, influence area involving the unfair competition behavior, related products sales prices and other factors, and ordered Guangzhou Xinbailun and Jiangxi Xinbailun compensate NB for economic loss of RMB 1 million (USD 154,700) and reasonable costs of RMB 100,000 (USD 15,470).

Guangzhou Xinbailun and Jiangxi Xinbailun were unsatisfied with the judgment, and NB was unsatisfied with the court’s findings of “New Balance in Chinese” and the compensation amount ordered. All parties appealed the first instance judgment to the second instance court, the Beijing IP Court. The Beijing IP Court affirmed the first instance court’s judgment.

3. Xiaohongshu (Red Book) applied for the mark “Old Red Book,” where will its trademark series end?

Following a series of trademark applications using other colors to replace the “red” in its house mark “Xiaohongshu (little red book)” in 2015, and ending with other Chinese characters having the same sound of “SHU” but totally different meanings such as comb, vegetable, pivot, millet, etc. in 2019, Xiaohongshu recently filed various trademarks in June 2021 such as “Laohongshu (old red book),” “Xiaohongwu (little red house),” “Xiaohongyou (little red friend),” “Xiaohongquan (little red circle)” to further its defensive filings.

Xiaohongshu’s filing strategy is obvious, however, would it be subject to the “bad faith trademark application without the intent to use” as stipulated under Article 4(1) of the Chinese Trademark Law 2019? According to the Second Chapter in the latter part of the revised Trademark Review and Adjudication Standards we reported last week, Article 4 is not applicable to applications filed for defensive purposes, applications damage only a particular entity’s civil rights, or applications for future business with realistic expectations. We will continue to pay attention to the progress and introduction of the revised Trademark Review and Adjudication Standards.

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