Quarterly China Trademark News Updates

July – September 2021

1. Notable trademark and anti-unfair competition cases

a. 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” in class 24 for “cotton textiles and towels.” These trademarks were licensed to Beijing Wuyinliangping Investment Co., Ltd. for use in China. Ryohin Keikaku Co., Ltd. owns the “MUJI” registered trademark in class 24, the “Wuyinliangping in Chinese” registered marks in class 16 and class 35, and the “Wuyinliangping in Chinese and MUJI” registered mark in class 35. 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” 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 Beijing Miantian’s 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 in class 16 for packaging paper bags and other goods. The court found that MUJI’s uses 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 approved goods under Beijing Miantian’s trademarks and did not constitute as trademark infringement.

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

On July 21, 2021, 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 infringement, 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 was concluded, Dongheng had since continued to use the “Schneider” trademark extensively throughout 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 introductions. 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 fully supported its compensation claim of RMB 3 million (USD 462,600).

c. Ralph Lauren was found not infringing in a second instance decision

Guangzhou Aichi Leather Co., Ltd. (“Aichi”), the owner of the “POLO” mark in class 18 “wallets, school bags, small wallets, handbags, travel bags (cases), etc.,” sued Ralph Lauren to the Beijing Chaoyang District Court, requesting an order to stop the infringement and compensate for economic losses and other legal expenses.

The Beijing Chaoyang District Court 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 Beijing Chaoyang District Court 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 its trademark had obtained certain influence through use. Therefore, when consumers entered Ralph Lauren stores to purchase related goods, they would 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. 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 trademark rights as the legal rights holder, Ralph Lauren’s use of the alleged infringing mark will not cause market confusion. The Beijing Chaoyang District Court erred in its findings and should be amended.

d. 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 (“Disputed Mark”) based on its prior trademark in Class 14 and International trademark in Class 42.

Disputed Mark	Bulgari Prior Mark in Cl. 14	Bulgari Prior Mark in Cl. 42

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 Bulgari’s prior mark in Class 14 had obtained a great reputation and influence on “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 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.

e. 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 China National Intellectual Property Administration (“CNIPA”) because 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 used on “shoelaces” and related goods in Class 26, it 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).

f. Universal Pictures was awarded RMB 5.1 million in compensation in a “Minions” copyright dispute

Recently, the Jiangsu High Court rendered a favorable decision for Universal Pictures against defendants Cangzhou Qianchixue Food Co., Ltd. (“Qianchixue”), Jingbaojiang, Jingshusong, Wangzi Beverage (Guangzhou) Group Co., Ltd. (“Wangzi”), Guangdong Tainiu Vitamin Beverage Co., Ltd. (“Tainiu”), Wuxi Weiwei in a copyright dispute involving the “Minions” copyright. The court affirmed the first instance court’s decision and ordered the defendants, except Wuxi Weiwei, to pay RMB 5 million (USD 788,400) altogether and ordered Wuxi Weiwei to separately pay RMB 100,000 (USD 15,458) in compensation to Universal Pictures.

Universal Pictures is a world-renowned film and television studio. After being released in China, the Minions film series gained enormous reputation. Without the authorization of Universal Pictures, Qianchixue mass-produced and sold dairy beverages with a graphic that was substantially similar to the “Minions.” Before the alleged infringing products were put on the market, other beverage companies had obtained authorization to use the “Minions” image from Universal Pictures. Qianchixue’s infringing products affected the sales of licensed products by other legal licensees. The court ruled that although the alleged infringing image used by the alleged infringing product was slightly different from the artwork involved, it included many main original features of the “Minions,” which constituted as substantially similar.  Without the permission of Universal Pictures, Qianchixue used the involved artwork on the alleged infringing products, manufactured, sold, publicized and promoted the alleged infringing products, infringing the reproduction and distribution right of the involved artwork. The defendants Jingbaojiang and Jingshusong facilitated Qianchixue’s alleged infringing activities, which constituted as joint infringement. The defendants, Tainiu and Wangzi, as the trademark owners and licensees of the alleged infringing products involved in the case, had a close interest and cooperation relationship with Qianchixue, which constituted joint infringement. Wuxi Weineng sold the alleged infringing products online, which constituted as infringement, and was ordered to separately compensate Universal Pictures for RMB 100,000 (USD 15,458).

g. “NEW BALANCE” ousted “New bunren”

On August 13, 2021, the Beijing High Court affirmed the first instance court decision in favor of the CNIPA over a trademark invalidation dispute.

Disputed Mark	Cited Mark

The Disputed Mark was approved for registration on January 7, 2011, and New Balance filed an invalidation petition on June 28, 2018, after the five-year statute of limitation on filing an invalidation petition against a registered trademark. The CNIPA, however, found that the Disputed Mark constituted as maliciously imitating other’s well-known registered trademark under Article 13(3) of the Chinese Trademark Law, and concluded that New Balance’s invalidation petition was not limited by the five-year statute of limitation.

The Beijing High Court affirmed the first instance court decision finding that New Balance had submitted sufficient evidence proving that the Cited Mark was widely known and enjoyed high fame among the relevant public on “shoes” related goods and constituted as a well-known mark.

Article 13(3) of the Chinese Trademark Law protects well-known trademarks in China and is applicable to registered trademarks. The legislative intention of Article 13(3) is to provide stronger protection to well-known trademark than general registered trademarks. If identical or similar trademarks are registered or used on identical or similar goods approved for the well-known trademark, the consequential damage on the well-known trademark is obviously higher than those trademarks registered or used on different or dissimilar goods. Therefore, applying for trademark registration by copying, imitating, and translating other’s registered well-known trademark on “identical or similar goods” shall be regulated by Article 13(3).

In this case, both the Disputed Mark and the Cited Mark contained “NEW,” while the pronunciation of “BALANCE” and “bunren” was similar, thus, the Disputed Mark and the Cited Mark were similar in terms of word compositions, pronunciations, overall appearances, and visual effects. The Disputed Mark constituted as an imitation of the Cited Mark. The goods approved for the Disputed Mark were identical or similar to the shoes related goods approved under the Cited Mark in terms of function, use, production department, sales channels, consumers, etc., which constituted as identical or similar to the Cited Mark’s approved goods. Where the Cited Mark has constituted a well-known trademark and the Disputed Mark is an imitation of the Cited Mark, when purchasing goods approved for use by the Disputed Mark, the relevant public would easily believed that such goods had certain association with the Cited Mark, which would weaken the Cited Mark’s distinctiveness and damage New Balance’s interests obtained through its well-known Cited Mark. The Court concluded that the Disputed Mark violated Article 13(3) and shall be invalidated.

h. The mark “MOPIDICK in Traditional Chinese” was maintained on cosmetic goods

IKEDA MOHANDO CO., LTD. (“IKEDA”) registered the MOPIDICK in Traditional Chinese mark (“Disputed Trademark”) on August 28, 2014, in Class 3 for “cosmetics, soaps, fragranced soaps, fragrances, cosmetic nails, cosmetic eyelashes, perfume, toothpaste.”

A individual filed a non-use cancellation and later a cancellation appeal against the Disputed Trademark. The CNIPA concluded that the evidence submitted by IKEDA showed that the Disputed Trademark was used on anti-mosquito and anti-itch liquid products, which were closely related to cosmetic products in function, sales location, consumer, etc., and the trademark shall be maintained on cosmetic goods. However, the evidence did not show that the Disputed Trademark was used for soaps, fragranced soaps, fragrances, cosmetic nails, cosmetic eyelashes, perfume and toothpaste, and the mark’s registration on these goods shall be cancelled accordingly.

IKEDA appealed to the Beijing Intellectual Property Court and the court found that the online sales and publicity evidence submitted by IKEDA could prove that it had actually used the Disputed Trademark on the “anti-mosquito and anti-itch liquid” products within the specified period. In view of the strong correlation between the “anti-mosquito and anti-itch liquid” products and the “cosmetics” goods approved for the Disputed Trademark in terms of function, use, sales location, and consumers, the Disputed Trademark shall be maintained on the “cosmetics” goods. According to the Classification of Similar Goods and Services, “fragrance, cosmetic nails, cosmetic eyelashes, soap, fragranced soap” and “cosmetics” goods belong to the same subclass, and the Disputed Trademark shall be maintained on these goods as well. In addition, the Disputed Trademark’s approved goods of “toothpaste, perfume” and “cosmetics, soaps, fragrance” were all daily washing and chemical goods, and they were highly similar in terms of function and use, production department, sales channel and consumers. According to Article 2 of the Regulations on Hygiene Supervision of Cosmetics and relevant regulations, cosmetics refer to daily chemical industrial products that are spread on skin, hair, nails, lips and other parts of the human body by wiping, spraying or other similar methods to achieve the purposes of cleaning, eliminating bad smell, skin care, beauty and decoration. Therefore, the Disputed Trademark’s approved use of “toothpaste and fragrance” products should also be covered by cosmetics in terms of function and use. Therefore, “toothpaste and fragrance” and “cosmetics” should be deemed as similar goods, and the Disputed Trademark’s approved use for “toothpaste and fragrance” shall be maintained.

The CNIPA appealed the first instance decision to the Beijing High Court. The Beijing High Court recently affirmed the first instance court decision that the disputed trademark “MOPIDICK in Traditional Chinese” shall be maintained for its registration on cosmetics, toothpastes, fragrances, and other designated goods.

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.

i. The Beijing High Court: Trademark co-existence agreement does not automatically equal to grant of trademark protection

Volkswagen applied the “TAYRON” mark which was blocked by the prior registered trademark “TYRON.” Volkswagen submitted a trademark co-existence agreement issued by the owner of the prior trademark, however, the Beijing High Court found that the disputed mark “TAYRON” was almost identical to the prior trademark “TYRON,” thus, even if the co-existence agreement is legal, authentic, and effective, it would not be enough to eliminate the possibility to confuse or to mislead the relevant public regarding source of the goods. Therefore, the trademark co-existence agreement could not be the basis for the registration of the disputed mark “TAYRON” and the court rejected Volkswagen’s appeal.

2. Notable trademark laws, regulations, and news updates

a. 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.

b. 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 Standards (Draft for Comment) (“Standards”),” which the CNIPA publicly solicited opinions until October 1, 2021.

The Standards 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.

c. From September 1, 2021, intentional IP infringements, filing irregular patent applications, bad faith trademark applications, and serious violation of patent and trademark agency will be included in the serious violations of law and dishonest list

The Administrative Measures for Lists of Parties with Seriously Unlawful and Dishonest Acts for Market Regulation Authorities (“Administrative Measures”), passed on July 22, 2021, came into force on September 1, 2021.

Article 2 of the Administrative Measures states where a party violates laws and administrative regulations, who’s conduct has a bad nature, under serious circumstances, imposes great social harm and is subject to heavy administrative punishment by the market regulation authorities, the relevant market regulation authorities shall list violators in the Lists of Parties with Seriously Unlawful and Dishonest Acts in accordance with the provisions of the Administrative Measures, publish it through the national enterprise credit information publicity system, and implement corresponding management measures.

Article 9 of the Administrative Measures states those who commit the following illegal acts that undermine the order of fair competition, disrupt the market order and fall under the circumstances specified in Article 2 of the Administrative Measures shall be included in the Lists of Parties with Seriously Unlawful and Dishonest Acts:

• Unfair competition actions that seriously undermine the order of fair competition, such as infringing trade secrets, business slander, organizing false transactions, etc.;
• Intentional infringement of intellectual property rights; submitting irregular patent applications and bad faith trademark applications that damages the social and public interests; and engage in serious violation of patent and trademark agency.

d. China’s trademark registration cycle will be further reduced

On August 26, 2021, the CNIPA specially held a mobilization and deployment meeting to shorten the trademark registration cycle. The CNIPA pointed out that the State Council had decided that the general trademark registration cycle will be reduced to 7 months. It is one of the important measures to deepen the reform of the “delegation of administration and decentralization” (simplification of administration and decentralization, combination of delegation and regulation, and optimization of services) in the field of intellectual property rights. The CNIPA’s most important task of the year.

The CNIPA issued a notice on September 14, 2021, in accordance with the “Working Plan for Reduction of the Trademark Registration Cycle in General Situations,” stating that from September 29, 2021, the deadline for payment shall be adjusted from within 15 days from the date of receipt of the payment notice to within 7 days. If the payment is not made within the time limit, the CNIPA will not accept the application.

It can be seen from the above that the CNIPA has shortened the trademark registration cycle in an all-round and multi-stage manner, not only speeding up the formal and substantive examination, but also furthering the process in terms of processing. According to our recent experience, if it all goes well, it will take about 3 to 4 months from submission of an application to preliminary approval; and if excluding the office action for the non-standard goods and services and the payment duration, it will take as short as about one month from the issuance of official filing receipt to preliminary approval.

3. Trademark Practices Series – Bad Faith Application in China and Protection of Chinese Equivalents of Foreign Trademarks

Previously, we shared our insights on the application of bad faith clause with exemplary cases. This time, we are going to share cases to show how we identify the bad faith and how we present the evidence to convince the CNIPA and the courts to achieve favorable outcomes. In the last part of this series, Part IV, we will share cases and our suggestions on two issues, one is the impact on bad faith assessment in the event of later trademark assignment, the other is the necessity to assess bad faith if the right holder’s interests have already been protected by applying other clauses of the Trademark Law.

1. Tackling Bad Faith Trademark Applications or Registrations In China – Part III
2. Tackling Bad Faith Trademark Applications or Registrations In China – Part IV

When an oversea brand enters Chinese market, selecting a Chinese equivalent of the oversea brand is crucial because native Chinese pronounce and remember the Chinese language much easier than any foreign language. This is precisely why nearly all famous international brands have and use its Chinese equivalent names in China. Our article aims to shed light on how foreign brand owners can protect their Chinese equivalent trademarks.

1. Protection of Chinese Equivalents of Foreign Trademarks

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