Weekly China Brand Protection News

October 24, 2024

1. “Xiaomi” was recognized as a well-known mark and given cross-class protection on beverage related goods

Recently, the Chongqing High Court made a final ruling in the trademark infringement and unfair competition lawsuit between Xiaomi Technology Co., Ltd. and Beijing Qingquan Chushan Beverage Co., Ltd., Tianjin Qiulin Gewasi Food Technology Co., Ltd., among other defendants. The court recognized that Xiaomi’s “Xiaomi in Chinese” mark with reg. no. 8228211 and “MI” mark with reg. no. 8911270 had gained significant recognition among the relevant public in China before August 2018, qualifying them as well-known trademarks. The court also found that the defendants had infringed on Xiaomi’s trademarks and engaged in unfair competition, ordering them to pay Xiaomi CNY 5 million (USD 701,000) in damages.

Cited Marks

First, the court found that the evidence submitted by Xiaomi, along with prior rulings, demonstrated that the “Xiaomi in Chinese” trademark, registered in April 2011, had been continuously used. Xiaomi and its affiliates invested substantial funds in promoting the Xiaomi brand, earning numerous honors and gaining various forms of legal protection, including being recognized as a well-known trademark by several courts, such as the Beijing IP Court and the Jiangsu High Court. Therefore, the court ruled that the trademark had become widely known among the public in China by August 2018, recognized it as a well-known trademark.

Second, the defendants used the “Xiaomi Cola in Chinese” and “Micola” trademarks on beverage products. (1) On the allegedly infringing product, “Xiaomi Cola in Chinese” took up a large portion of the bottle’s surface, while the words “Qingquan Chushan in Chinese” were small and hidden in the background. From a typical consumer’s viewpoint, the “Xiaomi Cola in Chinese” label would be noticed first, making it difficult to identify the “Qingquan Chushan in Chinese” name. Given that the Xiaomi in Chinese trademark is highly distinctive and well-known, the public closely associates Xiaomi with its electronics products. The defendant’s acts could mislead consumers into thinking there is an association between Xiaomi and the defendants, thus weakening the link between Xiaomi’s trademark and its products, such as phones. This constitutes an infringement of Xiaomi’s well-known trademark rights. (2) The defendants also registered the “Micola” trademark, composed of “Mi” and “cola.” However, this mark had been declared invalid in administrative proceedings. The term “cola” is a generic name for the product, lacking distinctiveness, leaving “Mi” as the significant part of the mark. This closely mimics Xiaomi’s registered “MI” trademark. The defendants also used a similar color scheme to Xiaomi’s in their branding. This use was seen as exploiting the reputation of Xiaomi’s well-known “MI” trademark, misleading the public and harming Xiaomi’s interests, thus constituting trademark infringement.

Last, the defendants used promotional phrases like “Xiaomi phones are born for enthusiasts, today, Xiaomi Cola is born for fermentation” on product packaging, official Weibo, and WeChat accounts, as well as mimicked Xiaomi’s orange and white color scheme in their marketing. Their full-scale imitation created a blurred association between their products and Xiaomi’s, misleading consumers and violating the principle of good faith. This constitutes unfair competition through misleading commercial advertising.

2. The China Supreme Court reversed the ruling in a retrial! Despite applying for a large number of trademarks, evidence proves the disputed trademark has been continuously and extensively used on Class 34 products

Recently, the China Supreme Court (“SPC”) issued a retrial judgment in the administrative dispute regarding the invalidation of the “Zhaocai Cat in Chinese” mark. The court ruled that the trademark owned by Shaanxi Zhongyan Industrial Co., Ltd. (“Shaanxi Zhongyan”) did not constitute the “acquisition of registration through other improper means” specified in Article 44, Paragraph 1 of the Trademark Law, and upheld its registration.

The main issue in the case was whether the registration of the disputed mark violated Article 44, Paragraph 1 of the Trademark Law. The second instance court held that around the time of the trademark application, Shaanxi Zhongyan had applied for more than 300 trademarks across multiple classes of goods and services, including “Zhaocai Jinbao” and “Fu Zhaocai Jinbao.” The number of trademarks applied for significantly exceeded the company’s normal production and operational needs, and Shaanxi Zhongyan did not provide a reasonable explanation for registering the disputed mark or other trademarks. Therefore, the court found that these acts disturbed the normal trademark registration order, harmed fair competition in the market, violated public order and good customs, and damaged public interest.

 The SPC’s retrial judgment concluded that when a trademark applicant applies for a large number of trademarks, it is inappropriate to determine that the applicant obtained registration through improper means based solely on the quantity. Instead, the actual production and business situation should be considered to assess whether the trademarks were applied for with the intent of genuine use and whether the application was reasonable and legitimate. In this case, between 2015 and November 2021, Shaanxi Zhongyan applied for 155 trademarks, mainly for use on Class 34 tobacco products and related promotional items or services. Shaanxi Zhongyan provided evidence proving that these trademarks had been put into commercial use, and their registration met the company’s actual production and operational needs, showing reasonableness and legitimacy. In addition to the disputed mark, Shaanxi Zhongyan also registered the “Zhaocai Cat in Chinese” graphic and word trademarks in Classes 9, 11, and 16, which were used for tobacco products and related items or services. The evidence presented was sufficient to demonstrate that the large number of trademarks, including the disputed one, did not exceed the company’s actual operational needs and had been used extensively on approved goods over time. Therefore, the registration of the disputed trademark did not violate Article 44, Paragraph 1 of the 2013 Trademark Law.

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