Weekly China Trademark News Updates

April 20, 2022

1. CNIPA continues its “zero tolerance” attitude towards cracking down on bad faith trademark registrations

The CNIPA recently issued a notice on Continued Crackdown on Bad Faith Trademark Registrations.

The notice states that the special campaign against bad faith squatting and hoarding of trademarks has achieved remarkable results. In order to further implement relevant deployments, the CNIPA shall strengthen the focus of rectification and crack down on typical behaviors; strengthen monitoring and early warning to achieve accurate identification; strengthen systematic governance and implement severe punishments; strengthen supervision on agencies and maintain industry order; strengthen credit supervision and implement joint punishment; strengthen coordination and cooperation to form a joint governance force; strengthen institutional guarantees and improve policy supply; strengthen positive guidance and create a good atmosphere.

The notice specifically mentions that it is necessary to improve the key monitoring list of squatters through the entire trademark registration process. If market entities in the key monitoring list engage in trademark matters, the CNIPA will strictly review such entities and strongly require its burden of proof for actual use of trademarks. It is also possible to, ex officio or based on application, strengthen the examination on the consistency between the industry in which the applicant’s business is resided and the goods and services designated for use by the trademark.

In addition, it is necessary to continue to restrict the assignments of hoarded trademarks, strengthen the pre-examination of the use of the trademarks to be assigned, and make bad faith trademark registration unprofitable.

The notice also mentions that it is necessary to guide social forces to widely participate in the management of trademark registration orders and promote the deployment of “public welfare non-use cancellation” in order to release idle trademark resources.

2. Several courts have released typical cases of judicial protection of intellectual property rights

With the World Intellectual Property Day around the corner, specialized intellectual property courts, tribunals and multiple local courts have released their own white papers and typical cases on judicial protection of intellectual property.

On April 18, the Suzhou Intellectual Property Tribunal held an online press conference and released the top 10 highlights of the court’s fifth anniversary and top 10 typical cases of judicial protection of intellectual property rights in 2017-2021, including New Balance v. Shenzhen Xin Ping Heng Sports Goods Co., Ltd., Zheng, etc. for trademark infringement and unfair competition disputes.

New Balance China was authorized the non-exclusive right to use the “NEW BALANCE” trademarks in China and used the decoration design of the English letter “N” on both sides of its footwear products. Zheng established an overseas company and authorized Shenzhen Xin Ping Heng to mass-produce sports shoes with the “” logo decorated with “N” letters on both sides of its shoes and promote sales online and offline. The official website of Shenzhen Xin Ping Heng falsely published a large number of articles that used the honor of New Balance sneakers. New Balance China filed a lawsuit. During the lawsuit, the court made an injunction, but several defendants refused to carry out the effective injunction ruling. What’s more, when the court served the effective ruling, they threw away the legal documents in public. The court then decided to impose fines against the defendants between RMB100,000 (USD15,585) to RMB1 million (USD155,859). After trial, the court held that Shenzhen Xin Ping Heng and other defendants were liable for trademark and unfair competition, and fully supported New Balance China’s compensation claim of RMB10 million (USD1.56 million).

This case was selected as one of the top 10 intellectual property cases in Chinese courts in 2018. It is the first case in Jiangsu Province involving the issuance of an injunction on the unique decoration of a well-known goods. It was also the first injunction during a litigation that covered the entire chain from the prohibition of production and sales to false publicity. Later, judicial fines were imposed on the defendants for refusing to perform the injunction. This case also analyzed the right holder’s losses in detail and applied punitive damage by supporting New Balance China’s compensation claim of RMB10 million (USD1.56 million).

On April 19, the Shanghai Intellectual Property Court and the Shanghai Third Intermediate Court released the highlights of strengthening judicial protection of intellectual property rights (2019-2021), especially introducing the refined calculation method of infringement damages and clarifying the calculation of damages. The factors to be considered include: sales volume of infringing products, profit margin, scale of infringement, degree of fault, decline in the market share of the right holder, loss of value and other factors in order to effectively deter and curb intellectual property infringements.

 In addition, the Inner Mongolia Autonomous Region, the Sichuan High Court, and the Chongqing High Court also held press conferences and released their top 10 typical cases of intellectual property protection in 2021.

3. The invalidation against TWG’s trademark was affirmed

The Beijing High Court recently made a second-instance judgment on the invalidation case of Reg. No. 9011685 “MELANGES EXQUIS MILLESIMESD’EXCEPTION TWG TEA GRANDS CRUS PRESTICE 1837 and Design” (“Disputed Mark”) owned by

TWG TEA COMPANY PTE LTD (“TWG Tea Company”), finding that the registration of the Disputed Mark violated Article 10(i)(7) of the 2001 Trademark Law and shall be declared invalid.

Disputed Mark

TWG Tea Company applied the Disputed Mark on December 31, 2010, and obtained registration on August 21, 2013 for use on cups, cans, drinking utensils, tea sets and other goods in Class 21.

Jierong International Co., Ltd. filed an invalidation against the Disputed Mark in October 2017, and the former Trademark Review and Adjudication Board (“TRAB”) invalidated the Disputed Mark in September 2018, finding that: the overall use of the Disputed Mark on the approved goods was deceptive and easy to cause adverse social influence. It violated Article 10(i)(7) and 10(i)(8) of the 2001 Trademark Law.

TWG Tea Company appealed to the Beijing Intellectual Property Court. The Beijing Intellectual Property Court affirmed that the Disputed Mark violated Article 10(i)(7) of the 2001 Trademark Law, that is, exaggerated publicity and deceptive signs should not be used as a trademark. The Disputed Mark, however, did not have negative connotations, and was not related to political, religion, nationality, morality and other meanings, which could not be seen as to have “other adverse effects.” It did not violate Article 10(i)(8) of the 2001 Trademark Law. The TRAB’s decision erred in this regard but the overall conclusion was correct.

TWG Tea Company further appealed to the Beijing High Court. The Beijing High Court, in its final decision, found that the Disputed Mark consists of the number “1837”, the letters “TWG”, English word “TEA”, French words “MELANGESEXQUIS”, “MILLESIMESD’EXCEPTION”, “GRANDSCRUSPRESTIGE” and designs. Among them, the Chinese translations corresponding to the French words were all words with clear meaning, and conveyed the message of good quality, long history, and good reputation. At the same time, “1837” was easy to be understood as a year, and it was easy to make the public think of the history of the supplier of the goods, the year of manufacture of the goods and other information. Plus the use of  “MILLESIMES D” and “EXCEPTION” made it easier for the public to recognize that the product provider or brand originated in 1837, so as to have a good association with the quality, history, and reputation of the provided products, thereby affecting the public’s consumption choices and judgment. TWG Tea Company’s publicity was also difficult to eliminate the public’s misunderstanding that “1837” refers to the commodity provider or brand history. Therefore, the court affirmed that the registration of the Disputed Mark violated Article 10(i)(7) of the 2001 Trademark Law.

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