Weekly China Trademark News Updates

August 1, 2023

1. Fair use of a mark to illustrate product functionality does not constitute trademark infringement

The Shanghai IP Court made a final judgment on the trademark infringement dispute between Supai Technology (Shanghai) Co., Ltd. (“Supai”) and Shenzhen Jianzi Technology Co., Ltd. (“Jianzi”). The court held that Jianzi’s use of the alleged infringing logo on its package constituted as descriptive fair use of its products and did not constitute as trademark infringement of the cited “Quan Bo Duan in Chinese” mark.

Supai is the exclusive licensee of the “Quan Bo Duan in Chinese” mark who has the exclusive power to initiate a civil lawsuit against an alleged infringer. Supai sued Jianzi for using “Quan Bo Duan Sunscreen in Chinese” without authorization and demanded compensation.

The court found that first, “Quan Bo Duan Sunscreen in Chinese” has a descriptive meaning. According to the evidence provided by Jianzi, wave band is a professional term in physics. Many sunscreen product manufacturers, consumers, relevant marketers, researchers, etc. have widely used “Quan Bo Duan Sunscreen in Chinese” as a vocabulary to describe the function of its sunscreen products. Judging from Supai’s own way of using the cited mark, it also mostly uses “Quan Bo Duan Sunscreen in Chinese” and does not indicate the circle R symbol next to “Quan Bo Duan in Chinese.” It can be seen that Jianzi also used “Quan Bo Duan Sunscreen in Chinese” as a term to describe the function of sun protection clothing.

Second, the accused act was a descriptive use of “Quan Bo Duan Sunscreen in Chinese.” The words used below “Quan Bo Duan Sunscreen in Chinese” was a further explanation and description of its sunscreen function that fully described the sunscreen function of the allegedly infringing products. Meanwhile, considering that Jianzi listed its registered trademarks on the packaging, such use was sufficient to notify that Jianzi’s use of “Quan Bo Duan Sunscreen in Chinese” was to describe the sunscreen function of the allegedly infringing products and not to identify the source of goods.

Third, the accused use was within a reasonable range. The use of “Quan Bo Duan Sunscreen in Chinese” by Jianzi did not exceed the necessary need for describing and explaining the functions of its products, and it will not cause confusion or misidentification to the relevant public.

Finally, the alleged use was done in good faith. Jianzi’s use of “Quan Bo Duan Sunscreen in Chinese” subjectively to show the sun protection function of the product, not to take advantage of the goodwill of Supai’s cited mark.

2. Due to the lack of stable and continuous use, store decoration is not protected by the Anti-Unfair Competition Law

The Beijing IP Court recently concluded a trademark infringement and unfair competition dispute between Tianjin Qihuo and His Friends Catering Management Co., Ltd. (“Qihuo”) and Beijing Wai Wu Di Catering Co., Ltd. (“Wai Wu Di”). The court denied the appeal and affirmed the lower court’s decision.

Qihuo claimed that Wai Wu Di used Qihuo’s influential decorations in the accused offline store without permission, which would easily confuse the relevant public about the source of its services or mistakenly believe that Wai Wu Di provided the services, or there is a specific connection between them, which constituted unfair competition.

The court found that the store decoration claimed by Qihuo was an overall image composed of wall decoration paintings, slogans, trademarks, door curtains, menu styles, tables and chair shapes, and color combinations. It claimed that due to the various sizes of its stores, the decorative elements used varied. This court found that when determining whether the store decoration has been continuously and stably used and publicized by Qihuo to form a stable relationship with it, it should not be compared separately to determine whether the elements are identical or similar. The decisive element is whether the decoration as a whole has a unique style to form an overall business image. According to the evidence, although Qihuo claimed that the elements of its various stores were selected from a specific elements library, and similar elements also overlapped in some of its stores, they were not sufficient to prove that the decoration has been promoted through its use and acquired distinctiveness, which formed a stable and unified overall image that allow consumers to associate such decoration with Qihuo. Moreover, Qihuo’s evidence was insufficient to prove that the relevant public can associate such decoration with it, and obtained certain market reputation. Thus, the first instance did not err in finding that Wai Wu Di’s use of Qihuo’s decoration did not constitute unfair competition.

3. The CNIPA severely cracks down on bad faith trademark registration and hoarding

The CNIPA’s recent press conference regarding the first half of 2023 shows that it has cracked down on a total of 249,000 bad faith trademark registrations, of which 192,000 were refused during filings and oppositions. The trademark rights of 56,000 cases were not confirmed in the right confirmation proceeding, such as the invalidation declaration. At the same time, in the above-mentioned cases, some applicants voluntarily withdrew filings and cancelled trademark registrations in a total of 204,000 cases.

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