Weekly China Trademark News Updates

December 21, 2021

1. The CNIPA and Courts at Three Levels Held Symposium on Trademark Right Granting and Verification

Recently, the Trademark Office of the CNIPA held a symposium on certain matters relating to the granting and verification of trademark rights with the Supreme People’s Court, the Beijing Higher Court, the Beijing Intellectual Property Court, with the participation of the persons in charge of the Department of Treaty and Law of the CNIPA, the courts at three levels and the relevant departments at the Trademark Office. The participants at the symposium fully exchanged and discussed issues concerning the application of Article 10(1)vii of the Chinese Trademark Law on the differentiation of deceptiveness and distinctiveness, the application of the adverse effect clauses involving the name of a martyr in trademarks, the application of laws under change of circumstances in administrative litigation, the coexistence of trademarks, the trial of non-use cancellation cases, and workflow issues.

The data show that from January to November 2021, the Trademark Office received a significant year-on-year increase of 26,513 case docketing notices from courts at all three levels, and 16,398 judgments and rulings in the first, second and re-trial instances. However, as for the rate of losing cases, excluding the cases of losing cases due to the change of circumstances, the rate of losing cases in the first instance and the second instance of trademark review cases was 8.3% and 14%, which were obviously decreased from the previous year. These data with the increase or decrease thereof could reflect the further improvement of the administrative review and judicial connection mechanism.

In addition, the issue of trademark coexistence has recently become heated discussions in the industry. In rejection review cases, the CNIPA has basically failed to adopt the trademark coexistence agreement since September 2021, holding that the coexistence agreement cannot replace the examination of the possibility of confusion, and “the legislative purpose of the Chinese Trademark Law is to protect the interests of consumers in addition to protecting the interests of trademark right holders, and the waiver or assignment of trademark right holders’ rights does not necessarily protect consumers from confusion.”  We will also continue to focus on whether the symposium will have some impact on the CNIPA’s future attitude towards coexistence.

2. The Standards for Judging General Trademark Violations was recently issued by the CNIPA with a view to further tightening trademark administration

The CNIPA recently issued the Standards for Judging General Trademark Violations (“Standards”), which unify the standards for judging violations of the trademark administration order, with a view to strengthening trademark administration, unifying law enforcement standards, and improving law enforcement.

The Standards include 35 articles and detail nine types of violations against the administrative order of trademarks, including the failure to use of a registered trademark as prescribed by the existing Trademark Law, regulations and departmental rules, the use of a mark that shall not be used as a trademark, the use of the word “well-known trademark in Chinese” in commercial activities, the failure of a trademark licensee to indicate its name and the place of origin of goods, the change of a registered trademark, the name, and address of a registrant by itself, falsely using of an unregistered trademark as a registered trademark, failure to perform the obligation of managing collective trademark and managing certification trademark, filing bad faith trademark application. The Standards shall come into force on January 1, 2022.

3. Yet another trademark fights between Beijing Daoxiangcun and Suzhou Daoxiangcun

On December 3, the Beijing Higher Court made a second-instance judgment on the dispute over the invalidation of the “Daoxiangcun Cake Shop” trademark, and revoked the first-instance judgment of the Beijing Intellectual Property Court (“Beijing IP Court”) which revoked the invalidation ruling of the CNIPA.

Cited Mark of Beijing Daoxiangcun	Disputed Mark of Suzhou Daoxiangcun	Prior Mark of Suzhou Daoxiangcun

Suzhou Daoxiangcun Company (“Suzhou DXC”) applied the disputed trademark “Daoxiangcun Cake Shop” (“Disputed Mark”) on October 29, 2008 which was approved for registration on September 28, 2010 for use on biscuits, pastries, bread, and moon cakes in subclass 3006.

On January 26, 2017, Beijing Daoxiangcun Company (“Beijing DXC”) cited the trademark “Daoxiangcun” in subclass 3007 for goods of zongzi, sticky rice ball, pies, dumplings, and other goods, and filed an invalidation against the Disputed Mark.

The CNIPA originally found that Beijing DXC has been using its Cited Mark, which is presented in calligraphy font, extensively and for a long time. Suzhou DXC has been using its Prior Mark, which is comprised of “Daoxiangcun” in Chinese characters, DXC in English letters within a circled design, extensively and for a long time. The presentations, visual effects, and other aspects of the two marks were different. One party located in the north of China and the other south, both parties have co-existed in a long period of time, and have formed a stable market division and market order. Therefore, both parties’ new trademark applications for “Daoxiangcun” should not exceed its original presentations, and should follow its long-term used and relatively famous trademark presentation, or add additional elements to its original mark so that the relevant public can better distinguish the two marks.

The CNIPA further reasoned that the “Daoxiangcun Cake Shop” mark in this case was in pure print font, and the main distinctive part of the mark read as “Daoxiangcun” which was identical with Beijing DXC’s Cited Mark and the two mark should be deemed as similar marks. The Disputed Mark was approved to use on cookies, bread, pastry goods which were closely related to the Cited Mark’s approved goods for pies, rice balls in terms of function, use, sales channel, and target consumers. Both marks’ goods were similar. Allowing the Disputed Mark to be registered would break the existing market order, increase the likelihood of confusion in the market and among the relevant public. The Disputed Mark should be invalidated.

Suzohu DXC was not satisfied with the CNIPA’s decision and appealed to the Beijing IP Court. The Court determined that the goods used by the trademarks of the two parties belonged to different similar groups and did not constitute the same or similar goods. Regarding the issue on whether both parties can co-exist, the Beijing IP Court found that the Disputed Mark has been approved for registration and has been used extensively, which acquired different target consumers compared to the Cited Mark. Relevant public can subjectively distinguish the two marks. Beijing DXC and Suzhou DXC should use its approved trademarks on approved goods, and serve its target consumers. Neither party should be filing invalidation actions against another. Accordingly, both parties’ marks shall and can coexist because only such coexistence can better serve different target consumers. Accordingly, the Beijing IP Court held that the Disputed Mark shall not be invalidated.

Both the CNIPA and Beijing DXC were unsatisfied and appealed to the Beijing High Court. The Beijing High Court found that, the Disputed Mark’s approved goods and the Cited Mark’s approved goods were not in the same subclasses, but the manufacturing department, sales channel, and target consumers were closely related. Meanwhile, the distinctive part of the Disputed Mark was “Daoxiangcun” because “cake shop” lacked distinctiveness when used on the approved goods. Both the Disputed Mark and the Cited Mark included “Daoxiangcun,” which shared similar composition, pronunciation, and overall appearances and constituted as similar marks. The coexistence of the Disputed Mark and the Cited Mark on its approved goods would cause confusion and misidentification to the source of goods when relevant public exerts average level of attention. Considering that Suzhou DXC did not provide evidence of use of the Disputed Mark, and that there were large differences between the Disputed Mark and the Prior Mark Suzhou DXC has been using, the court held that the Disputed Mark cannot be distinguished from the Cited Mark without use and cannot coexist with the Cited Mark based on Suzhou DXC’s Prior Mark. Additionally, both parties have its historical developments and use of its respective trademarks, so they should respect the existing market order and divide clearly its use of trademark. Accordingly, the Disputed Mark constituted a similar mark on similar goods with the Cited Mark. The Beijing High Court affirmed the CNIPA”s decision.

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