Weekly China Trademark News Updates

December 29, 2021

2021 turned out to be year one for all of us learning how to live with COVID-19. Across the world, various strategies have been implemented to adapt the new normal such as continuing wearing mask in crowded areas, keeping social distance, getting at least two doses of vaccine, and occasionally countries around the world would still implement partial or full lock down in order to contain the virus from spreading into the community. That said, social activities around the world have picked up where they left in 2019. 2020 Summer Olympics resumed in Japan, Tom Brady won another ring at Super Bowl LV, Tennis Grand Slams were held as scheduled around the world, Villarreal CF won the 2020 UEFA Euro. Many intellectual property related conferences were also resumed around the world. Beijing East IP attended INTA via its online platform and joined many table topics with our colleagues around the world. Although it was not the same as seeing them in person, definitely better than exchanging emails.

At Beijing East IP, we had to adapt new communication channels and our weekly China trademark news updates was one of the new channels. Our first update was published on January 15, 2021, and the one today will mark the end of the first full year of providing weekly China trademark news updates to our subscribers. We hope the contents have been interesting and informative to you and we will continue to provide this weekly updates into 2022. There may be new ideas from us to you in 2022, so stayed tuned and we will let our subscribers know as soon as the new materials are prepared. Stay tuned and wish everyone a Happy New Year of the Tiger!

1. Schneider Electric was awarded RMB 1 million in compensation in an unfair competition lawsuit

Schneider Electric (China) Co., Ltd. (“Schneider China”) sued Hangzhou Dongheng Electric Co., Ltd. (“Dongheng”) for using the domain name “www.schneider-china.com” and the corporate name of “Hangzhou Schneider Electric Co., Ltd.” in an unfair competition lawsuit.

The Second Instance Court found that Schneider China has invested in and established a number of companies with the name “Schneider in Chinese” since its establishment in 1995 in China and has won many awards. After continuous and extensive publicity, Schneider China’s “Schneider in Chinese,” “Schneider Electric in Chinese,” ” Schneider Electric,” and other trademarks obtained a high fame in the field of electrical products. At the same time, Schneider China has established a specific relationship with the products it provides. The “Schneider in Chinese” tradename has become an influential company brand that can be protected under the Chinese Anti-Unfair Competition Law. Dongheng used the words “Hangzhou Shinaide (Schneider in Chinese) Electric Co., Ltd.” on the “http://www.schneider-chinacom” website to offer for sale and sold electrical products such as circuit breakers. The “Shinaide” and the foreign language “schneider” used on Dongheng’s tradename and its domain name constituted as identical or similar marks to Schneider China’s “Schneider in Chinese” trade name. As a business operator of the same industry, Dongheng should be aware of the reputation of the “Schneider in Chinese” brand name. Dongheng continued to use “Shinaide” as its tradename and as part of its domain name of the accused website after it had previously undertook not to use “Shinaide” in its tradename in a lawsuit. Dongheng’s actions showed subjective intention to free ride other’s fame, and objectively caused confusion to the relevant public. Dongheng’s actions amounted to unfair competition. The court comprehensively considered the reputation of the “Schneider” brand name, the size of Dongheng, the duration of the infringement, the circumstances of the infringement, the bad faith of Dongheng, and the reasonable expenses Schneider China spent to stop the infringement and determined that Dongheng should compensate Schneider China for economic losses of RMB1 million (USD156,961) (including reasonable expenditure of RMB 120,000).

2. The Beijing High Court cited claim preclusion in affirming the “Rejoice in Chinese” trademark invalidation case

The “Rejoice in Chinese” trademark (“Disputed Mark”) with registration number 3313331 was filed by an individual He Dun on September 19, 2002. Proctor & Gamble (“P&G”) filed an opposition against the Disputed Mark when the Chinese Trademark Law 2001 was still in force. The Disputed Mark was later approved for registration after an opposition appeal, first instance, and second instance appeals.

While the Chinese Trademark Law 2013 was in force, P&G filed an invalidation against the Disputed Mark. After adjudication, the CNIPA invalidated the Disputed Mark because the Disputed Mark violated Article 13(2) of the Chinese Trademark Law 2013. He Dun was unsatisfied with the CNIPA’s decision and appealed to the Beijing Intellectual Property Court.

The Beijing IP Court found that the opposition filed by P&G in 2001 has clearly stated cited P&G’s own prior registered trademark “Rejoice in Chinese” with registration number 543381 and claimed that the Disputed Mark violated Article 13(2) of the Chinese Trademark Law 2001, which was an identical claim to this case. Evidence submitted for this case were identical to those submitted for the opposition filed based on the Chinese Trademark Law 2001, the evidence cannot reflect whether the time of its formation was after the opposition decision was made, there were no evidence showing that there were circumstances that could not be previously obtained due to objective reasons, or the evidence would have substantially affected the application of Article 13(2) of the Chinese Trademark Law 2001 in the opposition. Thus, P&G’s invalidation constituted as claiming identical facts and reasons to a prior case, which violated the principle of claim preclusion. P&G’s new citation of its registered trademark “Rejoice & Rejoice in Chinese & Design” with registration no. 3008024 did not violate the principle of claim preclusion, but the registration date was later than the application date of the Disputed Mark. Even if such mark was recognized with well-known mark status, P&G would not be able to prove that such mark had obtained well-known status prior to the Disputed Mark’s application date, because well-known mark protection for non-similar or non-identical goods can only extend to the registration date of the well-known mark. Accordingly, the Beijing IP Court concluded that the P&G’s invalidation was claim precluded because the same issue was previously decided on merit citing Article 13(2) of the Chinese Trademark Law, and revoked the CNIPA’s invalidation decision. The Beijing IP Court’s decision was then appealed to the Beijing High Court.

The Beijing High Court in its decision affirming the Beijing IP Court’s decision reasoned that “the scope of the administrative power of the people’s court for trademark granting and verification shall generally be determined based on the plaintiff’s litigation claims and reasons. If the plaintiff did not raise a claim in its complaint but the relevant findings of the Trademark Review and Adjudication Board were obviously improper, the people’s court may review the relevant matters and make judgments after the parties have stated their opinions.” The evidence in the case can prove that He Dun filed and obtained hundreds of trademarks identical or similar to other famous trademarks in Classes 3, 5, 16, 20, 24, 30, and 32, and failed to provide reasonable explanations on his intention and creative sources of the designs of his massive filings for distinctive and famous trademarks, which can be seen as He Dun has the subjective malice of plagiarizing and imitating other people’s trademarks, and constituted as bad faith registrations that should not be limited by the five-year limitation for filing invalidation under the Chinese Trademark Law. Considered that the CNIPA’s invalidation decision was revoked and the CNIPA was ordered to issue a new decision for the Disputed Mark, the Beijing High Court ordered the CNIPA to reexam the case based on Article 45(1) of the Chinese Trademark Law for He Dun’s bad faith.

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