Weekly China Trademark News Updates

June 28, 2023

1. The Beijing Intellectual Property Court released the Proposal on Online Submission of Litigation Materials in Electronic Format

On June 25, the Beijing IP Court released the Proposal on Online Submission of Litigation Materials in Electronic Format (“Proposal”), advocating that the parties should choose to use online litigation platforms to submit various litigation materials in electronic format as a priority.

The transition period for the said mechanism is from the release date of the Proposal (June 25, 2023) to July 15, 2023. During the period, the Beijing IP Court will conduct publicity and lectures in various forms, and deal with feedback issues and suggestions from all parties. After the transitional guidance period, the parties shall submit litigation materials in accordance with the requirements of the Guidelines for Submitting Electronic Litigation Materials.

Attached to the Proposal is the “Guidelines for the Submission of Electronic Litigation Materials in Administrative Cases of Trademark Refusal Review of Beijing Intellectual Property Court (Trial)“, which defines the electronic litigation materials and stipulates the submission methods (online + compact discs), format templates, file size and format requirements, naming rules, submission rules, etc. It is worth noting that the Guidelines specifically recommend that “the plaintiff should submit all evidence at once upon filing the case.” In addition, the case check list, which was generally submitted at the pre-litigation mediation stage before, is also one of the case docketing materials and needs to be submitted at the time of official docketing.

2. Overturning the decisions of the TMO, TRAD, and the Beijing IP Court, the Beijing High Court found no detrimental influence in the mark “Jing Heng De Li in Chinese”

Beijing Watches & Glasses Co., Ltd. (“Beijing Watch Company”) applied for the registration of the mark “(JING HENG DE LI, the starting character “京” is short for Beijing)” (“Disputed Mark”) in Class 9 on September 21, 2010. After refusal review, the trademark was preliminarily approved to be used on “timer; electrical plug; eyeglasses; eyeglass cases; eyeglass lenses; eyeglass frames; eyeglass chains” on January 20, 2017.

Shanghai Sanlian (Group) Co., Ltd. filed an opposition to the said trademark within the opposition period, citing its prior registration of the mark “(SHEN HENG DE LI, the starting character “申” could be another name for Shanghai)” in Class 37 and other trademarks, and asserted on absolute grounds that the Disputed Mark was deceptive and its registration was prone to adverse effects.

After examination, the TMO decided the Disputed Mark shall not be registered, affirming that “Heng De Li in Chinese” is a time-honored brand with a history of one hundred years in China’s watch and glasses sales and repair industries. Its goodwill was accumulated by many Heng De Li shops in the country and shall be enjoyed by all the Heng De Li shops in China. It shall not be exclusively owned by any one of them. If the registered use of the Disputed Mark was approved and monopolized on its designated products, it would easily confuse consumers, cause damage to the interests of Heng De Li enterprises, and have adverse social impacts.

Beijing Watch Company filed an appeal against this registration refusal decision, but the TRAD also found that the application for registration of the Disputed Mark constituted the situation of “other adverse effects” referred to in Article 10(1)(viii) of the Trademark Law 2019.

Beijing Watch Company filed a lawsuit with the Beijing IP Court, but was not supported. So it continued to file a second instance appeal, arguing that:

1. The Disputed Mark is not a sign that is harmful to socialist morality or has other adverse effects, and its application for registration does not violate the provisions of Article 10(1)(viii) of the Trademark Law 2019.
2. According to the principle set by prior rulings and judgments, the Disputed Mark was applied and used by Beijing Watch Company, which has a certain historical relationship with “Heng De Li.” And the character “JING”, which is the genuine domicile of the company, was added before “Heng De Li”, so that the logo can distinguish the Beijing Watch Company from other Heng De Li enterprises in the country, and will not have adverse social impact. The first instance court did not consider the background of the application for registration of the Disputed Mark, which is an obvious factual error.
3. The TRAD’s examination decision that the application for registration of the Disputed Mark violated the provisions of Article 10(1)(viii) of the 2019 Trademark Law is against the principle of consistency of examination standard and the principle of fairness for same rulings in same cases, and has damaged the reasonable expectation of Beijing Watch Company as the administrative counterpart.

After the trial, the Beijing High Court decided the final judgment as follows:

In this case, the Disputed Mark is composed of the Chinese character “Jing Heng De Li,” which was a fabricated word, and the evidence in the case was not sufficient to prove that the use of the Disputed Mark or its constituent elements on products such as ” eyeglasses” was harmful or has negative impact on China’s socialist morality, social public interests, and public order. Although the previous judgments have determined that “Heng De Li” was a time-honored brand with a long history in China’s eyewear and watch industries, it cannot be determined that the “Heng De Li” logo falls into the scope of China’s social public interest or public order. Therefore, the application for registration of the Disputed Mark did not violate Article 10(1)(viii) of the 2019 Trademark Law. The original judgment and the sued decision made an error in this determination and should be corrected.

3. Though failed to oppose “CANTERBURY” from registration, Canterbury managed to invalidate the squatter mark based on bad faith at court stage

In July 2004, Beijing Sanwei Hezhong Business Management Co., Ltd. (“Sanwei Hezhong”) applied for the registration of the “” mark (“Disputed Mark”) for “toys; sports balls; sports equipment” and other goods in Class 28.

Canterbury Co., Ltd. (“Canterbury”) filed an opposition and later an opposition appeal against the Disputed Mark. The TRAD in the opposition appeal determined that the Disputed Mark violated Article 10(1)(viii) of the Trademark Law and should not be registered. Sanwei Hezhong was dissatisfied and appealed to the court. After the first instance at the Beijing First Intermediate Court and the second instance at the Beijing Higher Court, both courts found that the Disputed Mark violated Article 10(1)(viii) of the Trademark Law. Sanwei Hezhong appealed to the Supreme People’s Court for retrial. On December 19, 2017, the Supreme People’s Court ruled that the registration of the Disputed Mark did not violate Article 10(1)(viii) of the Trademark Law. The Disputed Mark was subsequently published for registration in April 2018.

In October 2018, Canterbury filed an invalidation against the Disputed Mark for violating Article 30 (similar trademarks on similar goods) and Article 32 (previous enterprise name and pre-registration of its prior use mark by improper means), and the first paragraph of Article 44 (obtaining registration by other improper means) of the 2014 Trademark Law. The TRAD did not support its requests.

Canterbury then appealed to the Beijing IP Court. After the hearing, the court held that:

Evidence from Canterbury showed that its brand of “CANTERBURY” and bird head graphics has relatively high fame, and the trademarks had been registered and used in mainland China before the application date of the Disputed Mark. Sanwei Hezhong applied for the registrations of multiple trademarks that were identical or similar to Canterbury’s trademarks in multiple classes of goods or services, and its brand promotion and domain name registrations also showed that it subjectively free-rided on Canterbury’s brand popularity and misled consumers. Therefore, the application for registration of the Disputed Mark constituted the situation of “obtaining registration by other improper means” in the first paragraph of Article 44 of the 2014 Trademark Law.

Then Sanwei Hezhong filed an appeal before the Beijing High Court and the second instance court, after holding an inquiry among the three parties, ruled as follows.

According to the evidence in the case, before the application date of the Disputed Mark, “CANTERBURY” and the bird’s head logo brand under the name of Canterbury already had a relatively high reputation. During the period from July 2004 to February 2005, Sanwei Hezhong applied for the registration of “CANTERBURY,” “Ken Bai Li in Chinese,” bird’s head logo and other nine trademarks. Among them, the bird head logo was determined to have damaged the prior copyright of Canterbury; the “CANTERBURY” was completely included in Canterbury’s marks; and the “Ken Bai Li in Chinese” marks have similar pronunciation with Canterbury’s marks. Sanwei Hezhong failed to provide a reasonable explanation for the said trademark applications, and there were also domain name registrations and other activities.

Although Sanwei Hezhong submitted evidence of the use of the Disputed Mark at the second instance, however, the number of sales contracts, consignment notes, and invoices submitted were very little, and the corresponding dates were all in 2020, which was more than ten years since the application date of the Disputed Mark. The said evidence of use is not enough to prove that Sanwei Hezhong has continued using the Disputed Mark, and as an operator in the same industry of sporting goods, it cannot prove that its application for the Disputed Mark has subjective good faith through the small amount of use evidence. Therefore, it can be determined that the application for the Disputed Mark has the subjective intention of free-riding the market reputation of others, which disrupts the normal order of trademark registration management and damages the public interest. The registration of the Disputed Mark constituted the situation of “obtaining registration by other improper means” as stipulated in the first paragraph of Article 44 of the 2014 Trademark Law. Sanwei Hezhong’s appeal lacked factual and legal basis and should not be supported.

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