Weekly China Trademark News Updates

November 3, 2021

1. KFC’s “KFC Zhaijisong in Chinese” mark application was rejected

On October 18, 2021, the Beijing High Court made a second-instance judgment that rejected KFC’s trademark application for the “KFC Zhaijisong in Chinese (fast home delivery)” mark with application number 22264630 in Class 39 (“Disputed Mark”).

Disputed Mark	Cited Mark 1	Cited Mark 2	Cited Mark 3	Cited Mark 4

The court found that the Disputed Mark consisted of the distinctive parts of the Cited Mark 1 and 2, and Cited mark 4, namely “Zhaijisong in Chinese.” The Disputed Mark also shares the identical first three Chinese characters of the Cited Mark 3. The Disputed Mark was similar in letter composition, pronunciation, meanings, and overall appearances with the Cited Marks 1 to 4. If the Disputed Mark was allowed to be used on identical or similar services with the Cited Marks 1 to 4, it would easily cause the relevant public when paying general attention to be confused and believe that the Disputed Mark and the Cited Marks 1 to 4 were owned by the same party or had particular associations.

Whether “Zhaijisong in Chinese” indicates a delivery method and its level of distinctiveness is not a factor in determining whether the Disputed Mark constituted as a similar mark to each of the Cited Marks. If the issue of the distinctiveness of a cited trademark is overemphasized, subsequent trademark applicants are allowed to register a new trademark by adding other elements to a trademark that has been approved for registration by others is actually a direct denial of the validity of that registered trademark. This practice of not protecting a prior trademark and making it indirectly invalid not only directly damages a prior trademark owner’s rights but also affects the order of trademark registration and obscures the functional positioning between various legal provisions.

2. Ferrero’s 3D trademark application for Kinder Surprise egg is finally approved for registration on chocolate goods

Ferrero & Co., Ltd. (“Ferrero”) filed a trademark application for 3D packaging of the Kinder Surprise egg with designated color with application number 32315366 (“Disputed Mark”) was rejected by the CNIPA for lack of distinctiveness. Upon rejection appeal, the CNIPA allowed the Disputed Mark to be registered on chocolate goods.

In the rejection appeal, the CNIPA reasoned that the Disputed Mark consisted of an eggshell-shaped 3D logo in designated colors red, blue, and white with the word “Kinder.” The eggshell-shaped 3D logo with designated colors had distinctiveness when used on chocolate goods. The word “Kinder” also had distinctiveness when used on chocolate goods. Meanwhile, the applicant submitted sufficient evidence to prove that since the Disputed Mark entered the China market, the applicant had extensively promoted the Disputed Mark and allowed it to obtain certain fame on chocolate goods and formed a one-to-one corresponding relationship. Accordingly, the Disputed Mark had distinctiveness on chocolate goods and had increased its identification through actual use in order to be used to distinguish the source of the goods.

The “dessert” goods designated for the Disputed Mark covered wider range of goods and was not specific, which could be seen as a food container when used on “dessert” goods and lacked distinctiveness. Meanwhile, the applicant failed to submit sufficient evidence to prove that the Disputed Mark has become distinctive through use on dessert goods. Accordingly, the Disputed Mark’s application on dessert goods constituted the situation referred to in Article 11(3), Paragraph 1 of the Chinese Trademark Law.

3. 48 Defendants were sentenced for counterfeiting name brand products

Recently, in order to crack down on infringement and counterfeiting, the Intellectual Property Tribunal of Shanghai Pudong Court has convicted several intellectual property criminal cases involving well-known brands such as Chanel, Cartier, Gucci and etc.

In a series of cases, the defendants processed and produced counterfeit clothing of brands such as Chanel, Gucci, Balenciaga, Dior, Fendi, Loewe, and LV, with sales amounting to more than RMB 42.4 million (USD 6.63 million). After the trial, the Shanghai Pudong Court held that the defendant Liu employed a large number of people to produce and sell counterfeit clothing of a number of internationally renowned brands in order to obtain illegal benefits. His actions constituted the crime of counterfeiting registered trademarks and had subjective bad faith and had serious negative impacts to the society. Therefore, Liu was sentenced to five years and nine months’ imprisonment and a fine of RMB 11.7 million (USD 1.83 million). The three other defendants, Zhang, Wang, and Li were also sentenced and fined.

4. The CNIPA rejected 20,700 bad faith trademark applications in the first half of 2021

In the first half of 2021 alone, the CNIPA rejected 20,700 bad faith trademark applications. Last year, the intellectual property departments within the Chinese government concentrated on meeting and rectifying large-scale trademark trading platforms and removed more than 1.6 million trademark applications that were suspected of trading with bad faith intent.

At the same time, the overall trademark registration cycle has been further reduced. The average examination cycle of trademark registration has been reduced from 9 months to less than 4 months. By the end of 2021, the average examination time for trademark assignment, opposition, rejection, and invalidation will be reduced to 1.5 months, 12 months, 5.5 months, and 9 months, respectively. The examination cycle for trademark changes and renewals for electronically filed applications will be further reduced to 4/5 of the current examination time.

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