Weekly China Trademark News Updates

October 25, 2023

1. A trademark containing deceptive elements cannot be registered by giving up some of its constituent elements and limiting the scope of goods

Disputed Mark	Designated Goods
No. G1563666	Class 22: Carbon fibers for textiles; nonwoven polymer fibers for textiles; textile fibers; plastic fibers for textiles; chemical fibers for textiles; polyimide fibers for textiles; all the above goods are related to polyimide (PI) in the field of new materials.

In an administrative dispute between PI Advanced Materials Co., Ltd. (“PAM”) and CNIPA, the Beijing Intellectual Property Office ruled to reject the PAM’s claim.

The focus of the dispute in this case is whether the extended territorial protection of the Disputed Mark for use in Class 22 in China violates the provisions of Article 10(1)(vii) of the Chinese Trademark Law.

The court found that although the goods designated for use by PAM’s Disputed Mark have been limited to “all the above-mentioned goods that are related to polyimide (PI) in the field of new materials”, however, this limitation is PAM’s own limitation on Class 22 related goods. This specific limitation came from its UK-specific basic trademark application. PAM did not submit evidence to prove that the above restrictions had a substantial impact on the goods designated for use for the Disputed Mark. For international registrations that designated China, the CNIPA exams in accordance with the China Trademark Law and relevant regulations. If the application satisfies the Trademark Law or relevant regulations or the trademark used on partial designated goods satisfies the Trademark Law or regulations, it will be preliminarily approved and published for opposition.  The Disputed Mark consisted of the English words “PI” “Advanced Materials” and a design. The English part has the meaning of “polyimide” “advanced materials or new materials” and is designated for use in Class 22 for “carbon fiber for textiles” and other goods. However, the said goods do not necessarily use polyimide in the field of new materials. Based on the general understandings and daily life experience, the public would easily associate the said goods’ characteristics with the attributes of the goods designated by the Disputed Mark, which would cause the public to misunderstand the composition, quality and other characteristics of the goods “carbon fiber for textiles” in Class 22.

In addition, although PAM claimed that it had abandoned the exclusive right to use the English words “PI” and “Advanced Materials” in the Disputed Mark, the relevant public did not naturally know the relevant circumstances of the abandonment of the exclusive rights in the Disputed Mark and would still use the English “PI” and “Advanced Materials” as constituent elements and distinctive part of the trademark. Article 10(1)(vii) of the Trademark Law is an absolute factor in prohibiting the registration of a trademark, and a sign that violate this provision shall not be used as trademarks. Where a mark itself lacks the said characteristic it cannot be overcome by adding other elements or through subsequent use. PAM’s claim that the design part of the Disputed Mark was identifiable and has a high reputation after use does not affect the judgment of whether the Disputed Mark violates Article 10(1)(vii) of the Trademark Law. In addition, trademark right authorization and confirmation cases follow the principle of case-by-case review, and the application, examination, and approval status of other trademarks do not necessarily have relevance to this case. Therefore, the CNIPA’s conclusion that the Disputed Mark violates Article 10(1)(vii) was correct and shall be affirmed.

2. The use of a registered mark in the title of an online store product link constitutes trademark infringement

The Zhejiang High Court recently concluded a trademark infringement dispute between the appellant Chongqing Jinlingyang E-commerce Co., Ltd. (“Jinlingyang”), the appellant Hubei Liangpinpuzi E-commerce Co., Ltd. (“Liangpinpuzi”), and the appellee Zhejiang Tmall Network Co., Ltd. (“Tmall”). The court affirmed the lower court’s decision.

Jinlingyang is the registered trademark owner of the “Zihaiguo in Chinese” trademark with reg. no. 28149844 and claimed that Liangpinpuzi uses of the word “Zihaiguo” in the product link title of its online store constituted a trademark infringement of its said registered trademark. The first instance court found that Liangpinpuzi’s action constituted trademark infringement of Jinlingyang’s registered trademark and ordered Liangpinpuzi to compensate Jinlingyang for economic losses and reasonable expenses incurred to stop the infringement totaling RMB 60,000 (USD8,200). Both parties appealed the first instance judgment.

The key issues of the dispute in the second instance court are: 1. Whether Liangpinpuzi’s action constituted trademark infringement. 2. If there is an infringement, whether the amount of compensation determined by the first instance judgment is reasonable.

Regarding the first issue, the Zhejiang High Court found that the word “Zihaiguo” was used in the product link title of Liangpinpuzi’s subsidiary’s online store to promote the product played a role in identifying the source of the product, and it was a trademark use. The accused infringing product is a self-heating hot pot, which is similar to instant rice, lunch boxes, instant vermicelli and other products approved for use by Jinlingyang’s registered trademark “Zihaiguo” with reg. no. 28149844. “Zihaiguo” is a fanciful word with strong distinctiveness. Liangpinpuzi argued that “Zihaiguo” is a descriptive term but failed to provide sufficient evidence to support its claim. Comparing the accused infringement mark “Zihaiguo” with Jinlingyang’s registered trademark, the text composition, pronunciation, and meaning are all the same. Only the fonts are different. The two constitute similar trademarks. Liangpinpuzi used the word “Zihaiguo” in the title of a product sales link similar to Jinlingyang’s registered trademark, which could easily cause the relevant public to misunderstand the source of the product or believe that its source is specifically related to the product with Jinlingyang’s registered trademark, which would cause confusion and mistaken beliefs. Therefore, the accused action of Liangpinpuzi constituted a trademark infringement of Jinlingyang.

Regarding the second issue, the Zhejiang High Court found that Liangpinpuzi had infringed upon Jinlingyang’s registered trademark rights and should bear legal responsibilities such as stopping the infringement and compensating for losses. Regarding the amount of compensation, in the second instance, Jinlingyang claimed a compensation amount of RMB 1.5 million (USD205,007) based on the sales volume of the infringing products of Liangpinpuzi. The Zhejiang High Court held that the first-instance court obtained the transaction data of the accused infringing products from Tmall. The sales volume of the infringing links with the words “Zihaiguo” were 8,220 and 11,469 items, respectively, of which 1,794 were duplicate orders. Although Jinlingyang disputed the data, it did not provide contrary evidence. Under such circumstances, it was not inappropriate for the first instance court to adopt the sales data and use it as a consideration in determining the amount of compensation. Since Jinlingyang’s losses due to the infringement or Liangpinpuzi’s profits from infringement could not be completely ascertained, the first instance court comprehensively considered the nature, manifestation, circumstances and consequences of the infringement of Liangpinpuzi, the price, sales of the infringing products data, the reasonable expenses paid by Jinlingyang to stop the infringement and other factors. The court determined that Liangpinpuzi should compensate Jinlingyang for economic losses of RMB 60,000 (including reasonable rights protection expenses) in the form of statutory compensation, which was within the discretion of the court and was not inappropriate. In summary, the appeals from both parties shall be rejected.

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