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Weekly China Trademark News Updates
September 20, 2022
1. Unauthorized use of the exact same design as a Royal Oak watch constitutes trademark infringement and unfair competition, and RMB 1 million in damages
Recently, the Shenzhen Intermediate Court has rendered a judgment for Audemars Piguet Holding S.A. (“Audemars Piguet”) against Hengbo Zhang in a trademark infringement and unfair competition dispute. The court found that the defendants’ acts constituted trademark infringement and unfair competition, and ordered the defendants to compensate the plaintiff for economic losses and reasonable expenses of RMB 1 million (USD142,720).
Audemars Piguet manufactures, promotes, and sells self-branded watches. It launched the “Royal Oak” watch model in 1972. Audemars Piguet registered the “Royal Oak” trademarks (“Cited Marks”) on February 17, 1992 and September 12, 2016, respectively. The said trademarks were approved for use on goods in Class 14 for watches and jewelry. Audemars Piguet claimed that the defendant used a stylized “Royal One” logo (“Disputed Mark”) on a watch. When comparing the two, it can be clearly noticed that the similarity of the designs between the two. At the same time, the defendant’s watch copied the unique design features of the plaintiff’s “Royal Oak” and “Royal Oak Offshore” series of watches, including but not limited to the watches sold by the defendant under the name of “DIDUN DESIGN” that highly replicated the “Royal Oak” “Royal Oak Off Shore” series watch owned by Audemars Piguet.
The court found that the accused infringing goods were watches which were identical to the approved goods under the plaintiff’s Cited Marks. Compared with the Cited Marks, the logo “Royal One” on the accused infringing goods has a similar overall visual effect. In addition, compared with the plaintiff’s “Royal Oak” trademark, the artistic expression, visual effect and conceptual design of the “Royal One” logo on the alleged infringing goods were identical. In summary, the alleged infringing logo was similar to the Cited Marks, which may easily lead consumers into mistakenly believing that the goods sold under the infringer’s trademark originated from the plaintiff or that there was some connection between them, which constituted trademark infringement. Regarding unfair competition, Royal Oak and Royal Oak Offshore watches are well-known in the watch industry. The dial design of Royal Oak watches is very unique, which is different from ordinary watches. The shape has the function of distinguishing the source of the goods. The defendant used the exact same design as the Royal Oak watch without authorization, with the purpose of taking advantage of the goodwill of the Royal Oak watch, causing confusion or misleading of the relevant public. The defendant violated the principle of good faith and constituted an act of unfair competition as stipulated in Article 6(1) of the Anti-Unfair Competition Law.
2. A new round of amendments to the Trademark Law and its implementing regulations intend to clarify the civil liability for damages caused by bad faith squatting
A new round of preparations for the revision of the Trademark Law and its implementing regulations will pay more attention to the protection of rights and public interests, social effects, and balance of rights first, clarify the boundaries of the exercise of rights, solve the problem of insufficient maintenance of public interests, and promote a reasonable balance of rights and obligations. First, by strengthening the construction of integrity in the trademark fields, emphasizing that no deception or other improper means should be used to apply for or obtain trademark registration; study and clarify the liability for providing false materials; strengthen credit supervision and credit punishment. Second, to further regulate bad faith trademark registrations, and to study effective regulations by increasing the amount of fines, clarifying the civil compensation liability for losses caused to others by bad faith squatting, establishing a system for assigning bad faith squatted trademarks, improving prohibition rules for trademarks containing geographical names, and other measures to curb bad faith trademark registrations. Third, to regulate the exercise of rights, prevent abuse of rights, and clarify the boundaries of the exercise of the exclusive right to use a trademark. It is proposed to stipulate that registered trademarks may be revoked for the improper exercise of the exclusive right to use a trademark. The introduction of a bad faith litigation counter-compensation system is under research. Fourth, to strengthen the social nature of trademark examination and trial work, and plan to set up a discretionary procedure for revocation of preliminary publication. Fifth, to strengthen the supervision and management of the trademark agency industry, clarify the access requirements for the trademark agency industry, and standardize the trademark agency behavior.
Continue to strengthen the obligation to use trademarks, make up for its shortcomings on the basis of adhering to the existing registration system, and focus on solving the problem of “emphasizing registration and neglecting use.” First, improving the concept of trademark use and highlight the basic status of use. Second, on the basis of retaining the non-use cancellation system, study the feasibility of introducing a trademark use commitment and active submission of use during its registration. Third, adding regulations on revocation of trademarks ex officio. If the trademark registrant fails to fulfill the promise of use, fails to submit a description of the use according to law, or improperly exercises the exclusive right to use the trademark, the registered trademark can be revoked ex officio.
3. Alibaba Technology (Beijing) Co., Ltd. was fined for representing Eileen Gu’s trademark
On September 6, 2022, the Beijing Market Supervision Bureau issued an administrative penalty decision of Jingshi Jian Punishment  No. 181 against Alibaba Technology (Beijing) Co., Ltd. to represent the trademarks “Gu Ailing in Chinese” and “EILEEN GU.” The penalty decision held that Alibaba represented the two applicants for a total of 4 trademarks in the “Gu Ailing in Chinese” and “EILEEN GU” trademarks in June 2019 and February 2020, which violated the provisions of Paragraph 3 Article 19, and Article 32 of the Trademark Law. A warning and a fine of RMB 80,000 (USD11,400) was issued.
The provisions of Paragraph 3, Article 19 and Article 32 of the Trademark Law stipulates that it is illegal when agency knowingly or should have known that its client filed trademarks that infringes others’ prior rights, but still accepts the entrustment. The Beijing Market Supervision Bureau believes that as a public figure and Olympic champion, Eileen Gu’s name itself has a certain influence and attraction and has an “endorsement” effect. If her name is registered as a trademark without authorization, this will not only infringe Eileen Gu’s name right, but will also infringe on the prior rights and interests of others, and easily affect their good public image. Therefore, anyone’s registration of “Gu Ailing in Chinese” and “EILEENGU” should abide by relevant laws and regulations. As a trademark registration agency, the party concerned knew or should have known about the content, but still accepted to act as the applicants’ entrusted agency to register and apply for the “Gu Ailing in Chinese” and “EILEEN GU” trademarks, which damaged Eileen Gu’s prior rights and caused adverse social impact.
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