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Well-Known Mark Recognitions in China – Part III

by Yan Zhang, Feifei Bian & Austin Chang

In Part II of this series, we shared our representative cases on how to apply the concept of anti-dilution for the protection of a well-known trademark in administrative trademark litigations. In Part III, we selected our representative cases to further illustrate how the courts apply well-known mark recognition and extend the scope of protection for a well-known mark.

1. RITZ-CARLTON v. “LI SI KA ER DUN in Chinese”

Chengdu Zhi Zhi Real Estate Development Co., Ltd. (“Zhi Zhi”) applied for the “LI SI KA ER DUN in Chinese (丽思卡尔顿)” mark (“Disputed Mark”) with App. No. 5336988 in Class 36 for “commercial housing sales services; insurance; capital investment; art valuation; real estate agency; agency; guarantee; raise charitable funds; entrusted management; pawn shop” on May 9, 2006. The Disputed Mark was approved for registration on October 14, 2009.

Disputed Mark	Cited Mark 1	Cited Mark 2

Ritz-Carlton owns prior registrations for the “RITZ-CARLTON” mark (“Cited Mark 1”)  and the “LI SI KA ER DUN in Chinese (丽思卡尔顿)” mark (“Cited Mark 2”) in Class 42 (Class 43) for “hotels; restaurants; barbeque restaurants; tea rooms; etc.”

Ritz-Carlton filed a dispute cancellation against the Disputed Mark on March 28, 2010 before the CNIPA (then the Trademark Review and Adjudication Board). The CNIPA issued a decision that maintained the Disputed Mark’s validity on August 29, 2011. Unsatisfied, Ritz-Carlton appealed to the Beijing First Intermediate Court.

On December 20, 2012, the Beijing First Intermediate Court reversed the CNIPA’s decision. Zhi Zhi was unsatisfied and appealed to the Beijing High Court. On July 31, 2013, the Beijing High Court, as the second instance court, issued the final decision that affirmed the Beijing First Intermediate Court’s decision against Zhi Zhi.

In this case, the Beijing High Court found that the Disputed Mark consisted of “LI SI KA ER DUN in Chinese (丽思卡尔顿)” and before the Disputed Mark’s application date, media and the Internet had widely adapted and used “LI SI KA ER DUN in Chinese (丽思卡尔顿)” to refer to RITZ-CARLTON. Ritz-Carlton submitted sufficient evidence during the administrative and judicial proceedings to prove that they had received great businesses in the hotel industry, received numerous awards, and attracted high levels of media’s attention before the Disputed Mark’s application date. Namely, before the Disputed Mark’s application date, “LI SI KA ER DUN in Chinese (丽思卡尔顿)” could often be seen on various newspapers and the Internet, and such constant media reports subjectively expanded the societal influence of the “LI SI KA ER DUN in Chinese (丽思卡尔顿)” brand, allowed Ritz-Carlton to enjoy high fame among the relevant public in China. Thus, the Disputed Mark constituted as a translation of “RITZ-CARLTON.” Consider the “RITZ-CARLTON” mark obtained relative high fame on hotel related services through uses and promotions, and the Disputed Mark’s approved services for “sales services for commercial real estate and real estate agency” were related to the hotel services, the Disputed Mark’s registration was likely to cause confusion to the public and damage Ritz-Carlton’s interests. The Beijing First Intermediate Court correctly recognized the “RITZ-CARLTON” mark as a well-known mark, based on the evidence submitted, to protect Ritz-Carlton’s trademark rights according to Article 13(2) of the 2001 Chinese Trademark Law (“TM Law”)  (Article 13(3) of the 2019 TM Law).

2. “YAHOO!” v. “YahaoSoft”

Beijing Jing San Pu Business Trading Co., Ltd. (“Jing San Pu”) applied for the “YaohaoSoft” mark (“Disputed Mark”) with App. No. 3610948 in Class 42 for “intellectual property supervision; computer leasing; computer programming; computer software coding; computer software maintenance; creation and maintenance of websites for others; hosting computer stations (websites); computer hardware consulting” on June 30, 2003. The Disputed Mark was published for opposition on May 28, 2005.

Disputed Mark	Cited Mark

Yahoo! owns prior registrations for the “YAHOO!” mark (“Cited Mark”) in Class 42 for “computer service; namely: to query and retrieve the information used on the computer network.”

Yahoo! filed an opposition against the Disputed Mark with the CNIPA on December 1, 2009 and the CNIPA refused the Disputed Mark for registration. Jing San Pu appealed to the Beijing First Intermediate Court. Yahoo! attended the hearing as a third-party attendee. The Beijing First Intermediate Court affirmed the CNIPA’s decision.

In its decision, the Beijing First Intermediate court found that except intellectual property supervision, all other services such as computer leasing, computer programming, etc. were similar to the Cited Mark’s approved services “computer service; namely: to query and retrieve the information used on the computer network.” The “Soft” of the “YahaoSoft” can be understood meaning “software” when used on computer related services, which had weak distinctiveness, and the “Yahao” part was the distinctive part of the Disputed Mark. When compared the Disputed Mark’s distinctive part “Yahao” with the Cited Mark “YAHOO!,” it was obvious that the font and pronunciation were similar. If both marks were to co-exist on identical or similar services, it was likely to cause relevant consumer to be confused or mistaken on the source of services. Thus, the Disputed Mark constituted a similar mark with the Cited Mark according to Article 28 of the 2001 TM Law (Article 30 of the 2019 TM Law).

Yahoo! submitted sufficient evidence during the administrative proceeding to prove that Yahoo! had been using its English trade name “YAHOO!” for computer network related services prior to the Disputed Mark’s application date. Yahoo!’s trade name had attracted market reputation from the relevant public through use. There were strong associations between the computer network related services provided by Yahoo! and the Disputed Mark’s designated services of computer leasing, computer software coding, etc. Accordingly, when the Disputed Mark was registered on the said designated services, the relevant public was likely to be confused as to the source of services and Yahoo’s prior trade name right would be damaged according to Article 31 of the 2001 TM Law (Article 32 of the 2019 TM Law).

The evidence Yahoo! submitted during the administrative proceeding proved it had attracted market reputation before the Disputed Mark’s application date on computer related services, namely, to query and retrieve the information used on the computer network. Combined with the fact that the Disputed Mark’s main distinguishable part was similar to the Cited Mark in font and pronunciation, which constituted as the Cited Mark’s imitation. Although the intellectual property supervision services designated under the Disputed Mark was not similar to the computer services designated under the Cited Mark, given that the Cited Mark had reached well-known status, the Disputed Mark’s use on the said services would likely to cause the relevant public to mistaken that the Disputed Mark had certain association with the Cited Mark, and potentially damage the Cited Mark owner’s interests according to Article 13(2)of the 2001 TM Law (Article 13(3) of the 2019 TM Law).

3. Beijing East IP analysis and comments

In Part I of this series we mentioned that a mark can be recognized as well-known based on the principles of case-by-case recognition and need-based recognition. The main issue presented in the two cases is when and how to apply well-known mark recognition in each case.

First, in the RITZ-CARLTON case, Ritz-Carlton based its grounds on Article 10(1)(viii), Article 13(2), Article 31, and Article 41(1) of the 2001 TM Law. The court found that the Disputed Mark’s registration does not fall into the conditions described in Article 10(1)(viii), Article 31, Article 41(1). The court only applied Article 13(2) in finding that Zhi Zhi’s trademark registration in Class 36 would damage Ritz-Carlton’s well-known mark in Class 42 (Class 43). Here, although Ritz-Carlton based its grounds on four different articles, the court held that the articles other than Article 13(2) did not apply, and that it was necessary to recognize the cited mark as a well-known mark to protect Ritz-Carlton’s trademark rights.

In the YAHOO! case, Yahoo! based its grounds on Article 13(2), Article 28, and Article 31 of the 2001 TM Law. The court applied Article 28 in finding that the Disputed Mark constituted as a similar mark to the Cited Mark when used on similar services. The court also applied Article 31 in finding that the Disputed Mark’s registration on services similar to those services approved under the Cited Mark would damage Yahoo!’s prior trade name right. Here, since the court had applied Article 28 and Article 31 in protecting Yahoo!’s rights against the designated services on computer related services under the Disputed Mark, the court did not apply Article 13(2) for cross-class protection regarding the computer related services. The court’s application of laws clearly demonstrated that when the interest party’s rights can be protected by certain articles raised in its argument, the court will not apply the article regarding well-known mark recognition.

Second, although well-known mark recognition provides cross-class protection, such protection only extends to the relevant goods or services covered by the level of the mark’s well-known status, that is, the cross-class protection does not extend to all 45 classes. In the RITZ-CARLTON case, the court recognized the “RITZ-CARLTON” mark was well-known in hotels services. The Disputed Mark’s approved goods on commercial housing sales services and real estate agency services were related to hotels services. Based on this finding, the court concluded that the Disputed Mark’s registration on the said services would be likely to cause confusion to the relevant public and damage Ritz-Carlton’s interests. The court, however, did not grant protection against other services (insurance; capital investment; art valuation; agency; guarantee; raise charitable funds; entrusted management; pawn shop) under the Disputed Mark. In the YAHOO! case, the court granted cross-class protection on the intellectual property supervision service based on Yahoo!’s arguments that, in the Internet industry, intellectual property supervision was closely related to Yahoo!’s well-known search engine related services and serves similar consumers.

Finally, the evidence we submitted on behalf of our clients during the administrative litigation proceedings was key in obtaining the well-known mark recognition. Generally, courts do not always admit new evidence in administrative litigation. In the RITZ-CARLTON case, the CNIPA and the courts have different views as to whether the “RITZ-CARLTON” mark could be recognized as a well-known mark. The difference lies in the admissibility of the large amount of new evidence submitted during the court proceeding. We collected and submitted copies of various evidence found through the National Library, the Shanghai Library, the China Tourism News, the People’s Daily, Xinhua Net, CNKI and other media as corroborative evidence. Meanwhile, we further submitted the notarized documents as corroborative evidence to satisfy the formality requirement. The courts affirmed that the new evidence is to strengthen the evidence submitted during the CNIPA proceeding, in which Ritz-Carlton submitted substantial evidence to support its arguments. If not admitted, Ritz-Carlton’s rights would be severely damaged. Especially under the circumstance that when comprehensively consider all evidence submitted, the cited mark can be recognized as a well-known mark, not admitting the supplemental evidence would be unjustified.

As you may have guessed, evidence collection is an important phase in obtaining well-known mark recognition. Next, we will share different cases to further elaborate how to best collect evidence for a well-known mark.

Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Well-Known Mark Recognitions in China – Part II

by Yan Zhang, Feifei Bian & Austin Chang

Previously, we shared our insights on how to secure well-known mark recognitions in China and its benefits. In the next few articles, we will be sharing cases with analysis on how the courts apply well-known mark recognitions to various facts.

1. “Cisco in Chinese” v. “SIKE and SI KE in Chinese”

Foshan City Shunde District Lunjiao Junze Electrical Appliance Factory (“Lunjiao”) applied for the Disputed Mark No. 13618667 on November 27, 2013 and was approved for registration on November 28, 2016 in Class 11 for “electric cooker; electric kettle; electric water heater; electric yogurt maker; electric pressure cooker (pressure cooker); gas stove; gas water heater.” Cisco applied for the Cited Mark No. 3999024 on April 6, 2004 and was approved for registration on September 7, 2006 in Class 9 for “network communication equipment; telephone; etc.”

Disputed Mark	Cited Mark

Cisco filed an invalidation request on February 27, 2017 before the CNIPA. The CNIPA affirmed the Disputed Mark’s validity. Cisco appealed the decision to the Beijing IP Court. On May 24, 2019, the Beijing IP Court reversed the CNIPA’s decision and ordered the CNIPA to re-render its decision based on the Beijing IP Court’s decision.

In its decision, the Beijing IP Court found that the evidence submitted by Cisco is sufficient to prove the well-known mark status of “CISCO in Chinese (思科)” on “network communication equipment” in Class 9 prior to the application date of the Disputed Mark. Further, the Beijing IP Court found that the Disputed Mark’s specific composition combining “SIKE” and “SI KE in Chinese (思科)” copied and imitated Cisco’s well-known mark. The Disputed Mark’s approved goods for “electric cooker; electric water heater; etc.” were common household consumer goods that were likely to attract relevant consumers who were attracted to the Cited Mark’s approved goods. Meanwhile, Lunjiao failed to provide reasonable explanations regarding the idea that shaped the Disputed Mark’s creation. Cisco’s evidence also showed that in addition to the Disputed Mark, Lunjiao applied for six other trademarks, one identical to the Disputed Mark and five “3M” marks, which inevitably suggested the likelihood of Lunjiao’s bad faith intention in free riding other’s goodwill. Similarly, the Disputed Mark’s relevant consumers were likely to associate Cisco’s well-known mark “Cisco in Chinese (思科)” upon seeing the identical Chinese characters used in the Disputed Mark. The Disputed Mark may also dilute the well-established corresponding relationship between Cisco and its well-known mark “Cisco in Chinese (思科),” impaire the distinctiveness of Cisco’s well-known mark, and damage Cisco’s well-known trademark rights.

2. “McFlurry in Chinese” v. “MAI XUAN FENG in Chinese”

China Top Foods Co., Limited (“Top Foods”) applied for the Disputed Mark No. 12049136 on January 15, 2013 and was approved for registration on November 28, 2015 in Class 35 for “advertisement promotion; advertising design; commercial management of franchising; marketing for others; personnel management consulting; business enterprise migration; compiling information into computer databases; accounting; vending machine rental; seeking sponsorship.” McDonald’s applied for the Cited Mark 1 No. 1646857 in Class 29 for “meat products; pork products” and Cited Mark 2 No. 8666342 in Class 30 for “ice cream, etc.” prior to the Disputed Mark’s application date.

Disputed Mark	Cited Mark 1	Cited Mark 2

McDonald’s filed an invalidation request on August 19, 2016 before the CNIPA. The CNIPA affirmed the Disputed Mark’s validity. McDonald’s appealed the decision to the Beijing IP Court. On August 1, 2019 the Beijing IP Court reversed the CNIPA’s decision and ordered the CNIPA to re-render its decision based on the Beijing IP Court’s decision.

In its decision, the Beijing IP Court found that the Cited Mark 1 and Cited Mark 2 (“Cited Marks”) could be recognized as well-known marks based on the evidence McDonald’s submitted. The evidence showed that prior to the Disputed Mark’s application date, McDonald’s carried out long-term, extensive, and numerous promotions for the Cited Marks “McFlurry in Chinese (麦旋风)” on milk products, ice cream, etc. in mainland China. The Chinese characters used in the Disputed Mark were identical to the Cited Mark 2. The only undiscernible difference between the Disputed Mark and the Cited Mark 1 was that the Disputed Mark used traditional Chinese and the Cited Mark 1 used simplified Chinese. Based on foregoing reasons, the Disputed Mark copied the Cited Marks. Moreover, because the Cited Marks had strong distinctiveness with high fame, even if the approved services “advertisement promotion, etc.” under the Disputed Mark were unrelated to the approved goods “milk” and “ice cream” under the Cited Marks, the relevant consumer would inevitably associate McDonald’s and its well-known marks upon seeing the Disputed Mark. Such association would damage the well-established correspondence between McDonald’s and the Cited Marks, decrease the distinctiveness of McDonald’s well-known mark, and damage McDonald’s interests.

3. Beijing East IP analysis and comments

The standard applied for well-known mark protection can be found in Article 9(2) of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Involving Well-Known Trademark Protection (“SPC Interpretation”) which states that associations that are capable of confusing the relevant public to believe that the accused trademark has a considerable degree of association with a well-known mark, thereby weakening the distinctiveness of that well-known mark, derogating the market reputation of that well-known mark, or improperly using the market reputation of that well-known mark. This standard shall be consistently applied across administrative and civil trademark litigations. The SPC Interpretation established that, instead of likelihood of confusion, courts shall focus on impairing a well-known mark’s distinctiveness, harming a well-known mark’s reputation, or improperly using a well-known mark’s market reputation when finding damage for a well-known mark. Such approach is aimed at protecting a well-known mark’s distinctiveness from impairment and preventing harm from the one-to-one association established between a well-known mark and its particular goods and services.

In judicial practice, when determining the scope of protection for a well-known mark, courts should comprehensively consider the well-known mark’s distinctiveness, fame, similarity between the marks, actual use of the approved goods, degree of overlapped relevant consumers and their attentions, and the subjective state of mind of the disputed mark’s applicant.

The Cisco and the McFlurry cases reflect how well-known mark protection extends the scope of protection in administrative trademark litigations to not only eliminate potential likelihood of confusion but also prevent well-known mark from dilution.

In this Cisco case, the disputed mark’s approved goods “electric stove; electric water heater, etc.” are common consumer goods that face a wide range of relevant public, which overlaps with the targeted consumer of Cisco’s approved goods “network communication equipment.” Considering Cisco’s cited mark “CISCO in Chinese (思科)” has strong distinctiveness and has established a close association with Cisco through long-term promotion and use. In recognizing Cisco’s cited mark as a well-known mark and granting cross-class protection, the court considered whether the disputed mark would break the one-to-one association and the well-established connection between Cisco’s famous network communication equipment and its cited mark, and whether the disputed mark would impair the cited mark’s distinctiveness. Similarly, in the McFlurry case, although the approved goods “advertisement promotion” for the disputed mark are not necessarily related to the approved goods “milk” and “ice cream” for the cited mark, the court applied the dilution principle when recognizing McDonald’s cited marks as well-known because of its relative high fame and granted the cited marks with additional protections. In other words, the scope of protection of a well-known mark shall match its degree of fame, namely, potentially expand its scope of protection.

Moreover, the subjective state of mind of the disputed mark’s applicant is also an important factor. In the Cisco case, Lunjiao failed to provide reasonable sources of its idea in creating the disputed mark. Together with the five “3M” marks Lunjiao applied, its bad faith in free riding other’s fame can hardly be ignored. In the McFlurry case, Top Foods applied “M MACCAS” marks in many Classes and its only shareholder applied for “Man Ji in Chinese (满记) (A famous desserts shop from Hong Kong),” “HILTON,” “Xin Zhou Kan in Chinese (新周刊) (A famous magazine in China), etc.” These trademark filings suggest bad faith in copying and imitating other’s highly famous trademarks.

Finally, when considering whether a mark shall be recognized as well-known, judicial and administrative authorities usually refer to Article 14 of the Trademark Law. Additionally, financial statistics are proven to be important supporting evidence for well-known mark recognition such as sales numbers, tax, audit report, etc. Foreign entities, however, may have difficulties in providing such information as supporting evidence. In helping our clients tackle such a challenge, we devote crucial time and efforts to find evidence from all angles and connect each piece of evidence found into a complete evidence chain. In building such evidence chain, we strive to find essential data and locate critical evidence five years prior to the disputed mark’s application date. Under the circumstances that the clients were unable to provide its sales number and market share data in China directly to us, we parsed through targeted online and offline media that reported the sales number and market share data in China, combining with rankings from authoritative magazines such as Fortune and Businessweek, published annual reports, and awards received to persuade the courts to recognize the well-known mark.

Next, we will continue to share different cases to showcase how well-known mark protection is done in China.

Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

E-commerce Law and E-commerce Intellectual Property Protection Forum, which was sponsored by Beijing Municipal Intellectual Property Office and Beijing Higher People’s Court, and hosted by Beijing Intellectual Property Protection Association and the Intellectual Property Protection Alliance of E-Commerce, was successfully held on September 12, 2019 in Beijing.

Appointed Translators: Jason WANG / Austin CHANG, Beijing East IP Law Firm
Author: Baoqing ZANG, Trademark Review and Adjudication Board (TRAB)
Original Chinese text: China Industry and Commerce Newspaper June 21, 2016

On February 28, the Beijing IP Court (“IP Court”) issued a decision in Qilu Pharmaceutical v. the PRB ((2017)京73行初字No. 5365), which reversed a ruling by the Patent Reexamination Board (“PRB”) that upholds the validity of Patent No. 200910176994.1 (the “’994 patent”) owned by Beijing Sihuan Pharmaceutical (“Sihuan”). The IP Court holds that the inauthentic experimental data presented in the original description result in the failure to satisfy the enablement requirement.

China has three types of patents, i.e., invention, utility model, and design. The utility model patent does not have the counterpart in some other jurisdictions such as the USA, so some essential aspects of the utility model patent will be introduced below for better understanding of it.

On December 20, 2017, in the Patent Reexamination Board of SIPO (PRB) v. Beijing Winsunny Harmony Science & Technology Co., Ltd. ((2016)最高法行再41号), the Supreme Court held that a Markush claim, when drawn to a class of chemical compounds, should be interpreted as a set of Markush elements rather than a set of independent specific compounds. The present case is a petition for retrial filed by the PRB, requesting the Supreme Court to review the second-instance decision made by the Beijing High People’s Court (“High Court”). In reversing the PRB’s decision in the invalidation proceedings instituted by Beijing Winsunny Harmony Science & Technology Co., Ltd. (“Winsunny”), the High Court recognized a Markush claim as claiming a set of parallel technical solutions. 

Abstract: Currently “common knowledge” has become a hot topic in academic research. How to correctly determine common knowledge has become the key to improve the quality of patent examination. This paper introduces the availability bias theory to point out that the common knowledge determining process tends to produce availability bias, give too much weight to the easily conceived technical knowledge, and turn a blind eye to a lot of other information that must be considered, leading to errors in determining common knowledge. In patent examination, the availability of parts, the availability of work methods and the availability of technical problems may lead to the availability bias. In the end, the countermeasures is put forward.

Just at the beginning of this year, the Patent Reexamination Board (PRB) of SIPO issued a decision in a notable patent invalidation trial against Novartis’s patent on Entresto (Sacubitril/Valsartan), holding all the claims of the patent invalid as being obvious.