China: Protection For Prior Copyright In Trademark Disputes

I. PRIOR COPYRIGHT: AN IMPORTANT ASPECT WITH VARIOUS ADVANTAGES TO CLAIM AGAINST THE TRADEMARK AT DISPUTE

1. An important aspect to claim prior rights

In the recent practice, the famous carmaker Tesla Motors, Inc. filed two civil lawsuits in China in September 2013 before Beijing Third Intermediate Court, against ZHAN Bao Sheng. ZHAN is the registrant of the disputed trademark of the "TESLA TESLA MOTORS and T Design" in China, where Tesla Motors, Inc. has filed disputed cancellations before the Trademark Review and Adjudication Board (TRAB) as well. In one of the civil lawsuits, Tesla Motors, Inc. claimed its prior copyright of the "T Design." According to the news report, all the trademark disputes and copyright disputes between Tesla Motors, Inc. and ZHAN have already been settled before Beijing Third Intermediate Court in August 2014.¹In addition, in the successful disputed cancellations against the disputed trademarks before the TRAB, Tesla Motors, Inc. should have also claimed its prior copyright. Undoubtedly, the claim of prior copyright has become one of the key factors and weapons for Tesla Motors, Inc. to successfully clear its major trademark obstacles to the entry of huge China market.

In fact, according to the Chinese Trademark Law and other regulations as well as practice in China, prior copyright may be a very important aspect to claim against the trademark at dispute in the trademark disputes. Quite a large portion of trademark disputes involves the claim of prior copyright.

With respect to the laws and regulations, the first part of Article 32 of the Chinese Trademark Law 2013 (Article 31 of the Chinese Trademark Law 2001) prescribes as follows: "An trademark application for registration shall not create any prejudice to the existing prior right of another person."The Trademark Adjudication Standard promulgated jointly by the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) in 2005 has expressly prescribed that the "exiting prior right" includes the copyright, in addition to trade name, design patent, right of name, right of portrait, etc. acquired prior to the application date of the trademark at dispute. In addition, Rule 17 of the Supreme Court Opinions regarding Administrative Cases of Trademark Rights Granting and Determination (Fa Fa 〔2010〕12) prescribes as follows: "The summarizing provision of Article 31 of the Chinese Trademark Law 2001, namely, an trademark application for registration shall not create any prejudice to the existing prior right of another person, shall be correctly understood and applied. When examining and determining whether the disputed trademark creates any prejudice to the prior right of another person, the court shall protect the prior rights which are specifically provided under the Chinese Trademark Law pursuant to the specific provisions thereof. Where the Chinese Trademark Law is silent, the legitimate right to be protected pursuant to the General Principles of Chinese Civil Law and other laws and regulations shall be protected pursuant to this summarizing provision. "

In Tianjin Yi Hong Science and Technology Services Co., Ltd. vs. China ICBC Co., Ltd. vs. the TRAB case regarding the "ICBC Design," the Supreme Court held in 2012 that if the subject meets the requirements of both the Chinese Trademark Law and the Chinese Copyright Law, such subject may be protected by both laws. ²

2. Automatic protection without registration

Article 2 of the Chinese Copyright Law prescribes as follows: "Work of Chinese citizens, legal persons or entities without legal personality, whether published or not, shall enjoy copyright in accordance with this Law." Furthermore, Rule 6 of Implementing Regulations for the Chinese Copyright Law prescribes as follows: "The copyright comes into being on the date of the completion of the work."

Based on the above laws as well as the practice in China, the protection of copyrighted work is not preconditioned on registration. And the protection of copyrighted work is protected if evidence may establish that the work has been created or published prior to the application date of the trademark at dispute, and the law does not compulsorily require whether it has been registered or not.

Compared with the trademark, the copyright has the advantage of being granted for automatic protection without registration, and such automatic protection is based on creation or publication, not necessarily based on registration. Even if the work has not gone through the registration procedure with the relevant authorities or organizations, it is still possible to prove its ownership and rights through evidence regarding creation or publication of the work. Of course, although the copyright protection is based on creation or publication of the work, not necessarily based on registration, the registration of copyrighted work will definitely facilitate the evidence establishment proving the copyright ownership, which may serve as prima facie evidence.

3. Automatic protection for cross-jurisdiction

Article 2 of the Chinese Copyright Law prescribes as follows: "Work of foreigners first published in the territory of China shall enjoy copyright in accordance with this Law. Any work of a foreigner published outside the territory of China which is eligible to enjoy copyright under an agreement concluded between the country to which the foreigner belongs and China, or under an international treaty to which both countries are parties, shall be protected in accordance with this Law."

According to the Chinese Copyright Law as well as the Berne Convention, work published either in China or U.S. or any other contracting members of the Berne Convention will be automatically protected. Obviously, the characteristic of cross-jurisdiction for the copyrighted work is an advantage for the rights owner, compared with the trademark which is greatly limited to jurisdiction.

4. Strong protection for cross-Class

The protection of prior copyright breaks through the limitation imposed by the Classification of Similar Goods and Services promulgated by the CTMO based on the Nice Classification. Theoretically speaking, cross-Class protection granted to the copyrighted work may be extended to all the 45 Classes, which is even broader than the protection scope of the well-known trademark. In addition, Chinese authorities (the CTMO, the TRAB, and the courts) impose very strict requirements on the well-known trademark recognition, and the trademark right owners bear a very heavy burden of proof to establish that their trademarks have achieved the well-known status in China.

Of course, protection for prior copyright in trademark dispute cases is a controversial topic both academically and in legal practice. But currently, the prevailing view and practice in China is that the copyright protection may be granted for cross-Class protection with little limitation. Compared with the well-known trademark, the claim of prior copyright seems more helpful to protect the owner's rights and more feasible to crack down on the bad faith trademark filing.

II. KEY ISSUES AND FACTORS TO BE CONSIDERED

In the Ritz-Carlton Hotel Company, L.L.C. vs. Shi Shi City Bao Hu Nan Hua Daily Necessities Store vs. the TRAB case regarding the "Lion and Crown Design," both Beijing First Intermediate Court (the first instance court) and Beijing High Court (the second instance court) reversed the TRAB decision, and the courts recognized that the Ritz-Carlton Hotel Company, L.L.C. owned prior copyright on its "Lion and Crown Design," and thus the application of the disputed trademark violated Article 31 of the Chinese Trademark Law 2001(Article 32 of the Chinese Trademark Law 2013).³ This case may be very typical to reflect the usual way how the courts recognize the prior copyrighted work and to reflect factors the courts take into consideration, to grant protection for prior copyright in the trademark dispute cases. Specifically, Beijing First Intermediate Court held that the following conditions should be met when determining the infringement upon the prior copyright:

1. The subject matter claiming for copyright protection should be the copyrighted work in the sense of the Chinese Copyright Law;
2. The copyrighted work is still in the period of protection;
3. The applicant or registrant of the disputed trademark has the possibility of having access to the copyrighted work;
4. The disputed trademark constitutes substantially similar to the copyrighted work;
5. The creation of the copyrighted work is prior to the application date of the disputed trademark.

Based on the facts ascertained, the court held as follows:

As for the CTMO and TRAB, the practice and rules are similar to the courts. Rule 3.2 (Application Requirements) of the Trademark Adjudication Standard prescribes as follows:

1. The trademark at dispute is identical or substantially similar to the prior copyrighted work.
2. The applicant/registrant of the trademark at dispute had access or has the possibility of having access to the copyrighted work owned by others.
3. The application for registration of the trademark at dispute is not authorized by the copyright owner.

Based on the above regulations and the practice in China, the key issues related to the prior copyright protection in the disputes concerning design trademarks may be as follows:

1. Originality standard of recognizing a sign as the copyrighted work;
2. Evidence proving the ownership including prior creation date and/or publication date of the copyrighted work;
3. Similarity between the copyrighted work and the trademark at dispute;
4. Evidence proving the applicant/registrant of the trademark at dispute has the possibility of having access to the copyrighted work.

The later section of this article will analyze the four key issues separately.

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Footnotes

1 http://tech.sina.com.cn/it/2014-08-05/14449536442.shtml

2 the Supreme People's Court Administrative Order (2012) Zhi Xing Zi No. 60

3 Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 3223, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 595

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