China: (Trademark) Protection For Prior Copyright In Trademark Disputes

Last Updated: 29 January 2015
Article by Jason Wang and Yan Zhang

As prescribed in the Chinese Trademark Law, application for registration of a trademark shall not create any prejudice to another person's prior right, which includes prior copyright. Prior copyright is considered as an important aspect in trademark disputes with various advantages to claim against the disputed trademark, such as automatic protection without registration, cross-jurisdiction protection and cross-Class protection. Regarding protection for prior copyright in trademark disputes, the recognition of a sign as copyrighted work relies on the determination of its originality as prescribed in the Chinese Copyright Law; the identification of infringement upon prior copyright by the disputed trademark generally adopts the principle of substantial similarity and accessibility.

1. Prior copyright: an important aspect in trademark disputes

Recently, the trademark dispute between the famous automaker Tesla Motors, Inc. and Baosheng ZHAN, the registrant of the disputed trademark "TESLA TESLA MOTORS and T Design" in China, has attracted much attention and extensive discussion. According to the latest media coverage dated August 2014, Tesla Motors, Inc. and ZHAN have reached a settlement agreement before Beijing Third Intermediate Court, settling in package all their disputes in relation to trademark, domain name and copyright.1 It is commonly believed in the industry that Tesla Motors, Inc. has taken full advantage of the critical weapon of prior copyright in this trademark dispute, which has aroused public awareness of the importance of prior copyright in trademark disputes again.

In fact, according to the Chinese Trademark Law and other regulations as well as judicial practice in China, prior copyright has always been a very important aspect to claim and one of the major disputed issues in the trademark disputes. The first half part of Article 32 of the Chinese Trademark Law 2013 (Article 31 of the Chinese Trademark Law 2001) prescribes as follows: "A 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 CTMO and the TRAB in 2005 expressly prescribes that the "prior right" includes the copyright. In addition, Rule 17 of the Supreme Court Opinions regarding Administrative Cases of Trademark Rights Granting and Determination (Fa Fa201012) prescribes: "Even if the Chinese Trademark Law does not provide special regulations on prejudice to the existing prior right of another person, while it falls under the legitimate rights entitled for protection according to the General Principles of Chinese Civil Law and regulations under the other laws, it shall be protected pursuant to such 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

In addition, copyright has various advantages in contrast to trademark right, such as automatic protection without registration, cross-jurisdiction protection and cross-Class protection.

  1. Automatic protection without registration.Paragraph 1 of Article 2 of the Chinese Copyright Law prescribes as follows: "Work of Chinese citizens, legal persons or other organizations, whether published or not, shall enjoy copyright in accordance with this Law." Rule 6 and Rule 7 of the Implementing Regulations for the Chinese Copyright Law prescribe as follows: "The copyright comes into being on the date of the completion of the work." Furthermore, Paragraph 3 of Article 2 of the Chinese Copyright Law prescribes: "Work of foreigners or stateless persons first published in the territory of China shall enjoy copyright; the term of protection for such right shall commence as of the date of the first publication of the work."Based on the above laws, the granting of copyright is not preconditioned on registration; and the copyrighted work is protected once evidence may establish that the work has been completed or published prior to the application date of the disputed trademark, and the law does not compulsorily require the work to go through the copyright registration. Copyright is automatically granted upon completion or publication of work, no registration is required. Even if the work has not gone through the registration procedure with the relevant authorities, the copyright ownership thereof is still possible to be proved through evidence regarding creation or publication of the work.
  2. Cross-jurisdiction protection.Paragraphs 2 and 3, Article 2 of the Chinese Copyright Law prescribe as follows: "Work of a foreigner or a stateless person published outside the territory of China shall enjoy copyright under an agreement concluded between China and the country to which the foreigner or stateless person belongs or which is his habitual residence, or under an international treaty to which both countries are parties; such right shall be protected in accordance with this Law. Work of a foreigner or a stateless person first published in the territory of China shall enjoy copyright in accordance with this Law." According tothe Chinese Copyright Law as well as the Berne Convention, work published either in China or any other contracting members of the Berne Convention will be automatically protected. Obviously, copyright has the advantage of cross-jurisdiction protection in contrast to trademark right that is strictly limited to jurisdiction.
  3. Cross-Class protection.In practice, prior copyright enjoys cross-Class protection, breaking through the limitation imposed by the Classification of Similar Goods and Services promulgated by the CTMO based on the Nice Classification. Relevant Chinese authorities (the CTMO, the TRAB, and the courts) impose very strict requirements on the well-known trademark recognition, and the trademark right owners accordingly bear a very heavy and complex burden of proof to establish that their trademarks have achieved the well-known status in China. Therefore, prior copyright is a different way and shortcut to seek cross-Class protection. Theoretically speaking, the protection scope of copyright may cover all goods and services under 45 Classes, which is even broader than that of the well-known trademark. That is also the reason why there have been great controversy and extensive discussion over the cross-Class protection scope of prior copyright both academically and in legal practice, failing to reach a completely unified conclusion or consensus.

2. Prior copyright: factors to be considered in legal protection

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 recognized that the Ritz-Carlton Hotel Company, L.L.C. owned prior copyright on its "Lion and Crown Design."3 This case reflects the factors the courts take into consideration to determine and grant protection for prior copyright in the trademark disputes. 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 copyrighted work in the sense of the Chinese Copyright Law; (2) The copyrighted work still falls 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 completion date of the copyrighted work is prior to the application date of the disputed trademark. Based on the facts ascertained, the court held as follows: First, the "Lion and Crown Design" claimed by the Ritz-Carlton Hotel Company, L.L.C. is an artistic expression of lion head, which is original and capable of being reproduced, thus falling under scope of work under the Chinese Copyright Law. Meanwhile, such work still falls in the period of protection. Second, prior to the application date of the disputed trademark, trademarks containing the copyrighted work have been approved for registration and published in other countries and regions. In the absence of evidence to the contrary, it is reasonable to presume that the registrant of the disputed trademark may have access to such copyrighted work. Third, the design part contained in the disputed trademark is identical with the copyrighted work owned by the Ritz-Carlton Hotel Company, L.L.C., and the completion date of which is earlier than the application date of the disputed trademark. In consideration of the above, the court held that the application of the opposed trademark has infringed upon the prior copyright of Ritz-Carlton Hotel Company, L.L.C.

Section 3 "Adjudication Standard of Prejudice to Existing Prior Right of Another Person" of the Trademark Adjudication Standardpromulgated jointly by the CTMO and the TRAB in 2005 prescribes as follows: The application requirements for the provision that an application for registration of a trademark shall not crate any prejudice to the existing prior right of another person under the Chinese Trademark Law are: (1) The disputed trademark is identical with or substantially similar to the prior copyrighted work; (2) The applicant/registrant of the disputed trademark had access or has the possibility of having access to the copyrighted work owned by another person; (3) The application for registration of the disputed trademark has not been authorized by the copyright owner.

Based on the above regulations and judicial practice in China, at least three issues as follows are involved in the protection for prior copyright in trademark disputes: (1) Originality standard of recognizing a sign as a copyrighted work; (2) Evidence proving the ownership of the copyrighted work; (3) Principle of substantial similarity and accessibility identifying the infringement upon prior copyright by the disputed trademark. The latter section of this article will analyze the issues on originality standard of the work and the principal of substantial similarity and accessibility separately.

3. Originality standard of recognizing a sign as copyrighted work

Rule 21 of Beijing High Court Guidelinesfor Trial of Administrative Cases concerningTrademark Right Granting and Determination promulgated in January 2014 prescribe as follows: "It shall be determined in accordance with theChinese Copyright Law, on whether a trademark sign constitutes a work." Rule 2 of the Implementing Regulations for the Chinese Copyright Law prescribes as follows: The term "work" prescribed in the Law shall refer to intellectual creations in the literary, artistic and scientific domains, insofar as they are original and capable of being reproduced in certain tangible form. Therefore, the key issue to recognize a sign as a copyrighted work is the originality. Below are some of the typical cases.

In Sanyo Electronic Co. Ltd. vs. Chengdu Ling Linto Industrial Co., Ltd. vs. the TRAB case regarding the "SANYO and N Design," Beijing First Intermediate Court reversed the TRAB decision, and held that the "N Design" contained in the cited prior trademark "SANYO and N Design" shall be protected as work of art.4

In Japan Tobacco Inc. vs. WAN Jin Gang vs. the TRAB case regarding the "CAMEL (stylized)," Beijing First Intermediate Court did not recognize the originality of the "CAMEL (stylized)." But Beijing High Court held the view that: There is no evidence proving that the "CAMEL (stylized)" is in block letters; and those English letters have distinctive characteristics which are arranged in the form of an arch. Therefore, in the absence of evidence to the contrary, it is reasonable to recognize the originality of the "CAMEL (stylized)."5

In Foshan City Shunde District Ming Bang Chemical Industrial Co., Ltd. vs. Bridgestone Corporation vs. the TRAB case regarding the "B Design," the TRAB, Beijing First Intermediate Court and Beijing High Court all held that the "B Design" has certain originality and is copyrighted work. In addition, Beijing High Court held the view that: It is not necessary for the work to have high originality. It should be protectable as a work under the Chinese Copyright Law as long as the distinctive characteristics it bears are not too subtle to be noted. The "B Design," the work claiming copyright in this case, with unique shape, is an intellectual creation. It is also different from block letters, bearing distinctive characteristics alien from common expression.6

In Ningbo Fu Jia Electron Electrical Appliances Co., Ltd. vs. Ningbo Fu Da Share Stock Co., Ltd. vs. the TRAB case regarding the "FJ Design," the TRAB and Beijing High Court both held the view that the design involved is composed of deformed English letters "FJ" which are the initials of pinyin of "FU JIA in Chinese." It is original and is an aesthetic two-dimensional work of art constituted by lines, colors, and other forms.7

In Shantou City Longhu District Jin He Food Industry Co., Ltd. vs. Friesland Brands B.V. vs. the TRAB case regarding the "Kievit and Bird Design," the TRAB, Beijing First Intermediate Court, and Beijing High Court all held that the design of kiwi bird is the depicture of the bird species in nature, and the design of kiwi bird has established its originality despite of the simple technique of expression thereof.8

In Wenzhou Tian Shi Electronic Appliance Co., Ltd. vs. Sollatek (U.K.) Limited vs. the TRAB case regarding the "Sollatek (stylized)," both Beijing First Intermediate Court and Beijing High Court reversed the TRAB decision, and held that "Sollatek" in handwriting is only constituted by eights English letters, the expression technique of which is not different from the commonly used handwriting. The enlarged initial letter and the whole word in italics are also consistent with common handwriting habits. The distinctive characteristics of "Sollatedk" shaped by handwriting are too subtle to be noted.9

In Shiseido Co., Ltd. vs. HONG Wei Hong vs. the TRAB case regarding the "ettusais and ettusais in Chinese (handwriting)," Beijing First Intermediate Court held that the difference between each English letter of "ettusais" and that in common used handwriting is hardly to perceive, and each Chinese character of "ettusais in Chinese (艾杜紗)" is also common in Chinese handwriting, and the combination of the Chinese characters and English letters of the subject sign is arranged of words flowing from left to right in parallel, without presenting any difference in its overall shape from the existing arrangements of letters and characters. Therefore, the subject sign does not create visual impression different from that of the previous works. Even if the subject sign is identified different from the existing expression of Chinese characters and English letters, obviously, the difference is too subtle to be regarded as originality required by work or art.10

In the "és (stylized)" and "Wei Long in Chinese and Wei Long (stylized)" case, the TRAB and the courts all held the signs do not constitute the copyrighted works.11

4. Principle of substantial similarity and accessibility identifying the infringement upon prior copyright by the disputed trademark

The principle of substantial similarity and accessibility is generally adopted when deciding whether prior copyright is infringed upon. Namely, whether the disputed trademark is substantially similar to the copyrighted work, and whether the holder of the disputed trademark has had access or has the possibility of having access to the prior copyrighted work.

First, one issue is whether the disputed trademark is substantially similar to the copyrighted work. The basic principle is whether the disputed trademark is confusingly similar to the copyrighted work.

In the "ICBC Design" case, the TRAB, Beijing First Intermediate Court and Beijing High Court all held as follows: Both two signs are designs depictured by black lines, presenting in terms of overall visual effect an outer circle surrounding a figure of the Chinese character "工" or the English letter "H" hollowed out. While being the major difference between two designs, the "工" and "H" are sharing the same style and strokes, and have no substantial difference in respect of the ratio between the character/letter and the circle. Consumers are likely to regard the opposed trademark as the copyrighted work vertically turned. Therefore, the opposed trademark is deemed as substantially similar to the copyrighted work. The Supreme Court as the retrial court affirmed the decisions of Beijing First Intermediate Court and Beijing High Court.12

In the "CHICAGO BULLS and Bulls Design (color designed)" case, Beijing High Court held as follows: Although the opposed trademark contains the characters "Hua Xin in Chinese," the design part occupies the relatively large portion, and such design is extremely similar to the copyrighted work owned by the opponent NBA Properties, Inc. in terms of mode of composition, technique of expression, and overall effect, and has constituted substantially similar to the copyrighted work.13

In the "KP and Mimi Design" case, both Beijing First Intermediate Court and Beijing High Court held that the copyrighted work "Rabbit with Flower Design and KP KIDS' STUFF BY KNITPLANNER" is of high originality; the top of the disputed trademark is a rabbit with a flower between two capitalized letters K and P; the bottom of the disputed trademark is the words "KIDS' STUFF." The disputed trademark constituted substantially similar to the copyrighted work.14

Second, the other issue is whether the holder of the disputed trademark had access or has the possibility of having access to the prior copyrighted work. The possibility of accessibility to the prior copyrighted work may generally be determined through the following aspects.

  1. Originality of the Work.If the copyrighted work is of high originality, the possibility is lower that the owner of the disputed trademark could independently creates the identical or substantially similar work. In the absence of reasonable explanations and/or evidence to the contrary, the court may presume that the holder of the disputed trademark has had access or has the possibility of having access to the copyrighted work.
  2. Long Term Use and Fame of the Work. The actual use of the copyrighted work and the trademark containing such copyrighted work may be used to establish that the applicant/registrant of the disputed trademark has the possibility of having access to such copyrighted work.For example, in theabove-mentioned "ICBC Design" case, both the TRAB and the court held as follows: The ICBC bank logo has been extensively used and has enjoyed high fame among consumers; thus, the opposed party should have known the design.
  3. Business Relationship.Where there is business relationship, such as contract relationship, employment relationship and shareholder relationship, between the owner of the copyright and the applicant/registrant of the disputed trademark, such business relationship may be used to establish that the applicant/registrant of the disputed trademark should have the possibility of having access to such copyrighted work.

Originally published by China Trademark magazine (Issue 10, 2014).

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

[4] Beijing First Intermediate Court Administrative Judgment (2007) Yi Zhong Zhi Xing Chu Zi No. 1115

[5] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 1286, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1782

[6] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 2632, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1652

[7] Beijing First Intermediate Court Administrative Judgment (2006) Yi Zhong Xing Chu Zi No. 465, Beijing High Court Administrative Judgment (2006) Gao Xing Zhong Zi No. 383

[8] Beijing First Intermediate Court Administrative Judgment (2006) Yi Zhong Zhi Xing Chu Zi No. 735, Beijing High Court Administrative Judgment (2007) Gao Xing Zhong Zi No. 179

[9] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 2493, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1048

[10] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 165

[11] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 3026, Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 664, Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Xing Chu Zi No. 2386, Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 546

[12] Beijing First Intermediate Court Administrative Judgment (2011) Yi Zhong Zhi Xing Chu Zi No. 2533, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 219

[13] Beijing First Intermediate Court Administrative Judgment (2011) Yi Zhong Zhi Xing Chu Zi No. 2431, Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 962

[14] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 3488, Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 857

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