China: Beijing Higher People's Court - Several Legal Problems Needing Attention In The Current IP Hearing (Trademark Related)

Last Updated: 25 January 2017
Article by Xudong Zhang

1. Several problems in administrative cases involving trademark authorization and verification

(1) Regarding interpretation on the coverage of "agent" in Article 15

The extended interpretation of "agent or representative" and the act of rushing to register other's trademark shall be regulated.

(2) Regarding the protection of well-known trademarks

The protection scope of well-known trademarks shall be determined in accordance with Article 9 of Supreme Court's Interpretation on Several Problems Concerning Law Application of Civil Disputes Involving Well-Known Trademark Protection. For the already registered well-known trademarks, their protection shall not be limited to the confusion of commodity source. Instead, the protection shall be expanded to prevent the well-known trademark being diluted. For Trademark Review and Adjudication Board's (TRAB) determination of a well-known trademark's protection scope only through confusion standard, while the trial hearing shows that "dilution" standard is needed to expand the protection scope of the trademark, TRAB shall be sentenced to correct its decision.

(3) Regarding the confusion possibility of similar goods and similar trademarks

Paragraph 2, Article 57 of Trademark Law provides that using a trademark that is similar to a registered trademark in connection with the same goods, or that is identical with or similar to a registered trademark in connection with the same or similar goods, without the authorization of the owner of the registered trademark, which may cause public confusion, constitutes an infringement of the exclusive right to use a registered trademark. Therefore, apart from using the same trademark on the same goods, infringement caused by using on other similar goods or using of similar trademarks shall meet the confusion possibility requirement. Though Article 37 does not distinguish on the same goods, same trademark, similar goods and similar trademark like Paragraph 1 and Paragraph 2 of Article 57 does, it is self-evident that provisions on the same problem in the same law shall be consistent. 

Therefore, when cited trademark and disputed trademark are similar trademarks, or the goods designated by the two are similar, the determination of whether the disputed trademark could be allowed to be registered shall take the possibility of confusion into consideration. Moreover, as similar goods, similar trademarks and confusion possibility are provided in parallel, in the determination of similar goods and similar trademarks, the possibility of confusion is not regarded as the standard for deciding similarity, which, instead, should be decided based on the goods and the trademarks themselves.

When deciding similarity based on the attributes of goods, Similar Goods and Service Distinction Table is an important reference. The result of the Table shall be respected as much as possible, unless there exists opposite evidence. When an individual case is seen as an exception of the Table, the decision shall be made carefully based on ample evidence and detailed analysis. Of course, for confusions caused by similar logos or other factors, the disputed trademark involved shall not be registered as well.

(4) Regarding the commercial interests protection of figures

There has been huge controversy over the protection objects and protection scope of commercial interests of figures both in academic filed and in actual practice. Therefore, it should be prudent to protect such interests as "prior right" as provided in Article 32 of Trademark Law. First, the principle of right of statutory shall be upheld. Second, the protection scope of the commercial interests of figures shall be decided after careful study and rigid limitation. Unless necessary, the protection of such interests shall not go beyond that of the unregistered well-known trademark. If a court seeks to protect such interests, it shall report the issue level by level to the 3rd Civil Division of Beijing Higher People's Court for examination and approval.

(5) Regarding the examination of trademarks that have not been used three consecutive years, the following principles shall be followed:

a) In proof acceptance, the principle of evidence of preponderance shall be held and no hush standards shall be applied. As long as evidence could reveal that the designated goods using the registered trademark have been obtained by relevant consumers for a certain period of time, and the use of such trademark does not violate any prohibitive provisions of Trademark Law, the trademark shall be deemed as having been publicly, legally and effectively in use.

b) Severe punishment against falsification of evidence. If part of the evidence submitted by the TM registrant is falsified, all the evidence shall go through strict scrutiny, and the standard of proof shall be raised. The act of falsification shall be punished as a warning to others. 

c) As for the scope of goods for a registered TM, the long standing standard shall be stick to. That is, only use on designated goods shall be deemed as use of the registered TM. 

2. Several problems in civil cases concerning TM

(1) Regarding the effect of unapproved assignment contract of TM

Article 43 of Trademark Law provides: "The assignment of a registered trademark shall be published after it has been approved. The assignee shall enjoy exclusive right to use the mark starting from the date of publication". In accordance with the above provision, when unapproved TM assignment contract comes into effect as of the date of signature or seal by both parties, if the assigner fails to get the contract approved and published, the assignee could not obtain the exclusive right to use the trademark based on this contract, but could hold the assigner responsible for liability for breach of contract.

(2) Regarding whether parallel import constitutes infringement on trademark

If the accused infringing goods originates from trademark owner or its authorized entity, the trademark owner has gained the commercial interests of the trademark from the "first" sale, thereby should not prevent others to sell or market the goods through for the "second" time. Or else, the owner will obstruct the market course established through normal free competition. Therefore, parallel competition shall be accepted by justice and shall not be deemed as infringing on trademark right.

(3) Regarding the impact of trademark's nonuse on the outcome of civil cases involving trademark

In civil cases involving TM, the nonuse of a registered trademark will not affect the determination of infringement, but only factors in deciding the amount of compensation.

(4) Regarding the applicable conditions for defense of prior use of TM

Paragraph 3, Article 59 of Trademark Law provides that defense for prior use shall meet the following requirements: a) the prior user used the trademark in good faith; b) the date of the use of specific mark by the prior user shall be earlier than the application date of the trademark involved, and shall be earlier than the trademark owner's date of using; c) the trademark used by the prior user shall have "certain influence". As for the popularity, or influence, of the trademark, no hush standards will be applied. That is, as long as the prior user indeed used the trademark, and such use has already made the trademark gain certain recognition in the using area, then the standard of "certain influence" is met.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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