China: China Supreme Court First Time Allows Two Nearly Identical Trademarks To Be Co-Existed And Co-Registered On Similar Goods

Last Updated: 9 August 2017
Article by Hairuo Zhang

In two recent trademark administrative cases, Supreme Court of China for the first time recognizes the value of consent letter issued by the cited trademark owner and allowed two nearly identical trademarks to be co-existed and co-registered on similar goods. For future trademark applicants in China, if its trademark application is blocked by a prior identical/similar trademark registration, it could consider to submit consent letter issued by the registrant of the prior mark to overcome the rejection.

I. Case Brief

Google applied to register two NEXUS trademarks on goods of "portable computer and hand-held computer" but were blocked by a cited mark of "NEXUS" on goods of "bicycle computer" owned by Shimano.

Both sides' goods fall into subclass of 0901 in the Chinese version of Nice Classification Table. Google's NEXUS applications are nearly identical to Shimano's "NEXUS" trademark. During the review proceedings before the TRAB, Google obtained consent letter from Shimano, agreeing Google's " NEXUS" marks to be co-existed and co-registered with Shimano's NEXUS trademark.

The TRAB, Beijing IP Court and Beijing Higher Court all find that if allowing nearly identical trademarks owned by different parties to be co-existed and co-registered on similar goods will damage the public interest since consumer confusion is unavoidable. Thus, the TRAB, Beijing IP Court and Beijing Higher Court all rejected the value of the consent letter.

During the retrial, Supreme Court overturned the two lower courts' decisions.

II. Supreme Court Decisions Highlights

Supreme Court has ruled that the two lower courts improperly denied the consent letter issued by Shimano. The TRAB is ordered to re-issue a new Decision, approving Google's two NEXUS applications to be registered. We summarize the reasoning part of the two decisions below.

  1. As for goods similarity, the goods associated with the cited trademark owned by Shimano is "bicycle computer" whereas the goods designated by the two applications are "portable computer and hand-held computer". Although both sides' goods share "computer" in their names, considering that "bicycle computer" is related to bicycle sports while "portable computer and hand-held computer" are consumer electronics products, they differ to some extent in terms of function, usage, sales channel and consumers;
  2. As for the value of the consent letter issued by Shimano, trademark law allows trademark owner to freely dispose its trademark rights through assignment, transfer and abandon, etc. To issue consent letter, allowing a mark which is found to be similar by the TRAB to be co-existed and co-registered is one way to dispose its trade rights, too. As long as that consent letter does not violate the nation's interest, public interests or any third party's interests, the value of that consent letter should be recognized and respected;
  3. Trademark law serves two legislative purposes: i.e., to protect the consumer's interests and to protect and facilitate the interests of manufactures and operators. Both purposes are equally important and should not neglect one over another;
  4. In these two cases at bar, when it comes to the registration and use of the two NEXUS trademarks filed by Google, the impact to the consumers is uncertain as to whether their interests might be damaged or not, whereas the impart to Shimano is more direct and concrete;
  5. Both Google and Shimano are famous enterprises in their field, there is no evidence to show that Google applied to the two subject mark out of bad faith, or evidence to show that it will damage the public interests. In the absence of those direct evidence, it is improper to reject the value of the consent letter based upon the uncertainty of consumer interests; and
  6. In addition to the applied trademarks, Google's house mark and its trade name, as well as its trade dress etc to be used on its goods will further reduce the likelihood of confusion.

Based upon the above, Supreme Court rules that the two subject applications have not violated trademark law, and the decisions rendered by two lower courts and the TRAB are erroneous in application of law and thus should be reversed.

III. Innovative Significance

Before the two Supreme Court decisions noted above, the TRAB and the courts do not allow two nearly identical trademarks to be registered on similar goods based upon consent agreement issued by the cited trademark owner. In the past, the TRAB and China courts only admit the value of consent letter when the applied mark differs from the cited mark to some extent. Even for dissimilar trademarks, in some cases, the TRAB used to deny the value of consent letter if the dissimilarity is too slight due to consideration of public interests.

These two retrial decisions are the first decisions rendered by Supreme Court which allows two nearly identical trademarks to be registered on similar goods. Supreme Court has set precedents in this area and provides key guidance for the adjudication of similar cases involving consent letter in the future.

Originally published February 21 2017

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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