China: Trade Name Right Claims In Trademark Opposition And Invalidation Cases

Last Updated: 2 December 2019
Article by Linda Jiang

Trademark rights and trade name rights fall into different categories, and are regulated by different laws, specifically, trademark rights are intellectual property, while trade name rights are considered commercial personal rights.  When there is conflict between trademarks and trade name rights that have been used prior to the trademark, we must consider how best to protect the trade name right?  

According to the article 32 of Chinese Trademark Law, trademark applications shall not infringe upon another party's existing prior rights.  The existing rights regulated in this article include trade name right, copyright, design patent right, name right, portraiture right and other legitimate pre-existing rights which shall be protected.

The disputed trademark shall not be approved for registration or shall be invalidated, if it infringes another party's prior trade name right.  The applicable elements include the following aspects:

(1) The trade name has been registered previously or used by another party before the filing date of the disputed trademark;

(2) The trade name enjoys certain reputation in mainland China before the filing date of the disputed trademark;

(3) The registration and use of the disputed mark may cause confusion amongst the relevant public, and damage the interests of owner of the prior trade name.

It is usually difficult to prove that the trade name enjoys certain reputation in mainland China before the filing date of the disputed trademark, thus, the prior trade name right is easily ignored.  However, if the prior trade name right is properly claimed, it may be possible to protect those rights. 

In the "LANXESS opposition case", the claim about prior trade name right was supported by the National Intellectual Property Administration, PRC ("CNIPA").  LANXESS DEUTSCHLAND GMBH ("Opponent"), is a famous specialized chemical products manufacturer, it mainly produces chemical products for industry and agriculture purposes.  Opponent's trade name "LANXESS in Chinese characters" is a transliteration of its Latin trade name "LANXESS;" it bears certain originality as a trade name, and it was used as trade name and house trademark by the Opponent for several years, and enjoys a certain reputation amongst the relevant public in China.  

Shuhua Yu ("The opposed party") applied a trademark registration for "LANXESS in Chinese characters" ("The opposed mark") on May 7, 2015 over the goods "Chemical fertilizer; Vegetable fertilizer; Animal fertilizer; Fertilizer; Compost; Fertilizing preparations; Salts [fertilizers]; Earth for growing; Soil conditioning preparations; Fertilizer agricultural purposes."  The opposed mark was preliminarily approved and published for opposition by the CNIPA.  Opponent filed opposition against the opposed mark within prescribed time limit based on the following grounds:

1)      The opposed mark is a similar mark covering similar goods comparable with the Opponent's prior registered trademark for "LANXESS in Chinese characters" ("Cited mark") over the goods "Industrial chemicals; Chemical preparations for scientific purposes, other than for medical or veterinary use; Agricultural chemicals, except fungicides, herbicides, insecticides and parasiticide, etc. "; and

2)      The opposed mark infringes the Opponent's prior trade name right for "LANXESS in Chinese characters".

After examination, CNIPA held that although both parties' trademark are same, the opposed mark's designated goods are not similar to the designated goods of cited mark in respect to function, use purpose and target consumer, so they are not similar goods.  Therefore, the opposed mark is not a "similar mark over similar goods" compared with the cited mark.  However, the Opponent's submitted evidence, such as advertising contacts, exhibition contacts, sales contacts and bill of lading, invoices, sales agreements, auditing report, etc. can prove that cited mark "LANXESS in Chinese characters" obtained a high reputation in the specialized chemical industry before the opposed mark's filing date; Opponent's trade name "LANXESS in Chinese characters" also enjoys a high reputation amongst the relevant public through long-time use.  The designated goods of two parties have strong connection.  Considering the strong distinctiveness of the opponent's trade name, registration and use of the opposed mark will mislead the relevant public concerning the origin of goods, and damage the opponent's interests.  Thus, registration of the opposed mark infringes the opponent's prior trade name right and shall not be approved for registration.

In the above case, the examiner did not support the opponent's first claim reasoning that the opposed mark's designated goods are not similar to cited mark's goods according to the Chinese classification system.  China adopts a subclass system, namely, goods fall into different subclasses that are not similar unless otherwise stated according to the Chinese Classification of Goods and Services.  Though both of the opposed mark's goods and the cited mark's goods fall in Class 1, they fall into different subclasses, and thus, they are not deemed as similar goods.  In practice, it would be very difficult to break through the subclass system, especially in the given case; as examiner's rigidly follow the Chinese Classification of Goods and Services to examine the goods' similarity.

Gladly, the examiner in this case supported the opponent's second ground, reasoning that the opposed mark is the same as the opponent's trade name, and the trade name enjoys certain reputation amongst the relevant public in mainland China through long-term use and promotion by Opponent's Chinese subsidiaries.  Although the opposed mark's goods are not similar to cited mark's goods, they are closely related to the opponent's products, and the opponent's trade name bears strong originality.  Therefore, the registration and use of the opposed mark may cause confusion amongst the relevant public about the goods' origin, and subsequently, damage the opponent's interests.

It is obvious, that when claiming prior trade name rights the relevant party does not need to prove that the parties' goods are same or similar according to the Chinese Classification of Goods and Services; if there is a likelihood of confusion in the market because of the high connection between the parties' goods, this claim may be supported. 

Generally speaking, the scope of trademark's designed goods is narrower than trade name owner's business, so the following three points should be taken into consideration when claiming prior trade name right:

1)                      The disputed mark should be the same or highly similar with another party's prior trade name, and the prior trade name bears strong distinctiveness.  In other words, if the degree of similarity between the disputed mark and the prior trade name is not high enough, the prior trade name right claim will not be supported.  

2)                      The prior trade name must enjoy a certain reputation before the filing date of the disputed mark.   If another party's trade name is same with his house trademark, and the house trademark enjoys high reputation before the filing date of the disputed mark, it will be much easier to prove that the trade name enjoys certain reputation, because both of reputation of trade name and trademark will be simultaneously improved through use.  In the "LANXESS opposition case", "LANXESS in Chinese characters" is the opponent's trade name, and it is also the opponent's house mark which has been used directly to cover t opponent's products and commercial materials.  The evidence is sufficient to prove that the house mark enjoys a high reputation amongst the relevant public, simultaneously, as for "LANXESS in Chinese characters", as the opponent's trade name, its reputation has also been greatly strengthened.

3)                      We should fully consider and argue the relevance between the goods of the disputed mark and the goods that the trade name owner actually produces or manages.  They do not need to be identical or similar according to the Chinese classification system, but must be relevant and highly connected with each other.

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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