To explore China's Court's attitude to trademark coexistence agreement in cases where trademarks are substantially similar, exclusive of identical trademarks, the authors review the Courts' latest binding judgements and summarize the Courts' perspectives in these cases. We hope this article will be helpful for applicants seeking trademark protection in China. The Courts' judgements reflect the following perspectives.
1. Even the marks are substantially similar, the Court accepts coexistence agreement on the precondition that there is no prejudice to public interests. This is full respect for the private-law characteristics of trademarks.
On April 14, 2020, Beijing High People's Court made a final judgment in the administrative litigation for the review of the refusal of "Aaaaaaaaaaa", in which the Letter of Consent issued by the owner of the cited marks "Emerald" and "EMERALD PERFORMANCE MATERIALS" was accepted1.
The judgement of second instance upheld that "China Trademark Law does not only protect legal rights of trademark owners, but also considers the legitimate rights and interests of consumers. However, the Trademark Law mainly focuses on the legal relationship of trademarks. Under current legal framework in China, the protection of consumer rights has been regulated and adjusted by specialized laws. In the application of trademark law, the legal relationship of trademarks should also be the main object. As a civil property right, trademark right is essentially a private right. According to the principle of will autonomy, unless there are major public interests involved, trademark owners can dispose of their trademark rights according to their own will. Trademark authorized administrative agencies or people's Courts should respect this and should not interfere unreasonably. When determining whether the trademarks are similar, the opinions of the previous trademark owners shall be fully considered and respected. In addition to registration of identical trademarks on same goods or services, to prevent the parties from circumventing the trademark ownership system through coexistence agreement under the trademark law, where the trademark coexistence agreement is not considered, for similar trademarks on same or similar goods, coexistence agreement shall be used as an important basis for judging whether the trademarks are similar or not".
In this case, the Court clarified that the Trademark Law mainly focuses on the adjustment of the legal relationship of trademarks, and that the protection of consumer rights has been regulated and adjusted by other specialized laws. Therefore, when determining whether the trademarks are similar, the opinions of the previous trademark owners should be fully considered, and coexistence agreement should be accepted if no major public interests is involved. This is also the mainstream idea for acceptance of coexistence agreement in China.
2. Even the marks are substantially similar, the Court accepts coexistence agreement under the status that the marks are owned by parties with common interests. This is full consideration that the marks represent same or related interested parties.
On Apr. 21, 2020, Beijing High People's Court made a final judgment in the administrative litigation for the review of the refusal of "bbbbbbbbb" (ALFA ROMEO & DEVICE), in which the Letter of Consent issued by the owner of the cited marks "cccccccccccc" (ALFA ROMEO & DEVICE), "dddddddd" (ALFA ROMEO阿尔发 罗密欧商标) (cited mark No.2) and "eeeeeeeeee" (alfa Romeo) (cited mark No.3) was accepted2.
The judgement of second instance upheld that "In this case, the trademark in dispute and the cited marks No.2 and No.3 are different in terms of design style, expression technique, overall appearance, the trademark in dispute and the cited mark No.1 are different in device color and letter font. On this basis, considering that the owner of cited marks No.1, No.2 and No.3 has issued a Letter of Consent to approve the use and registration of the trademark in dispute on its designated services in Class 35, moreover, the FCA GROUP MARKETING S.P.A. (applicant) and FIAT GROUP AUTOMOBILES S.P.A (owner of the cited marks) belong to the same industrial group controlled by Fiat Chrysler Automobiles. Therefore, the coexistence of the trademark in dispute and the cited marks will not cause confusion among consumers and they do not constitute Article 30 of China Trademark Law."
In this case, the Court considered that the owner of the cited marks issued Letter of Consent, meanwhile, the applicant and the owner of the cited marks are common interest entities, therefore, the coexistence of the subject mark and the cited marks will not cause confusions, the validity of Letter of Consent is accepted.
3. Even the marks are substantially similar, the Court accepts coexistence agreement because the parties are direct participants in the market. This is full confidence on judgments of owners of the trademarks, as they are actual operators in business activities.
On Apr. 19, 2019, Beijing High People's Court made a final judgment in the administrative litigation for the review of the refusal of "Aaaaaaaa" (DIY & HOME IMPROVEMENT), the Letter of Consent issued by the owner of the cited mark "Bbbbbbbbbbbbbbbb" (DIY HOME & DEVICE) was accepted. 3
The judgement of second instance upheld that "In examination of a trademark application, the determination on likelihood of confusion made by the trademark administration authority or Court is from the perspective of relevant public, while Trademark Coexistence Agreement is restriction on the prior rights of cited marks. Therefore, if there is certain difference between the trademarks, the Trademark Coexistence Agreement is usually strong evidence to exclude likelihood of confusion and it can be considered as factor when applying Article 30 of the Trademark Law."
In this case, the Court recognized coexistence agreement as restriction on the prior rights of the cited mark and it is judgement made by the owner of the cited mark as a participate of market activities with full recognition on possible results of actual coexistence of the two marks. The conclusion of coexistence agreement is more in line with the market and commercial reality, thus it is accepted.
4. Even the marks are substantially similar, the Court accepts coexistence agreement with breakthrough of similarity between goods of both parties. This is full representation of the focus on "whether coexistence will cause confusion among relevant public".
On Aug. 30, 2019, Beijing High People's Court made a final judgment in the administrative litigation for the review of the refusal of "Aaaaaaaaaaaa" (G DEVICE), the Letters of Consent issued by the owners of the cited marks "Bbbbbbbbbbbbb" (G DEVICE) (cited mark No.1) and "Cccccccccccc" (G DEVICE) (cited mark No.2) were accepted. 4
The judgement of second instance upheld that "The goods covered by the trademark in dispute include 'hard disk drives. portable hard disk drives, etc.', the goods covered by the cited mark No.1 include 'computer games, computer games software, etc.', the goods covered by the cited mark No. 2 include 'computer software [recorded]; computer programs [recorded], etc.' Though these goods are classified into Class 9 in accordance with Classification on Similar Goods & Services, they are obviously different in their use, function, target consumers, etc. and are not closely related, the relevant public generally will not think that these goods are provided by the same subject. Therefore, the goods covered by the trademark in dispute shall not be considered as similar to the goods of the cited marks No.1 and No.2. In addition, considering that HGST NETHERLANDS B.V. has signed coexistence agreements with the owners of the cited marks No.1 and No.2, what's more, coexistence agreement signed with the owner of the cited mark No.1 clearly stipulated that the trademark in dispute shall be used on science and technology storage products, and the cited mark No.1 shall be used on products related to American football, both parties clearly stated that they will take all reasonable and necessary measures to prevent confusions. In the event that there is no any other evidence to prove that the coexistence of trademark in dispute and two cited marks will cause confusion among relevant public, the trademark owners' free disposal of prior rights shall be fully respected."
In this case, although the goods covered by the trademark in dispute and those of the cited marks are in the same subclass and are considered as similar goods under Classification on Similar Goods & Services, the Court fully considered the limitation on the types and scope of goods in actual use in coexistence agreement and determined that the goods are not similar, thus accepting coexistence agreement.
5. Even with a coexistence agreement, the Court does not accept it considering specialty of goods involved. This is full protection of public interests, which may be affected by particular goods.
On Dec. 26, 2019, the Supreme Court made a Judgement in the retrial for the review of the refusal of "Dddddddd" (WU BI in Chinese). In this case, the Letter of Consent issued by the owner of the cited mark "Eeeeeeeeeeee" (WU BI GAO in Chinese) was not accepted.5
The retrial judgement held that "The goods 'medicines for human purposes, capsules for medicines' covered by the trademark in dispute have special nature, which are directly related to people's health and medication safety. From the perspective of public interest, confusion and misunderstanding caused by similar marks shall be avoided when relevant public choose drugs. In this case, the trademark in dispute is highly similar to the cited mark, the registration of the trademark in dispute is liable to cause confusion among consumers and may harm the public interest".
In this case, the Court took full account of the public interest in deciding if coexistence of the trademarks shall be allowed. Under the circumstances that the trademark coexistence may cause major damage to the public interest, coexistence agreement is not accepted by the Court.
In summary, in judicial practice, the validity of coexistence agreement is widely recognized under the premise of not causing damage to public interest. Adequate knowledge of development of latest judicial judgements and China's Courts' consideration in such cases will be helpful for trademark applicants in making decision on whether it is worthwhile to make investment in time and economy to obtain coexistence agreement.
1 (2019) JING XING ZHONG No. 3317
2 (2019) JING XING ZHONG No. 9097
3 (2019) JING XING ZHONG No. 461
4 (2019) JING XING ZHONG No. 4885
5 (2019) ZUI GAO FA XING SHEN No. 4581
Originally published August 3, 2020.
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.