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Linda Liu & Partners

This time we would like to introduce you an interesting case of Sanyo Electrical Co., Ltd.. In the case, Sanyo brought an legal action against the  review decision on opposition made by the Trademark Review and Adjudication Board and challenged to use the prior copyright in the action. Finally the prior copyright claimed by Sanyo was approved by the court. The focus of the case is how we should argue about the prior copyright.
 
1. Basic information of this case

Sanyo is the right owner of the registered trademarks “SANYO” and “N design”. In 1999, Sanyo raised an opposition against the trademark “LINTO” to the China Trademark Office.  After examination, the Trademark Office decided that opposition grounds were not justified and the application registration of the trademark “LINTO” was approved.
 
Sanyo Corporation was dissatisfied with the adjudication and filed an appeal to the Trademark Review and Adjudication Board under the State Administration of Industry and Commerce (TRAB) on January 3, 2000. TRAB made the decision on July 16, 2007, which upheld the opposition decision made by the China Trademark Office. and the application for registration of the trademark “LINTO” was accepted by TRAB.
 
Sanyo thought it necessary to continues its effort in defending its rights and thus initiated a lawsuit against TRAB before Beijing No.1 Intermediate Court (hereinafter referred to as “court”) on August 15, 2007. The court held a trial on December 3, 2007.

2. The Issues of this case

①Whether the opposed trademark “LINTO” and the cited marks “SANYO” and “N” are similar or not;.
②Whether the opposed trademark “LINTO”  imitated Sanyo’s famous prior registered trademarks “SANYO” and “N Design”;
③Whether the opposed trademark “LINTO” infringed Sanyo’s prior registered trademarks.

3. Analysis

1) Whether the opposed trademark “LINTO” and the cited trademarks constitute the similar trademarks.

In opposition procedure, similarity of marks were emphasized. According to the examination standard on trademark, the opposed trademark and the cited trademark can be determined as similar trademarks, even if the similarity is only concerning one part of the marks, either word or device. The trademarks’ similarity will be compared in respect of phonetic, semantic and visual effects. According to the principle of trademark examination, if two marks are similar in terms of pronunciation, the composing Pin Yin in the later filed mark is regarded similar in pronunciation to that of  the Chinese characters in the prior filed or registered mark, then the two marks are regarded similar. If the two marks have similar appearance in terms of appearance, they will be determined as similar trademarks, because it is hard for consumers to distinguish them from each other. If two marks have similar meaning, they also may constitute similar trademarks. Though we have adopted the Nice International Classification of Goods and Service for registration of trademarks, which is different from the classification of common industries for the point that the classification is divided from the viewpoint of consumers instead of manufacturers. During the examination of trademark oppositions, the Trademark Office will firstly considers the similarity of goods on whether they fall in the same subgroups , and secondly considers whether consumers will confuse or mistaken the origin of the products during the process of purchase or use. Accordingly, both of the above conditions should be sufficiently studied when preparing the  trademark opposition arguements. That is to say, to compare similarities of two marks, it is necessary to see whether the trademarks thenselves are similar to each other and whether the designated goods are similar to each other. If the trademarks are identical or similar, the similarity of goods becomes a decisive point. In addition to the above points, when we discuss the issue of trademark opposition, we should know that one important feature of Chinese trademark law is to protect consumer’s interests as well as the exclusive right of registered trademark. Therefore. we should consider if consumers may distinguish both trademarks and the goods or services. Thus, the plaintiff Sanyo the defendant had the argument as follows:

The alleged points of plaintiff:

① In view of the trademark itself, the opposed trademark and the cited trademark constitute the similar trademarks.

②As for the designated goods, the goods under the opposed mark and  those under the cited trademark 2 belong to the same group, so the designated goods under both trademarks are similar.

③ According to the classification, the designated goods of the opposed trademark and the cited trademark 1, 3 do not belong to the similar group. However it is noted that the function and uses of the goods are similar and as a result the it is easy to make consumers misunderstand the sources of the goods. Accordingly we conclude that the designated goods under the involved marks practically similar to each other.

The alleged points of defendant:

① In view of the trademark itself, the opposed trademark and the cited trademark 1, 2 are different in the first two letters thereof  and furthermore，the pronunciations and the whole appearance are distinguishable from the opposed trademark. Thus, they do not constitute similar trademarks. The cited trademark 3 only consists of the artistic capital letter “N”. It is quite different from the opposed trademark in its pronunciation and appearance. Thus, they do not constitute similar trademarks , either.

② In view of the designated goods, those under the opposed trademark and the cited trademark 2 are similar, but different from those under the cited trademarks 1 and 3 in the aspects of production departments, marketing channels and consumers, etc. Thus they do not constitute similar goods.

As a result, it is of their opinion that the opposed trademark and the cited trademark 1, 2, 3 are not similar.

The rebuttal of plaintiff:

①In view of the trademark itself, the opposed trademark and the cited trademark 1, 2 are both word marks which consist of five letters and the lengths of which are basically the same. In addition, there are “”in the middle and “O” at the end of the trademarks.Especially, the distinctive element “” in both trademarks are exactly the same. Further, both of the trademarks are tilted to the right. Thus, as a whole, they are likely to cause the relevant public to misunderstand that they have some connection with each other and are associate marks.
②As for the opposed trademark and the cited trademark 3,it is of our opinion that they are completely the same, comparing the most distinctive part “” with the part “” of the opposed trademark.  According to the stipulation of page 73 of the Trademark Examination and Adjudication Criteria, if a trademark embodies other’s prior trademark, which is relatively popular or is a design mark with strong distinctiveness, and is likely to be confused by relative public as a series marks or cause mis-recognition to the origin of the products, the marks shall be regarded.  Especially, as indicated by the different decisions made by the Trademark Office in the adjudication of trademark opposition, the trademark “SANYO” earns some reputations among the Chinese consumers. It is apparent that the unique letter “N” in the trademark has distinctiveness and was created by the plaintiff. The “N design” of the opposed trademark and the cited trademark 3 are completely the same and the designated goods of both trademarks also have close connection. Thus, the use of the opposed trademark will make consumers misunderstood the origin of the trademark and the goods bearing the mark and confuse the relationship between the defendant and the opponent. This case is basically the same with the situation in the No.976226 “ANIS” trademark opposition case, so the adjudication in that case can be taken as a useful reference to this case.

③As for the designated goods, the case said that although the designated goods of “heating or cooling equipment” under the cited trademark 1 and the designated goods of “ air-conditioning and heating system for automobile use” under the opposed trademark do not fall in the same classification, they are very similar in the functions and use and will cause confusion among consumers. Therefore, they constitute similar goods.

④The designated goods of “air heating equipment and air conditioning equipment” under the cited trademark 3 all belong to the same group 1106 of the international classification 11 as the goods “carriage ventilation installation” . Although the designated goods “carriage air conditioning” and “carriage heating system” which belong to classification 12 were designated upon filing of the opposed trademark, the function and use of these two kinds of goods are not different practically, since these belong to the “carriage air heating and conditioning equipment”. Thus, it is concluded that these products actually constitute similar goods.
 

The most basic standard of similarity is whether the consumers will confuse the sources of the products. The defendant neglected this basic principle and made the simple judgement according to the classification table or the trademarks’ appearance instead of the proper and fair examination.

2) Whether the opposed trademark “LINTO” imitated Sanyo Corporation’s well-known registered trademarks “SANYO” and “N design” .

In the trademark opposition, it is one of the good tactics to claim for extended protection by the reason that the cited trademark is a well-known one. If the cited trademark is well-known, the court will sometimes allow to expand the protection in the decision. However, when claiming for the well-known trademark, the trademark’s reputation in China should be taken into consideration. Therefore, in this case, we made the following arguments. During proceeding the opposition, the plaintiff has submitted plenty of evidences including sales data, publicity materials, certificates of trademark registrations, the costs for advertisement and publicity in order to prove that the plaintiff’s cited trademarks have reached the level of well-known trademark after the long-term and wide use as well as publicity in China.

What should be emphasized is that the plaintiff’s cited trademark not only earns general popularity in the household appliances industry, but also wins extraordinary achievements and high reputation in the fields of electronic devices, air-condition equipment, cooling and heating equipment, etc. As the plaintiff’s marks, the trademark “SANYO” and “N design” have already been well-known among the Chinese public.

In fact, as the trademarks “SANYO” and “N design” earn high reputation in China, they are often imitated by other competitors. The opposition decision paper submitted by the plaintiff in the opposition proceeding has fully proved that the trademarks of the plaintiff are already well-known. Thus, it is clear that the plaintiff’s cited trademarks are registered well-known trademarks in China.
 
3) Whether the opposed trademark “LINTO” infringes the copyright of the cited trademark.

In trademark opposition cases, except for the prior trademark rights, several other prior rights can be claimed, such as copyright, design patent and portraiture right, etc. These prior rights can be applied to trademark opposition cases. So if we could not win the case only by the use of prior trademark right, we can consider using other prior rights in a trademark opposition. In this case, Sanyo Corporation utilizes their prior copyright  in order to protect its own rights. With respect to the copyright claimed by Sanyo Corporation, the plaintiff and the defendant had a debate on the following points during the procedure of open trial.
The defendant claims:

With respect to the copyright of “SANYO”, in the opposition proceeding the plaintiff only submitted the agreement document with the designer as a proof of its copyright. Merely submitting the agreement document will not help the plaintiff to prove its copyright.

According to the consultation from the relevant Chinese experts, “N design” is too simple to constitute the artistic work with copyright. It means that there is no copyright for this N design. On the other hand, Only the formal examination by the judgement department are not enough to argue that the certificate can guarantee the existence of copyright.
 

The plaintiff claims:

①With respect to the copyright of “SANYO”, it is apparent that “SANYO” owns the copyright, because it is clearly indicated in the submitted agreement at opposition procedure that the copyrights of “SANYO” and “N design” belong to the plaintiff. Besides, since the trademarks “SANYO” and “N design” were applied for registration in 1987 and 1995 respectively, it is true that the trademarks have already been publicized in China. The certificate of copyright issued by China Copyright Office will definitely reinforce the fact of the existence of our copyrights.

②Concerning the “N design”, the defendant stated that they have obtained “the Chinese expert’s opinion”, but not submitted any relevant evidences on it. Therefore the statement should not be adopted by the court. In addition, the “N design” was accomplished by the professional designing institution commissioned by the plaintiff. It is the achievement of intellectual creativity and owns copyright due to its distinctiveness.

③There are numerous designss of “N”, while the designs completely the same with the plaintiff’s “N design” are rarely seen in reality.
 
4. The judicial decision of this case

1) Since the opposed trademark “LINTO” and Sanyo Corporation’s trademarks “SANYO” and “N” have no specific meaning and are totally different in their pronunciations and letters, the relevant public will not confuse and misunderstand the sources of the opposed trademark and the cited trademarks. Thus, it is concluded that Sanyo Corporation’s claim is lacking of sufficient factual and legal grounds to support that the opposed trademark bears similarity with the cited trademarks in respect of similar goods.

2) Because the trademark “LINTO” and Sanyo Corporation’s trademarks “SANYO” and “N” are not similar, whether “SANYO” and “N” are well-known trademarks has nothing to do with the judgment of this case.

3) With respect to the infringement of Sanyo Corporation’s prior copyright by the opposed trademark, the court takes the following positions:

①As for the trademark “N design” which is required a protection of copyright by Sanyo Corporation, the court recognized that the trademark should be protected by our country’s Copyright Law as an artistic work because the “N design” consists of  a slanted black rectangle at its center portion and the slanted black rectangle formed by plurality of black lines, therefore, the whole design gives a very strong distinctive appearance of three-dimension. It is apparent that the mark is different from the conventional printed character and bears the intellectual labor of the designer. Accordingly, the mark “N” is the artistic work protected by our country’s Copyright Law.

② As for the issue of whether Sanyo Corporation is the copyright owner of the mark “N”, Sanyo submitted the contract of commissioned work on the mark “N design” during the opposition procedure and also submitted the certificate of copyright registration during the legal proceeding. In view of the fact that the TRAB approved the above evidences, the court will adopt these evidences.

③ Sanyo obtained the copyright for“N design” before the filing date of the opposed trademark “LINTO”. Thus, the court confirmed that Sanyo Corporation owns the copyright of mark “N”.

The mark “N” and the letter “N” in the opposed trademark “LINTO” have no difference in their appearances and will be regarded as the same design. It means that the applicant of the opposed trademark had used Sanyo’s copyrighted “N design” in the opposed trademark without Sanyo’s authorization and therefore the opposed trademark infringes Sanyo’s prior right. As a result, it is concluded that the opposed trademark should not be approved for registration and the decision of Trademark Review and Adjudication Board should be canceled for it was made on wrong facts.

Finally the court made the ruling that the defendant’s prior decision of review on trademark opposition decisio be cancelled and a new decision should be made within three months. It is also ruled that the litigation fees were bore by the defendant. Afterwards, the defendant, Trademark Review and Adjudication Board reorganized the collegial panel for reexamining the plaintiff’s review application on the trademark opposition decision, and on April 7, 2008  issued a new decision that the application for registration of the trademark “LINTO” is not approved.
 
5. The significance of winning this case

1) The use of prior rights

The prior rights mentioned here refer to other legal rights except for the prior trademark rights. At present, the prior rights involved in a trademark opposition include copyright, design patent, portraiture right and other prior rights. However, it is noted that these rights can be applied to trademark opposition cases. Thus, if we can not ensure success only by the claiming prior trademark rights in oppositions, we may claim other prior rights. In this case, the key of success is that Sanyo Corporation did use the copyright as the prior right, in addition to its claim for prior trademark right. 2) The submission of the evidences will be the most decisive factor  in claiming for copyrights.

When the copyright owners or the person affiliated to the copyright bring a lawsuit, they must submit the true and correct documents which shows the authenticity and effectiveness of the copyrights and the rights concerned, in order to prove that they surely own the copyrights and the rights concerned. For example, the copyright’s manuscript, original script, legal publications, certificate of copyright registration, the authentication certificate and the relating contract to the acquisition of the rights will be included in the category of the document, In this case, it should be noted that the contract of commissioned work and the certificate of copyright registration which were submitted by Sanyo corporation played an important role for winning the case.

3) Providing the similar precedents gives big influence to the court’s discretion.

Upon taking the litigation action, in addition to the relevant evidences, which prove that Sanyo’s trademarks are well-known trademarks and Sanyo owns prior copyright over “N design”, Sanyo also submitted several official decisions with similar situatins as the reference documents. Although the decisions may not be adopted as the evidence for ruling in the trial, apparently it plays an important role in the formation of the court’s discretion.

4) The right owner’s confidence of success is more important.

It is very important for the right owners to maintain their determination and confidence to protect their own right. In this case, although the right owner failed to get the adjudication of protecting his rights and interests from the administrative authorities, the right owner finally resorted to the judicial means to protect his legal rights. Most people tend to think it very hard to cancel an administrative decision in the administrative action. As a matter of fact, however, it is not so hard. The administrative action is an important remedy means granted by the law to the right owners and it is also regarded as a process of judging the lawfulness of the specific administrative act. Standing on the side of the right owner, it is a kind of impact to get success by means of administrative action. The final goal is to merely win the case, but to stand in our belief that our own right should be protected, and we can definitely find out the breakthrough of the case,  which forms a chain of reasonable and powerful evidences. Finally We can say that this case is just a good example which shows that we are not daunted by the administrative action by any means.
 

(2008)