Key words: prior right trade name right relevance of the goods
Main point of the judgment:
When the prior trade name is of relatively high public awareness and the goods bearing the trade name are of relatively strong relevance to the designated goods of the opposed mark, particularly in the case that the word part of the opposed mark is identical with the trade name, the use of the opposed mark is sufficiently likely to easily cause confusion and misunderstanding among the relevant public, such as to damage the prior trade name right, and thus is in violation of Article 31 of China Trademark Law.
I. Introduction
After trademark opposition, review of trademark opposition, administrative lawsuit of the first instance and administrative lawsuit of the second instance, the trademark opposition case between TDK CORPORATION represented by our firm and Quanzhou Nuojia Telecommunication Co., Ltd. (hereafter referred to as “Nuojia Company”) ended after nearly 4 years. Finally, the Beijing Higher People’s Court supported our claim, withdrew the judgment of the first instance made by the Beijing No.1 Intermediate People’s Court and the Review Decision of Trademark Opposition made by the Trademark Review and Adjudication Board (TRAB) and ordered the TRAB to make a new review decision.
Looking back this case, it can be seen that it involved a number of legal issues such as: the determination of similar goods, the recognition of well-known trademarks; and, the protection of prior rights as copyright and trade name right, etc. From the final judgment made by the Beijing Higher People’s Court, the protection of prior trade name rights during the course of granting trademark rights is the key point of this case. This article will analyze this issue using the TDK case as an example.
II. Introduction of the case
Nuojia Company filed the trademark application No.3338546 for “TDK & device” (hereafter referred to as the “opposed mark”, see the picture below) on October 17, 2002. The designated goods were “lighters; heat welding torches; water heaters; refrigerators; air conditioners for vehicles; regulating accessories for water or gas apparatus and pipes; water purification installations; radiators (heating)” in Class 11. After the opposed mark was published, TDK CORPORATION filed an opposition against this mark. The CTMO made a decision that the opposed mark is identical with the English letters and device of the trademark of some influence and registered earlier by TDK CORPORATION in Classes 7, 9, 14, 16, etc. in China (hereafter referred to as “cited mark”, see the picture below). As the use of the opposed mark on the goods “refrigerators, etc.” was considered to be likely to easily cause confusion and misunderstanding among consumers so as to cause an unhealthy influence on TDK’s rights, the CTMO refused the registration of the opposed mark.
Nuojia Company was unsatisfied with the opposition decision and appealed the case to the Trademark Review and Adjudication Board. Its main argument was that the designated goods of the opposed mark are not similar to those of the cited mark and the cited mark does not constitute a well-known trademark as prescribed in Article 13(2) of China Trademark Law. Therefore, the coexistence of the opposed mark and the cited mark would not cause confusion and misunderstanding among consumers and the registration of the opposed mark should be approved.
TDK CORPORATION responded within the prescribed period and argued that “TDK” is an originally created trademark and it is also the trade name of the company. The trademark and trade name had established a high awareness and influence among the relevant public in China through a long period of use. Under such circumstances, the registration of the opposed mark, which is identical with the trademark and trade name of TDK CORPORATION by Nuojia Company, and the use of the opposed mark on lighters, will inevitably lead to confusion and misunderstanding among consumers.
On December 27, 2011, the TRAB made a review decision denying the well-known status of the trademark “TDK”. Additionally the TRAB also considered it could not be determined whether the opposed mark infringed the prior trade name right of TDK CORPORATION and it consequently approved the registration of the opposed mark.
TDK CORPORATION was unsatisfied with the review decision and appealed the case to the Beijing No.1 Intermediate People’s Court. During the lawsuit of the first instance, TDK CORPORATION stated clearly that the claimed prior trade name right mainly involved “electronic components”. Beijing No.1 Intermediate People’s Court determined in its judgment that “electronic components” claimed by TDK CORPORATION are of obvious difference from the designated goods of the opposed mark in terms of function, use, etc. and they do not constitute similar goods. The claim by TDK CORPORATION that the registration of the opposed mark infringed its prior trade name right and should not be approved was not supported by the facts. Finally, the Beijing No.1 Intermediate People’s Court maintained the decision made by the TRAB.
TDK CORPORATION was unsatisfied with the judgment of the first instance and appealed the case to the Beijing Higher People’s Court. During the lawsuit of the second instance, TDK CORPORATION emphasized further its claim of prior trade name right. During the court trial, TDK used relevant evidence to show that the trade name had already established a high awareness and influence in China before the application date of the opposed mark. Meanwhile, TDK emphasized that the word part of the opposed mark was identical with its trade name and that the designated goods were of strong relevance to the “electronic components” of TDK CORPORATION. Under such circumstance, the registration of the opposed mark is very likely to cause confusion and misunderstanding among the relevant public.
Finally, the Beijing Higher People’s Court supported the claim of TDK CORPORATION and made a judgment repealing the review decision made by the TRAB and the judgment of the first instance and ordered the TRAB to make a new review decision. Meanwhile, the Beijing Higher People’s Court made a guiding statement in the judgment of the second instance with respect to the protection of prior trade name rights in the grant of trademark rights.
III. Analysis of the legal issues
From the above introduction of the case, we can see that the protection of prior name rights is the key point in this case. Article 31 of China Trademark Law stipulates: “An application for the registration of a trademark shall not create any prejudice to the prior right of another person, nor unfair means be used to pre-emptively register the trademark of some reputation another person has used.” In this Article, prior right refers to the rights obtained before the application date of the trademark in dispute, which in addition to trademark rights, include copyright, design, name rights, rights of portrait and trade name rights. In the lawsuit of the second instance, concerning this point, it is stated as follows:
In the determination of whether the trademark in dispute damages prior rights, with respect to the prior rights specially prescribed in the Trademark Law, it should be protected according to the Trademark Law; even though the Trademark Law does not have a special provision, if it is a legal right prescribed in other laws such as General Rules of Civil Law, it should be protected according to the corresponding provisions. Article 5(3) of Anti-unfair Competition Law stipulates, a business operator shall not harm his competitors in market transactions by using, without authorization, the name of another enterprise, thereby leading people to mistake their commodities for those of the said enterprise. Article 6(1) of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Judgment of Unfair Competition Civil Cases: “The enterprise names registered by the enterprise registration authorities according to law and the enterprise names of foreign companies used within the territory of China should be determined as the “name of enterprise” prescribed in Article 5(3) of the Anti-unfair Competition Law. According to the above laws and judicial interpretations, the trade name as the most distinguishable identification sign belongs to the prior rights prescribed in Article 31 of the Trademark Law.
From the above, the court of the second instance clearly affirmed that prior rights prescribed in Article 31 of the Trademark Law include prior trade name rights.
Usually, the trade name, as a prior right protected according to Article 31 of the Trademark Law, refers to those used earlier on goods or services identical with, or similar to, those of the trademark in dispute and which have established a certain popularity, and which may easily lead to confusion and misunderstanding among the relevant public.
However, in this case, the goods “lighters; heat welding torches; water heaters; refrigerators; air conditioners for vehicles; regulating accessories for water or gas apparatus and pipes; water purification installations; radiators (heating)” designated by the opposed mark fall into Class 11 according to the Chinese Classification of Goods and Services (hereafter referred to as the “Classification”) while the “electronic components” of TDK CORPORATION fall into Class 9. They do not constitute identical or similar goods. With respect to this, as the representative of TDK CORPORATION, we raised arguments based on the following three aspects, emphasizing that the coexistence of the opposed mark and the trade name of TDK CORPORATION would lead to confusion and misunderstanding among the relevant public.
1. Originality of the prior trade name. If the word of the trade name is not a commonly used word but a coined word without any fixed meaning, then the trade name is original. In this case, “TDK” is a composition of letters originally created by TDK CORPORATION. It originated from the English name of the company “Tokyo Denki Kagaku Kogyo K.K.” set up in 1935. The letters composition was firstly created and used by TDK CORPORATION and it is of high distinctiveness.
2. Awareness of the prior trade name. Whether the relevant public is aware of the prior trade name may be determined from the registration time of the trade name, the time span, the scope of territory, the performance of the associated business, and the advertising and promotion of the business activities under the trade name. In this case, “TDK” is the trade name used by TDK CORPORATION since 1983. In addition, it is also the trade name of a number of affiliated companies set up in China by TDK CORPORATION. The submitted evidence shows that the products of TDK CORPORATION were sold to a number of famous electronics enterprises, including “Hisense”, “BenQ”, “Motorola”, “Haier”, “Huawei”, “Philips”, “TCL”, etc., involving a number of industries such as communication, lighting industry, etc., and have obtained a good reputation in the electronic components industry. Furthermore, TDK CORPORATION has been reported on by a number of newspapers and magazines. From these facts, we maintained that the trade name “TDK” had obtained a very high awareness in China before the application date of the opposed mark.
3. The extent of relevance between the designated goods of the opposed mark and those provided by the prior trade name owner. In this case, though the designated goods of the opposed mark are not similar to “electronic components” of TDK CORPORATION according to the Classification, such a similarity is not a precondition for the protection of prior trade name rights when applying Article 31 of Trademark Law. Both trademark and trade name are commercial signs and their main function is to differentiate the sources of goods. To determine whether the trademark and trade name is in conflict, the fundamental principle should be whether it would cause confusion and misunderstanding among the relevant public as to the source of goods. Considering that the prior trade name of TDK CORPORATION has a high awareness and the industries reflected by such an awareness are of relatively strong relevance to the designated goods of the opposed mark, and, moreover, that the word part of the opposed mark is completely identical with the trade name of TDK CORPORATION, then when the consumers see the opposed mark, they must be affected by a preconceived awareness of TDK CORPORATION and naturally associate it with TDK CORPORATION. Based on this, they will misunderstand that the goods bearing the opposed mark are operated by TDK CORPORATION or the goods are authorized by TDK CORPORATION to use the trade mark or the opposed party is related to TDK CORPORATION, from a legal aspect, or by manufacturing or operation.
Meanwhile, we also claimed to the court that we should fully consider the relevant principles of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Judgment of Trademark Civil Dispute Cases (court issue (2010) No.12). The court applied the standard of grant of trademark right appropriately strictly from the perspective of protecting the interests of consumers and traders in the same industry, effectively restraining unfair preemptive registration activities, and removing confusion of commercial signs and granted protection to the prior trade name of TDK CORPORATION which is of relatively high awareness and strong distinctness.
Our claim was supported by the court of the second instance. The court of the second instance finally determined that the registration of the opposed mark infringed the prior trade name right of TDK CORPORATION which is in violation of Article 31 of Trademark Law. The details of the determination are as follows:
Though there is a certain difference between the designated goods “lighters; heat welding torches; water heaters; refrigerators; air conditioners for vehicles; regulating accessories for water or gas apparatus and pipes; water purification installations; radiators (heating)” of the opposed mark and “electronic components” in terms of function, use, etc., “electronic components” are always used as parts and components in manufacturing of “lighters; heat welding torches; water heaters; refrigerators; air conditioners for vehicles; regulating accessories for water or gas apparatus and pipes; water purification installations; radiators (heating)”. They are of relatively strong relevance in the whole manufacturing process, particularly the word part of the opposed mark is completely identical with the prior trade name, the use of the trademark identical with the trade name used earlier by TDK CORPORATION and of certain influence is easily likely to cause confusion and misunderstanding among the relevant public, so as to damage the prior trade name right of TDK CORPORATION.
The determination of the court of the second instance was consistent with the opinion of the Supreme Court in the (2011) IP Administrative No.37 retrial case. This further indicates that in the determination of whether the goods are relevant in cases of granting trademark right, factors to be considered include: whether the function, use, production sector, sales channels, consumers, etc. of the goods are identical or similar, and whether the coexistence of the two marks may easily lead the relevant public to consider that the goods or services are from the same entity or that there is special relationship between the providers. The Classification can be used as a reference in the determination of similar goods or services. However, goods and services are evolving and the market is changing constantly, so that similarity of the goods and services is not fixed and the Classification should not be applied too rigidly and simply. Instead, the practical factors should be considered more, together with the circumstances of the specific case.
IV. Summary
1. Prior trade name right is one of the prior rights prescribed in Article 31 of Trademark Law. In a specific case, the scope of protection of the prior trade name right should be determined according to the originality and the public awareness of the prior trade name and the relevance of the goods of the two parties.
2. If there is some public awareness of the prior trade name and the registration and use of the trademark in dispute may easily cause confusion and misunderstanding among the relevant public such as to be likely to damage the interests of owner of the prior trade name, it should be determined that the registration of the trademark in dispute damages the prior trade name right.
3. The Classification should not be applied rigidly and merely to determine whether the goods or services of the two parties are identical or similar as a basis on which to determine whether or not to grant protection to the prior trade name. The fundamental principle should be whether the coexistence of the trademark and the prior trade name is likely to easily cause confusion and misunderstanding about the source of the goods among the relevant public.
