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Linda Liu & Partners

 
According to China Trademark Law, in principle, trademark protection is limited to the designated goods or services. At present, it is still a common phenomenon in China that a third party, taking advantage of this principle, preemptively files applications for others’ well known or famous trademarks on different or dissimilar goods/services. By analyzing the specific cases below, this article will try to explain that the reputation of a trademark should be one of the factors to determine the similarity of goods.

I. Appeal of administrative dispute of trademark opposition review, Trademark Review and Adjudication Board of State Administration of Industry and Commerce VS. Ginwa Enterprises (Group) Inc.

1. Basic information of the case

(1) Information of the opposed mark and cited mark
 

 
(2) Basic introduction of the case

Ginwa Enterprise (Group) Inc. (hereafter referred to as “opponent” or “Ginwa company”) filed an opposition against the trademark “金花” No. 3570359 (hereafter referred to as the “opposed mark”) within the statutory period.

On Apirl 19, 2004, the Trademark Office made the (2009) Trademark Opposition No.05392 Decision on Trademark “金花” and approved the registration of the opposed mark. Ginwa company was not satisfied with the decision and filed a review with the TRAB. On March 21, 2011, the TRAB made the (2011) No.03189 Decision on Opposition Review for Trademark “金花” No. 3570359 and approved the registration of the opposed mark. Ginwa company was not satisfied with the decision and filed administrative litigation with Beijing No.1 Intermediate People’s Court. The court of the first instance held that the opposed mark constituted a similar mark to the cited mark on similar goods and infringed the prior trade name right of Ginwa company. Ginwa company and Lvgu company both accepted the original judgment. However, the TRAB was not satisfied with the (2011) No.1 Intermediate First No.1973 Judgement and appealed the case to the Beijing Higher People’s Court, which made the (2012) Higher Final No.961 Judgment by overruling the appeal by the TRAB and maintaining the original judgment on August 31, 2012.

2. The issues of this case

(1) Whether the desiganted goods of the opposed mark are similar to those of the cited mark? (Article 28 of Trademark Law)

(2) Whether the registration of the opposed mark infringed Ginwa company’s prior trade name right? (Article 31 of Trademark Law)

3. Determination by the Trademark Office

The opposition grounds claimed by the opponent were untenable and the opposed mark was approved for registration.

4. Determination by the TRAB

The opposed mark and the trademark “金花” No. 3329016 did not constitute similar marks on identical or similar goods prescribed in Article 28 of Trademark Law. Though the opposed mark “金花” was identical with the major recognizing part “金花” of the trade name of Ginwa company, the use of the opposed mark on dissimilar goods would not cause confusion among the relevant public. Thus, it did not damage the prior famous trade name of Ginwa company.

5. Judgment by the court of first instance

(1) The designated goods of the cited mark “biological preparations for medical purposes; chemical preparations for pharmaceutical purposes” is broader in scope and should be understood as the superordinate concept of “fungicides” and “germicides”. Comparing them with the designated goods of the opposed mark, which included “disinfectants for hygiene purposes; sterilising preparations”, the court found that they were similar in function, usage, consumers, sales channels, etc. and should have been determined as similar goods.

(2) To determine whether goods are similar, the reputation of the trademark and whether the trademark as a whole is likely to cause confusion among consumers on the source of goods should be taken into account. The honor certificate, annual audit report, photocopy of medicine package, advertisement contract, medicine supply contract, etc. provided by Ginwa company  proved that the cited mark was of certain reputation over use as well as the trade name “金花” is of certain reputation in pharmaceutical industry through promotion and publicity before the application date of the opposed mark.

(3) The opposed mark, the cited mark and the trade name of Ginwa company are both pure words “金花”. Lvgu company, as an enterprise also in the same biological pharmaceutical industry as Ginwa company, should have been aware of the trade name and the cited mark of Ginwa company. However, it filed the identical trademark for registration, which was obviously out of bad faith. 

Considering the above elements comprehensively, the opposed mark was determined to constitute a similar trademark to the cited mark on similar goods as well as infringing the prior trade name right of Ginwa company.

6. Main arguments by the TRAB in appeal

(1) The Classification of Goods and Services (hereafter referred to as the “Classification”), because of its objectivity, rationality and stability, is an important reference to determine similar goods and should not be applied in a different way easily. The designated goods of the opposed mark “disinfectants for hygiene purposes; sterilising preparations” and the designated goods of the cited mark “biological preparations for medical purposes; chemical preparations for pharmaceutical purposes” belong to subclass 0501 (group 6) and 0501 (group 1) respectively. Furthermore, they are different in terms of function, purpose, usage, etc. and they do not constitute similar goods.

(2) The People’s Court should to the greatest extent take the Classification into consideration when determining whether the goods are similar. Under the circumstance that Ginwa company had no evidence to overturn the Classification, there is no basis in fact for the People’s Court to actively determine that “disinfectants for hygiene purposes; sterilising preparations” and “biological preparations for medical purposes; chemical preparations for pharmaceutical purposes” are similar in terms of function, purpose, usage, etc.

(3) The reputation of the trademark should not be taken into account when determining similar goods. Whether the goods are similar is an objective fact and should not be affected by subjective factors. The view of the original judgment that the reputation of the trademark should be taken into account when determining similar goods would lead to varied results and double standards in the determination because of the differences in each case. 

(4) The designated goods of the opposed mark, which were “disinfectants for hygiene purposes; sterilising preparations” and the designated goods “medicines for human purposes” of the cited mark “金花” of Ginwa company do not constitute similar goods. Thus, the registration of the opposed mark would not cause confusion on the source of goods among the relevant public and did not infringe the prior trade name right of Ginwa company.

7. Judgment by the court of second instance

(1) The People’s Court may take the Classification into consideration when determining whether the goods are similar, but it should not mechanically follow the Classification. The determination of similar goods should be based on the function, usage, manufacturing sector, sales channels, consumers, etc. of the goods and whether confusion among the relevant public is likely. Though the designated goods of the cited mark, which were “biological preparations for medical purposes; chemical preparations for pharmaceutical purposes” and were the designated goods of the opposed mark, which “disinfectants for hygiene purposes; sterilising preparations” belong to different groups, they are identical or similar in function, usage, manufacturing sector, sales channels, consumers, etc. such that when the relevant consumers pay normal attention, it is likely to cause confusion. Therefore, they should be determined to be similar.

(2) There is no legal basis for the claim by the TRAB that the determination of whether the goods are similar should follow the Classification and this court did not support such a claim.

(3) The determination of relevant goods from the Trademark Law sense is not a purely objective comparison of the goods from physical attributes. Instead, whether the trademarks can coexist and whether confusion of the source of goods can be effectively avoided should be the major factors in the determination. Generally, the more famous the prior mark, the broader the protection and prevention scope is, so as to effectively avoid confusion of the source of goods. Therefore, the reputation of the prior mark should be taken into account properly when determining whether the goods are similar. Whether the relevant goods are similar is not absolutely unchangeable and the result may be different based on the various situations of each case. It is not inappropriate for the original judgment which took factors such as the reputation of the cited mark into account and determined that the goods are similar.

(4) The designated goods of the opposed mark and those of the cited mark (those that operate under the trade name “金花”) constitute similar goods, and the trade name “金花” is of a certain reputation. Under the circumstances if to approve the registration of the opposed mark, it is likely to be associated with the prior trade name “金花” of Ginwa company when the relevant public see the opposed mark “金花”, which would cause misunderstanding among the relevant public that the goods bearing the opposed mark are coming from Ginwa company. This would also damage the reputation carried by the trade name “金花” and the prior trade name right enjoyed by Ginwa company.

Based on the above, the original judgment is clear in fact, correct in the application of law and procedure, and should be maintained.

8. Our opinion

Article 10 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Judgment of Trademark Civil Dispute Cases in the Application of Law put into force in 2002 (Court Interpretation〔2002〕No.32) stipulated that to determine whether the trademarks are similar, the distinctiveness and reputation of the trademark requested for protection should be taken into account. However, it has always been controversial as to whether the distinctiveness and reputation of the trademark should be considered when determining whether the goods are similar. In the appeal litigation of this case, the TRAB claimed that the reputation of the trademark should not be taken into account when determining whether the goods are similar. However, as everyone knows, the reputation of a trademark would affect the recognition by average consumers. If a registered trademark is very influential or well-known, the average consumers would generally be impressed by the trademark. Even if the average consumers are able to distinguish the trademarks or identify the differences in the goods, they may still believe the two brands are relevant so as to cause confusion or misunderstanding. Therefore, in our opinion, when determining whether the goods are similar, whether or not confusion among the consumers is likely to be cause should be taken as a standard. The reputation of the prior mark may be comprehensively considered so as to provide appropriate protection which corresponds to the reputation of the trademark.

In fact, the commodity market has been always developing and changing. Along with the continuous refinement of social labor divisions and the deepening of the cross-industry expansion of enterprises, the extent of the relevance of the goods and services is also under constant change. Moreover, trademark opposition and dispute procedures are more focused on the protection of civil rights and interests and place more emphasis on the specific situations and remedies. Therefore, when determining whether goods are similar in trademark oppositions, disputes and litigation, the Classification should not be mechanically followed as a sole basis or standard. Instead, the practical factors should be emphasized, particularly the reputation of the trademark, and the determination should be made according to the specific situation of each case. We believe a proper breaking-up of the Classification in the determination of a case may not only reflect the change of the goods in practice to overcome the lag of the amendment of the Classification, but also be helpful to crack down on the free-riding of famous brands, so as to provide effective protection to the legal right holder.

II. Administrative dispute of trademark opposition review, Trademark Review and Adjudication Board of State Administration of Industry and Commerce VS. Honda Giken Kogyo Kabushiki Kaisha 

1. Basic information of the case

(1) Information of the opposed mark and cited mark


  

 

(2) Basic introduction of the case

Honda Giken Kogyo Kabushiki Kaisha (hereafter referred to as the “opponent” or “Honda company”) filed an opposition against the trademark “雅阁 YAGE & device” No. 4442873 (hereafter referred to as the “opposed mark”) within the statutory peirod. Through examination, the CTMO made the  (2010) Trademark Opposition No.15874 Decision on Trademark “雅阁 YAGE & device” and approved the registration of the opposed mark. Honda company was not satisfied with the decision and filed a review with the TRAB. On January 16, 2012, the TRAB made the (2012) No. 01415 Decision on Opposition Review for Trademark “雅阁 YAGE & device” No. 4442873 and approved the registration of the opposed mark. Honda company was not satisfied with the decision and filed administrative litigation with Beijing No.1 Intermediate Court. Beijing No.1 Intermediate Court made the judgment on December 19, 2012 and held that the No.01415 Decision was not clear in fact and should be cancelled. The argument by Honda company was that the opposed mark violated Article 28 of Trademark Law and had a basis in fact and law.

2. The issues of this case

(1) Whether the opposed mark and the cited mark constituted similar marks on similar goods?

(2) Whether the registration of the opposed mark constituted the circumstance prescribed in Article 13(2) of Trademark Law?

3. Determination by the CTMO

The designated goods of the opposed mark and those of the trademark “雅阁” cited by Honda company are not similar. In this case, the evidence provided by Honda company was not sufficient to prove the cited mark is well-known. The evidence for the claim by Honda company that Zhao Hui copied the cited mark was insufficient. The opposition grounds claimed by the opponent were untenable and the opposed mark was approved for registration.

4. Determination by the TRAB

Though the opposed mark was similar to the cited mark in composing characters and pronunciation, the designated goods of the opposed mark, which were“locks (other than electric) of metal; spring locks, etc.” were different from the “automobiles, etc.” of the cited mark based on manufacturing technique, sales channels, consumers, function, use, etc. They did not constitute similar goods.

The evidence provided by Honda company may prove that the cited mark is of some reputation for the goods classified as “automobiles, etc.” before the application date of the opposed mark. However, it had not yet reached the well-known level. The registration of the opposed mark did not constitute the circumstance prescribed in Article 13(2) of Trademark Law.

The claim by Honda company that the registration of the opposed mark by Zhao Hui violated the principle of honesty and credibility lacked basis in fact.

Based on the above, the opposition grounds claimed by the opponent were untenable and the opposed mark was approved for registration.   

5. Judgment by the court of first instance

As everyone knows, it is very common that people use “spring locks, padlocks, locks for vehicles, etc.” to protect trolleys, motorcycles, bicycles, etc. from being stolen and to ensure the safety of property in daily life. Moreover, it is common sense that vehicles are closely related to their locks. The designated goods of the cited mark, being “trolleys; motorcycles; bicycles, etc.” are closely related to “spring locks, padlocks, locks for vehicles, etc.” of the opposed mark in function and use. Their respective consumers are also similar in general. Thus, they should be determined to be similar goods. Since there is no obvious difference between the opposed mark and the cited mark, the two marks constitute similar marks. Therefore, the opposed mark constituted a similar mark to the cited mark on similar goods.

In light of this, the opposed mark violated Article 28 of Trademark Law, and the grounds of the litigation by Honda company were tenable and so it was not necessary for the court to judge the claim by Honda company that the opposed mark violated Article 13(2) of Trademark Law.

6. Our opinion

Similar goods refer to those that are identical or similar in function, use, manufacturing sectors, sales channels, consumers, etc. or that people consider them relevant and which are likely to cause confusion. Determining whether the goods are similar is closely related to the likelihood of confusion.

In this case, the cited mark of Honda company became famous on automobile goods before the application date of the opposed mark. Thus, the reputation of the trademark may affect the judgment of the relevant public on whether the goods are similar to a certain extent. It is also common sense that vehicles are closely related to their locks. Therefore, the court of first instance determined not to approve the registration of the opposed mark according to the “general knowledge” of the relevant public, taking into consideration the reputation of the cited mark and Honda company and the likelihood of confusion..

Based on the above, it is necessary to consider the reputation of the trademark requested for protection when determining whether the goods are similar. Moreover, as for trademarks which are of higher reputation, they should be given wider and stronger protection. Only then can they stimulate the winners of the market, purify the market environment and curb the malicious trademark free-riding and imitation acts. 

III. Trademark opposition, Suzuki Motor Corporation VS. Wang Yinhui 

1. Basic information of the case

(1) Information of the opposed mark and cited mark


 
(2) Basic introduction of the case
 

Suzuki Motor Corporation (hereafter referred to as the “opponent” or “Suzuki company”) found the trademark “王川铃木” No. 5791504, published in the Trademark Gazette No.1185 on September 27, 2009 (hereafter referred to as the “opposed mark”), was an imitation of its well-known trademark “铃木” and infringed its prior right. According to Articles 13(2), 28 and 31 of Trademark Law, the opponent requested to reject the registration application of the opposed mark and recognize the well-known status of its trademark “铃木”. 

On October 9, 2011, the CTMO made the (2011) Trademark Opposition No.36423 Decision on Trademark “王川铃木”, and determined the grounds of the opponent were not tenable and approved the registration of the opposed mark “王川铃木” No. 5791504. Suzuki company was not satisfied with the decision and filed a review with the TRAB. On August 27, 2013, the TRAB made the (2013) No. 52438 Decision on Opposition Review for Trademark “王川铃木” No. 5791504 and determined the opposed mark constituted a similar mark on similar goods prescribed in Article 28 and the registration of the opposed mark was not approved.

2. The issue of this case

(1) Whether the opposed mark and the cited mark constituted similar marks on similar goods? (Article 28 of Trademark Law)

According to the Chinese Classification, the goods classified as “tires for vehicles” in subclass 1208 are not similar to the goods classified as “automobiles and parts and fittings therefore” in subclass 1202.

(2) Whether the trademark “铃木” constituted a well-known trademark? (Article 13(2) of Trademark Law)

3. Determination by the CTMO

The opposed mark “王川铃木” did not constitute a similar mark to the cited mark “铃木” on similar goods. The evidence is insufficient to prove the claim by the opponent that the opposed party maliciously imitated its well-known trademark and infringed its trade name right.

4. Determination by the TRAB

(1) As for Article 28 of Trademark Law

Both the opposed mark and the cited mark are word marks. The opposed mark is composed of Chinese characters “王川铃木” and the cited mark “铃木”. The opposed mark contains the characters of the cited mark wholly and does not possess a meaning that is substantially different from the cited mark. The two marks constitute similar marks. The designated goods classified as “tires for vehicles” of the opposed mark and the goods classified as “automobiles and parts and fittings therefore” of the cited mark are closely related in function, use, circulation channel, etc. and they constitute similar goods. The coexistence of the opposed mark and the cited mark on the similar goods is likely to cause confusion and misunderstanding on the source of the goods among consumers. The two marks constitute similar marks on similar goods prescribed in Article 28 of Trademark Law.

(2) As for Article 13 of Trademark Law

Since the Board provided protection to the applicant’s prior right, the Board did not determine whether the trademark “铃木” constituted a well-known trademark and so Article 13 of Trademark Law would not be applicable in this case.

5. Our opinion

This case was represented by our firm this year. This case and the above mentioned “Ginawa company” and “Honda company” administrative litigations shared many similarities. In this case, the opponent submitted a company profile, business licenses of the affiliated companies, rank information in the industry, audit reports, publicity and advertising materials, protection history materials, etc. to prove that the opponent and the cited mark “铃木” is of high reputation and influence in the auto industry in China. At present, the recognition of well-known trademarks is limited by evaluation time and the numbers of the candidate trademarks. Moreover, the evidence requirement is very strict. In this case, although the TRAB did not directly provide broader protection to the cited mark, the TRAB broke up the classification and put the closely relevant goods “tires for vehicles” under the scope of “automobiles and parts and fittings therefore”, while considering the high reputation of the opponent’s trademark “铃木” and the close relevance of these goods in function, use and consumers.

At present, due to the practicality of the Classification of Goods and Services, the examiners of the CTMO or TRAB determine whether goods are similar almost entirely in accordance with the Classification and rarely broke up it. Therefore, in order to have a broader protection, it is very important to actively claim and prove the reputation of the right holder and cited mark in opposition or dispute cases. Only when the examiner considers the prior mark is of high reputation, can a broader protection be given to the designated goods from the perspective of effectively avoiding confusion.

Moreover, we are pleased to see that the decisions by the TRAB that mechanically followed the Classification were overturned by the court in some trademark administrative litigations by the end of 2012. Starting from this year, some of the examiners from the TRAB started to adjust their determination to focus more case by case analysis, and place more consideration on the reputation of the cited mark when determining whether the goods are similar according to the guide of the relevant cases from the courts to protect the right holder.

IV. Conclusion

From the above cases, we can see that the reputation of the cited mark is very important when it is necessary to break up the Classification in the determination of similar goods. The more famous the prior mark and the closer it is to its holder, the more likely that the identical or similar later trademark from a different entity will be misunderstood by the relevant public and cause confusion. In some cases, particularly trademark oppositions and disputes, if the goods are not similar according to the Classification, then the holder should actively collect evidence to prove the reputation of itself and the cited mark. Only when the cited mark is proved of considerable reputation, then will it be possible to break up the Classification and provide a broader and stronger protection. 

（2013）