1.    Background and Summary

Wyeth LLC is a wholly-owned subsidiary of Pfizer Inc., the world’s largest research-based biopharmaceutical company. It develops premium-quality and scientifically-designed nutritional products for infants and young children, as well as pregnant and lactating mothers.

Wyeth LLC began to sell Wyeth branded infant milk powder (in Class 5) in China since the 1980s. By virtue of extensive use and promotion, its marks “Wyeth” and “Wyeth in Chinese” have acquired high reputation and wide influence in China.

In May 2001, a local enterprise named Bowu Trading Store at Dongfeng Town, Zhongshan City in Guangdong Province of South China, applied for registration of six “ ” and “ (WYETH in Chinese)” marks on bath lotion, feeding bottles, diapers, etc. in Classes 3, 10 and 16. Later the aforesaid marks were successively assigned to a natural person Mr. Guoji LU, Wyeth (China) Limited, and Guangzhou Wyeth BB Mother-Infant Products Co., Ltd. (“GW”) [Note: Mr. Guoji LU, Wyeth (China) Limited, and GW have no relationship with Wyeth LLC].

After acquiring the “Wyeth” and “Wyeth in Chinese” marksbyassignment, GW used themon feeding bottles, bath lotion, diapers, etc.that have closerelation withinfantfoods, copiedWyethLLC’sproduct packagingandtradedress, anddeliberatelycommunicatedfalseinformation to mislead consumers.

Wyeth LLC lodged oppositions against these marks with China Trademark Office (“CTMO”) and later reviews of opposition with Trademark Review and Adjudication Board (“TRAB”), and instituted administrative lawsuits with Beijing First Intermediate People’s Court, but none was upheld. After these marks were granted registration, Wyeth LLC filed invalidations with the TRAB. Later the case underwent the Court’s first instance and second instance, then back to the TRAB for re-examination, and the Court’s another round of first instance and second instance. In total, it lasted for 16 years and underwent more than a dozen administrative and legal procedures.

The applications for the 6 disputed marks were filed on May 29, 2001 and published on April 21, 2002. Wyeth LLC lodged oppositions with the CTMO, later reviews of opposition with the TRAB and lawsuits with the Court, but was not upheld.

OnJuly26, 2011, WyethLLCfiled invalidations against the six disputed marks with the TRAB onthegroundsthatthese markscontravenedArticle41.1oftheTrademarkLawofthePeople’sRepublicofChina (“theTrademarkLaw”), “theregistrationofatrademarkwasacquiredbyotherimpropermeans”, andthattheyareliabletocreateconfusionamongthepublicandhave “otherunwholesomeinfluences” specifiedinArticle10.1.8oftheTrademarkLaw. OnSeptember10, 2013, theTRABinvalidatedthedisputed marks according toArticle10.1.8oftheTrademarkLaw.

GW was dissatisfied with the TRAB’s decisions and sued to the Court. Both the first instance Court (Beijing First Intermediate People’s Court) and the second instance Court (Beijing High People’s Court) held that the disputed marks did not contravene Article 10.1.8 of the Trademark Law, reversed the TRAB’s decisions and ordered the TRAB to make new decisions.

On April 21, 2015, the TRAB invalidated the disputed marks once again on the grounds that these marks contravened Article 41.1 of the Trademark Law. Once again, GW was dissatisfied with the TRAB’s decisions and sued to the Court. Then both Beijing Intellectual Property Court and Beijing High People’s Court dismissed GW’s claim and the case finally came to an end.

On March 30 and May 10, 2018, Beijing High People’s Court held via its judgments including (2017) Beijing-Admistrative-Final-No.487 that the disputed marks contravened Article 41.1 of the Trademark Law, “the registration of a trademark was acquired by other improper means”, and thus should be invalidated.

The reasoning of Beijing High People’s Court is as follows: “WYETH” is not a common foreign word in Chinese. It together with its Chinese equivalent possess high originality and distinctiveness. The evidence produced by Wyeth LLC is sufficient to demonstrate that the marks “Wyeth” and “Wyeth in Chinese” it used and registered in relation to infant foods had had wide influence among the relevant public in China, prior to the application date of the disputed marks. The original applicant of the disputed marks Mr. Guoji LU and GW should be aware of that. The original applicant of the disputed marks applied for quite a few marks of “Wyeth” and “Wyeth in Chinese” on goods in Classes 3, 10 and 16 that are closely related to infant goods. Mr. Lu and GW have acted in obvious bad faith.    

In addition, Mr. Lu has applied for dozens of marks in many classes, including “Nao Bai Jin in Chinese” and “DETTOL”, which are others’ prior trademarks with considerable reputation, and there is no evidence showing his intention to use them. Mr. Lu’s act to apply for a large number of marks including the disputed marks in this case is an act of hoarding marks in bad faith. His act is devoid of legitimacy and disrupts the trademark registration order.

Meanwhile, GW, after acquiring “Wyeth” and “Wyeth in Chinese” trademarks byassignment, usedthem on maternalandinfantgoodstofree ride onWyeth LLC’s product packaging and trade dress and deliberately communicated misleading information to consumers. Such act of obvious bad faith should be prohibited.

It took us, Corner Stone & Partners six years to win the final ruling since we intervened in the invalidation proceedings in 2013. The time span is long. The evidence is enormous. During the interim, the Beijing Intellectual Property Court replaced Beijing First Intermediate People’s Court to hear administrative IP cases. Moreover, in practice, the administrative and judicial organs in China still have disputes on which articles of Trademark Law should be applied to remove bad faith trademark applications and registrations. All these factors compound the situation and increase the difficulty of the case.

Wehighlightedthe following points in the documentssubmittedtotheCourt: 1) WyethLLC’strademark“WYETH” together with its Chinese equivalent possess high originality and distinctiveness. They havewideinfluenceandhighreputationonmaternalandinfantfoods in the marketplace. 2) Theapplicantofthedisputed markshasnointentionofusingthemandhoardsalargenumber of other marks whichisdevoidoflegitimacy. 3) GWfullycopiedandimitatedWyethLLCanddeliberatelycommunicatedfalseinformation to consumers. 4) There is a specific relationship between GW, Mr. Guoji LU, and Wyeth (China) Limited. GW’ssupplementaryapplicationsforthe “Wyeth” and “Wyeth in Chinese” marks laterisacontinuationoftheaforesaidLu’spreemptiveapplications, is out ofmore obvious badfaith. 5) Thecontention of a case involving trademark rights authorization and confirmation is whether the mark should be granted registration or not. In light of new and sufficient evidence submittedbyWyethLLCtestifyingpreemptiveregistrationofthedisputed marksinbadfaith, theTRABshouldinvalidate thedisputed markspursuanttoArticle41.1oftheTrademarkLaw.

We endeavored our every effort and won the case in the end. We are delighted to settle the headache issue which had beset our client WYETH LLC for 16 years.During this process, we also witnessed the great progress that China has made in recent years in combating bad faith trademark applications.

1.    China adopts “first-to-file” principle for its trademark registration system. Be the first to file a trademark application in China, even before you have a business plan for the Chinese market, not only on goods/services of your main interest, but also on some peripheral goods/services.

2.    Engage a professional Law Firm with local knowledge and international insight. The law firm should not be too obedient and mechanically follow your instructions. An excellent law firm should demonstrate its foresight and expertise, dare to provide its own valuable opinions and solutions.

3.    If your brand has already encountered trademark squatting in China, take appropriate measures to clear the obstacle and file a subsequent trademark application for registration of your own trademark. Do not give up. Attend every legal proceeding. You will have the best winning chances.

Mr. Zhenkun Fu, Senior Partner; Trademark & Litigation Attorney

Zhenkun is a leading intellectual property law practitioner with more than 15 years’ experience in prosecuting trademark and patent infringement, unfair competition, and anti-counterfeiting cases. His work with Fortune 500 companies has resulted in the recovery of millions of dollars in damages. As a leading IP litigator, having managed thousands of lawsuits, Zhenkun’s groundwork and strategic insight, coupled with his exceptional relationships with AIC, BQS and PSB at national and local levels, makes him a key leader in intellectual property enforcement in China.

Maggie is a partner of Corner Stone & Partners, a member of INTA Bulletins Committee. She has been practicing intellectual property law in China for over ten years. Maggie represents many international companies in trademark matters including strategy, prosecution, contested proceedings, licensing, well-known status, and disputes. Her practice also includes copyright and domain name registration and enforcement. Due to her deep knowledge and creative problem-solving approach, Maggie helps her clients develop and implement holistic and legally grounded intellectual property strategies in China.

 Beijing Higher People’s Court recently issued a final ruling in our favor on the case of administrative dispute over invalidation of the mark “Wyeth” involving Wyeth LLC, Guangzhou Wyeth BB Mother-Infant Products Co., Ltd. (“Guangzhou Wyeth”), and the Trademark Review and Adjudication Board under the SAIC (“TRAB”), which was handled by Corner Stone & Partners. The court held in its No. (2017)  BJAF487 Ruling that the mark at issue contravened the provision in Article 41.1 of the Trademark Law 2001 of PRC, “the registration of a trademark was acquired by other improper means”, and thus should be invalidated.

Background of the Case

Wyeth LLC is one of the manufacturers which manufacture the finest infant food products in the world. It began to sell Wyeth infant milk powder products in Mainland China as early as in the 1980s. With Wyeth LLC’s continuous use and extensive promotions, the marks “Wyeth” and “Wyeth in Chinese characters” in series have had high visibility and wide influence among the relevant public in China.

In May 2001, an enterprise by the name of Bowu Trading Store at Dongfeng Township, Zhongshan City (“Bowu”) applied for registration of the marks “Wyeth” and “Wyeth in Chinese characters” in quantity in relation to infant goods in several classes. Wyeth LLC raised opposition to these marks and review of opposition, and instituted administrative proceedings on review of opposition, but none was upheld. Wyeth LLC filed an application for dispute over the mark at issue the moment it was formally registered. The legal process for the case lasted for 16 years, from examination, first instance, second instance, re-examination by the TRAB, to another first instance and second instance. During the period, the mark at issue was assigned to Lu
Guoji, Wyeth (China) Limited (Hong Kong), and Guangzhou Wyeth successively.

Our investigations revealed that Lu Guoji was the focal point for Bowu’s applying for the aforesaid marks “Wyeth” and “Wyeth in Chinese characters”. Moreover, Lu Guoji applied for some dozens of marks personally, including “Nao Bai Jin in Chinese characters” and “DETTOL” as well as “San Mei Yi Di in Chinese characters” and “JAPANASONIC” similar to “Mei Di in Chinese characters” and “Panasonic” respectively.

Acquiring a lot of marks like “Wyeth” and “Wyeth in Chinese characters” including that at issue in the case by way of assignment, Guangzhou Wyeth used them for maternal and infant goods strongly related to infant foods to fully imitate Wyeth LLC’s products and trade dresses and deliberately communicate misleading information. In addition, Guangzhou Wyeth has filed applications for marks which contain the words/characters of “Wyeth” or “Wyeth in Chinese characters” and the device of “cartoon lion”.

Main Message in the Ruling

1. Whether the mark at issue contravened the provision in Article 41.1 of the Trademark Law 2001, “the registration of a trademark was acquired by other improper means”.

The appellate court held the following: The evidence produced by Wyeth LLC is sufficient to demonstrate that the marks “Wyeth” and “Wyeth in Chinese characters” it used and registered in relation to infant foods had had wide influence among the relevant public in China prior to the date of application for registration of the mark at issue and the original applicant of the mark and Guangzhou Wyeth should be aware of the fact. Lu Guoji, the original applicant of the mark at issue, has applied for quite a few marks of “Wyeth” and “Wyeth in Chinese characters” with respect to infant goods in Classes 3, 10, and 16. Considering that the word “Wyeth” and its corresponding Chinese “Wyeth in Chinese characters” are not common terms, Lu’s act cannot be believed to be in good faith. In addition, Lu has applied for some dozens of marks in many classes, including “Nao Bai Jin in Chinese characters” and “DETTOL”, which are others’ prior trademarks with considerable visibility, and there is no evidence for his intention to use them. Therefore, Lu’s act to apply for a large number of marks including that at issue in the case is an act of hoarding marks obviously in bad faith. His act is devoid of legitimacy in trademark registration and disrupts the trademark registration order, constituting the circumstances where provision in Article 41.1 of the Trademark Law 2001 applies, “the registration of a trademark was acquired by other improper means”. Meanwhile, Guangzhou Wyeth, after acquiring a lot of marks like “Wyeth” and “Wyeth in Chinese characters” including that at issue in the case by way of assignment, used them for daily consumables such as maternal and infant goods to fully imitate Wyeth LLC’s products and trade dresses and deliberately communicate misleading information. This act is obviously in bad faith and should be prohibited.

2. Whether the TRAB’s No. 473 Decision in re-examination was against the principle of “non bis in idem”.

The appellate court held the following: The court held in its No. (2014) HA(I)F3603 Ruling that while Wyeth LLC argued the mark at issue did not comply with the provision in Article 41.1 of the Trademark Law 2001, it could advance this argument once again in the dispute procedure when it produced different evidence and the TRAB should examine whether this argument was justified. The TRAB’s No. 473 Decision in re-examination was made in accordance with the court’s above final ruling. The TRAB’s act was, in essence, the execution of a valid ruling and it was not against the principle of “non bis in idem”. Guangzhou Wyeth’s appeal is unjustified and the court does not uphold it.

Corner Stone & Partners’ Work on the Case

The legal team at Corner Stone & Partners (“Corner Stone team”) began to represent Wyeth LLC in the case of dispute over the mark at issue in 2011. The TRAB upheld Wyeth LLC’s request and cancelled the registration of the mark at issue on the grounds of the new evidence and pursuant to Article 10.1.8 of the Trademark Law 2001. However, as the court and the TRAB differed in law application, the first instance ruling reversed the above decision after Guangzhou Wyeth brought the case to court.

In the face of failure in the first instance, the Corner Stone team sorted through and summarized all the evidence and grounds in every procedure related to the mark at issue and then fixed the direction of the action “to fully prove the mark at issue was registered preemptively in bad faith and Guangzhou Wyeth is exploiting name brands”. The following were highlighted in the appeal to Beijing Higher People’s Court: 1) Wyeth LLC’s trademarks “Wyeth” and “Wyeth in Chinese characters” with direct correspondence are distinctive and have wide influence and high visibility on the market of maternal and infant foods. 2) The applicant of the mark at issue has no intention of using it and hoards a large number of marks in addition, which is devoid of legitimacy in trademark registration. 3) Guangzhou Wyeth is fully copying and imitating Wyeth LLC and deliberately communicates misleading, false information, obviously in bad faith. 4) There is a specific relationship between Guangzhou Wyeth, Lu Guoji, and Wyeth (China) Limited. Guangzhou Wyeth’s follow-up application for the marks “Wyeth” and “Wyeth in Chinese characters” is a continuation of the aforesaid Lu’s preemptive action, more obviously in bad faith. 5) With new evidence provided, this is not the circumstances where the principle of “non bis in idem” applies. 6) The opposite party has assigned the mark at issue between a natural person, a Hong Kong company, and a domestic company. Their essential intention in doing so is to evade the law, but the nature of preemptive trademark registration in bad faith can by no means be changed. In light of new evidence given by Wyeth LLC and efficient evidence pointing to preemptive registration of the mark at issue in bad faith, the TRAB should make the decision to cancel the mark at issue pursuant to Article 41.1 of the Trademark Law.

The appellate court accepted the Corner Stone team’s argument, holding that, in light of available evidence supporting the mark at issue contravened Article 41.1 of the Trademark Law, the TRAB may cancel the mark on the grounds. Under the direction of the appellate court’s ruling, the TRAB made the decision in re-examination that the mark at issue contravened the provision in Article 41.1 of the Trademark Law 2001, “the registration of a trademark was acquired by other improper means”, and invalidated the mark. Dissatisfied with this decision, Guangzhou Wyeth brought the case to Beijing Intellectual Property Court, and, after the court upheld the decision, lodged an appeal to Beijing Higher People’s Court. During the two instances, the Corner Stone team refined and supplemented relevant evidence and arguments and collected the judicial policies and cases concerning “Stop Preemptive Trademark Registration” in recent years to submit to the court.

It is a seven-year process from the Corner Stone team beginning to handle the case to winning the final ruling. The time span is long, the evidence is enormous, and the focus of the case is also the difficulties in theory and practice of trademark matters, which increases the level of difficulty of the case. However, the Corner Stone team works to serve the client well at all times and spares no effort in the case to win it in the end. With the case, we deeply feel China’s great advancement in IP protection. The ruling on this case adequately reflects the judicial guidance from Beijing Intellectual Property Court and Beijing Higher People’s Court as to “Make the best of the Trademark Law and intensify the efforts to stop preemptive trademark registration in bad faith, exploitation of name brands, and other improper acts”.

 Mr. Zhenkun Fu and Ms. Brenda Zhao from Corner Stone & Partners give an analysis of Unfair Competition case: Reusch GMBH v. Shijiazhuang Marsnow Outdoor Commerce & Trade Co., Ltd.

 The right to a business name is the right a company has to use its registered name by law. A business name is a distinctive name which a company has by law to distinguish it from others in its operations. Its main function is to indicate the provider of goods or services and avoid confusion among consumers and the public over the goods or services provided by a company. A business name, as the carrier of the company’s goodwill, represents the image of the company. Preventing misuse of business names, goodwill dilution, and prohibiting unfair competition are an integral part of competition legislation in all countries and are an important part of IP protection in China.

 However, as the basic principle of business name registration in China is “registration at different levels and administration on different territories”, for legal protection of a business name right the right holder should provide evidence that the business name is famous on the market and well-known to the relevant public. When a case concerning a business name right is heard at court, the right will also be subject to certain restrictions on business scopes and the court will also consider whether confusion will be caused among the relevant public.

 Comparatively speaking, since foreign business names are not registered in China – and foreign business names in foreign languages are little known to Chinese consumers– it is more difficult to secure protection for their business name right. Here we analyze a case which was lost at first instance and won at second instance to see how protection was secured for the right to a foreign business name where the defendant did not use it prominently.

The circumstances of the case

Reusch GMBH (“Reusch”), the plaintiff, is a German company established in 1934. The word “REUSCH” is both Reusch’s business name and its registered trademark. Reusch has a more than 80-year history of production of protective gear in sports. Skiing gloves and goalkeeper’s gloves are its core products. Reusch owns two “REUSCH” registered trademarks in China.

Shijiazhuang Marsnow Outdoor Commerce & Trade Co., Ltd. (“Marsnow”), the defendant, is a company that manufactures and sells outdoor sportswear. Through investigation, Reusch found that some of Marsnow’s skiing gloves were suspected of infringement. These products attached several tags, the front of one of which bore strikingly Marsnow’s registered trademark “Marsnow” and a line of small words “Reusch GmbH Eichendorfstr.5.72666 Neckartailfingen” (see the picture below). The expression “Reusch GmbH” is Reusch’s German name in lower case and Eichendorfstr.5.72666 Neckartailfingen is Reusch’s former place of business.

 Then Reusch sued Marsnow before Shijiazhuang Intermediate People’s Court for trademark infringement and unfair competition.

The court rulings at first and second instances

The Court, in the first instance, held that Marsnow’s act to print the words “Reusch GmbH Eichendorfstr.5.72666 Neckartailfingen” on the lower part of the tag of Marsnow’s skiing gloves did not constitute the use of a trademark in the sense of the Trademark Law of PRC and would not be liable to cause confusion with the registered trademark REUSCH among consumers. This meant, therefore, they did not constitute an infringement of the registered trademark REUSCH. As for Reusch’s claim that Marsnow’s use of the plaintiff ’s business name in foreign language constitutes unfair competition, the court in the first instance dismissed it on the grounds that the business name in foreign language was not registered in China, was little known, and was not liable to cause confusion among consumers. Dissatisfied, Reusch appealed to Hebei Provincial High People’s Court.

 The Court, in the second instance, held the following: Marsnow’s use of the words “Reusch GmbH” on the tag of its products is liable to mislead consumers who have special needs for Reusch’s goods into associating its goods with Reusch. Because Marsnow could not justify the use of Reusch’s business name, it tried to make its goods confused with Reusch’s in bad faith. In accordance with Article 5 of the Anti-Unfair Competition Law of PRC, which says that “A business operator shall not harm his competitors in market transactions by resorting to any of the following unfair means: (3) using without authorization the name of another enterprise or person, thereby leading people to mistake their commodities for those of the said enterprise or person,” Marsnow’s act aforesaid constituted unfair competition. The court ordered that the defendant stop its infringing act and pay the plaintiff CNY 77,600 (USD 12,000) in damages.

Our strategy for the second instance

We represented the plaintiff to concentrate on unfair competition at the second instance.

 Article 5 of the Anti-Unfair Competition Law of PRC provides that a business operator shall not harm his competitors in market transactions by resorting to any of the following unfair means: (3) using without authorization the name of another enterprise or person, thereby leading people to mistake their commodities for those of the said enterprise or person.

 For the protection of foreign business names, Interpretations of the Supreme People’s Court of PRC about Some Problems with Application of Laws to Unfair Competition Cases sets out the condition of “commercial use”. Article 7 of the Interpretations specifies “the commercial use on the territory of China, including use of the name, packaging and decoration peculiar to well-known commodities or use of the name of other companies or persons for commodities, commodity packaging and commodity exchange documents, or in advertisements, exhibitions and other commercial activities”, further defining commercial use.

 As far as this case is concerned, although Reusch is not registered in China, evidence demonstrates that it has operated in China since early 1990s and its skiing gloves and goalkeeper’s gloves are well-known to a certain extent in China. Therefore, Reusch’s business name in foreign language is in alignment with the provisions for business name in the Anti-Unfair Competition Law of PRC.

 There is some difference in specification of the extent of commercial use between Article 5.3 of the Anti-Unfair Competition Law of PRC “using without authorization the name of another enterprise or person, thereby leading people to mistake their commodities for those of the said enterprise or person” and Article 48 of the Trademark Law of PRC “The use of trademarks as stipulated in this Law refers to the affixation of trademarks to commodities, commodity packaging or containers, as well as commodity exchange documents or the use of trademarks in advertisements, exhibitions, and for other commercial activities, in order to identify the source of the goods.”. The commercial use is a kind of “prominent use” according to the Trademark Law of PRC, while the Anti-Unfair Competition Law of PRC does not have this stipulation, that is to say, the Anti-Unfair Competition Law of PRC specifies smaller extent of commercial use of the name of others without authorization than the use of a trademark.

 To sum up, the court ruling it the second instance stated that“Marsnow’s use of the words ‘Reusch GmbH’ on the tag of its products is liable to mislead consumers who have special needs for Reusch’s goods into associating its goods with Reusch and Marsnow’s act constitute unfair competition” is correct because however slight Marsnow’s illegal use is, its act is liable to mislead those consumers who have special needs for Reusch’s goods, like Reusch GmbH fans, into believing that Marsnow is associated somehow with Reusch.

Note:

The First Instance File No. (2016)Ji01MinChu708

The Second Instance File No. (2017)JiMinZhong267

In the 58 cases of infringement of the right to music works dissemination over information networks against Kuwo Co., Ltd. (“Kuwo”) in which Attorney-at-law Fu Zhenkun with our firm represented Taobao (China) Software Co., Ltd. (“Taobao”), the People’s Court in Haidian District has decided in our favor recently.

Facts of the case

The plaintiff Taobao has enjoyed the exclusive right to dissemination of the music works involved in the cases over information networks. Producers of these music works include the Rolling Stones, the S.M. Entertainment, etc. Since 2015, the plaintiff has found that the defendant Kuwo was providing the pubic with the services of playing and downloading the music works involved in the cases on “Kuwo Music”, a network platform owned and operated by Kuwo, and thus infringed the plaintiff’s right to dissemination of these music works over information networks.

Bone of contention

1. Whether the plaintiff has the right to bring actions in the name of its own?
2. How to determine whether the foreign-related music collections are legally published.
3. How to assess the damages.

The court made the ruling as follows:
1. Based on the audiovisual publications involved in the cases and the written authorization thereof, it was determined that, unless contrary evidence comes to light, Taobao enjoys the exclusive right to dissemination over information networks of the song recordings involved in the cases among the producer’s rights over these song recordings, and have the right to bring actions over the act of disseminating the songs involved over information networks without consent in the name of its own for the duration of the authorization.

2. Kuwo argued that whether the foreign-related music works involved were legally published was not determined. The court held that the plaintiff had submitted the legalized and notarized documents attesting the authorization and it was determined that, unless contrary evidence was produced by the defendant, the foreign-related music collections be legally published and distributed.

3. As for the damages, the court determined that the damages should be paid by the rate of RMB 1,500 per song, and the court upheld the plaintiff’s all claims for reasonable expenses.

Our comments:

Strictest decree for music copyright protection

To tighten the supervision for network music service providers’ copyright compliance and promote a good network music copyright order, the National Copyright Administration of the PRC launched in 2015 a special initiative to regulate the network music copyright enforcement and issued to network music service providers the Circular on Ordering Network Music Service Providers to Stop Disseminating Music Works without Authorization. Since then, copyrighted music has become “a huge favorite”. All the major network music platforms have been contending for the right to dissemination of copyrighted music works over information networks and the campaigns against dissemination of music works without authorization have got underway.

Now right protection by litigation is an important option for network music service providers. Evidence in litigation can be generally classified in three types, viz. evidence on ownership, evidence of infringement, and evidence for damages. We understand in practice that ownership identification and damages assessment are the major difficulties in cases like this and no consensus over these exists among the courts. Thus, we must be more careful in our work, seeking to bring more benefits to our clients in proof of ownership and damages claim.

On June, 23, 2017, the TMO passed its No. 0000027898 Decision, deciding that the No. 15502622 mark “Yemai in Chinese characters & dv.” (“the opposed mark”), the registration of which was applied for by Xiao Yongguo (an individual) with respect to the goods ‘Chocolate beverages with milk, Beverages (Tea-based-), etc.’ in Class 30, is identical in device with the No. G793463 trademark “”, the No. G905136 trademark “”, the No. G1136632 trademark “” and the No. G858929 trademark “”, all of which are prior registered trademarks of the Societe des Produits Nestle S.A. (“Nestle”) , and thus constitutes a similar mark to the latter, and that in consequence the application for the registration of the opposed mark was refused.

As for those marks like the opposed one which comprise Chinese characters and a device that imitates/copies others’ prior registered trademarks, the TMO, the TRAB and the court did not have a unified criterion for deciding whether or not to refuse their registration, even tending to think that the device is only the background of the opposed or disputed mark and the Chinese characters is the prominent part and thus holding that the marks of two parties are not similar and their coexistence is not liable to lead to confusion among consumers. This is unfair to the owners of the prior device trademarks in that their trademarks face the risk of being abused and diluted and gradually losing protection. Fortunately, this situation has been gradually rectified in recently years and device trademarks are given protection in more and more cases.

Nestle owns a number of device trademarks like “ ” (a device of combination of heart and mouth). Actions must be taken to combat the act of imitating others’ device marks and combining the device with characters to form a new mark so as to protect device marks owners’ right and prevent the device trademarks from being abused and diluted.

In this case, as the trademark agency for Nestle, we forcefully argued for the originality and distinctiveness of Nestle’s these prior device trademarks, the degree of similarity between the opposed mark and Nestle’s these trademarks, the well-known status of Nestle’s these trademarks, and the opposed party’s bad faith in imitation, and submitted some prior successful cases similar to this one, thus succeeding in convincing the TMO to decide in our favor and refuse the registration of the opposed mark.

This case is a useful reminder to those individuals and/or organizations which attempt to copy or imitate others’ trademarks that it is unwise to take advantage of the well-known status of others’ trademarks because doing so is just a waste of time and money to achieve nothing in the end. A great brand entails nothing but the creativity and effort of your own.
 

We acted for Nestle in the case of administrative penalty against Shaoxing Jiuxianghong Wine Co., Ltd. (“Jiuxianghong”) and won the case in final ruling.

Facts of the case

Subject mark:

Trademarks involved:and

On October 21, 2015, Shaoxing Market Supervision and Administration imposed an administrative penalty on Jiuxianghong, making the decision that Jiuxianghong’s act of using the mark on the outer packaging of their feed wine products infringed Nestle’s trademark right to its registered trademarks  and for seasonings and therefore Jiuxianghong should stop their infringing act forthwith and be fined RMB 900,000. After that, Zhejiang Provincial AIC and the court of first instance upheld the administrative penalty. Dissatisfied, Jiuxianghong appealed to Shaoxing Intermediate People’s Court.

Bone of contention

1. Whether Jiuxianghong’s act of using the mark   on the outer packaging of their Taitaile feed wine products and selling the packaging accessories of the aforesaid products constitutes trademark infringement;

2. If No. 1 holds up, whether Shaoxing Market Supervision and Administration’s imposing a fine of RMB 900,000 is unjustified.

The court made the ruling as follows:

1. To judge whether trademark infringement is constituted, comprehensive factors should be taken into account, including whether the use belongs to use of a trademark, whether the subject mark is similar to the trademarks involved, and whether the goods or services for which the subject mark and the trademarks involved are used are identical or similar.

In this case, although Jiuxiang hong claimed that they only processed feed wine products but did not sell them, the products with the mark  on their outer packaging and containers would eventually come onto market. The subject mark served to identify the origin of the feed wines and Jiuxianghong’s use of the mark constituted the use of a trademark in the sense of the Trademark Law of PRC. The two trademarks involved are somewhat well-known for chicken extracts and seasonings. The striking part of the two marks is the distinctive Chinese characters “太太乐”, and so it is with the subject mark. By comparison, the characters are identical in pronunciation, appearance and lexical meaning, except that they are slightly different in font. The relevant public would be confused considering their general attention. In addition, the subject mark was used for feed wines, which belonged to daily cooking products and seasonings in function and use as relishes and seasonings for which the two registered trademarks involved are used and had the same sales channels and consumers as the latter. Consequently they were similar goods.

2. Article 60.2 of the Trademark Law of PRC provides that “If the amount of illegal earnings is greater than RMB 50,000, a fine up to 5 times the amount of the illicit earnings may be imposed.” In this case, Shaoxing Market Supervision and Administration fined Jiuxianghong RMB 900,000, which is 2.38 times the amount of Jiuxianghong’s illicit earnings, RMB 377752. Considering that Jiuxianghong would sell their feed wines overnight involved in the case , the administrative penalty of fine of RMB 900,000 was not unjustified.

Corner Stone & Partnersacted for the Societe des Produits Nestle S.A. (“Nestle”) in the case of invalidation against the No. 14669791 trademark “Taitaile in Chinese characters” in Class 7 (“the disputed mark”) and won the case.

The TRAB decided in our favor to invalidate the disputed mark on the basis that the application for registration of the disputed mark constitutes the circumstance specified in Article 44.1 of the Trademark Law of PRC about obtaining registration of a trademark “by any other improper means”

Our trademark search reveals that the disputed party, Anqing Huijin Investment Management and Consultation Co., Ltd., has applied for registration of as many as more than 400 marks in quite a few classes besides the disputed trademark in this case, a considerable number of which are identical with or similar to well-known trademarks – the No. 13117592 trademark “Wanhao in Chinese characters”, the No. 14285593 trademark “Guifuren in Chinese characters”, the No. 14333130 trademark “Zhuomuniao in Chinese characters”, the No. 14374510 trademark “Pantene in Chinese characters”, the No. 14669801 trademark “Feiyada in Chinese characters”, the No. 14715967 trademark “Alibaba in Chinese characters”, the No. 14753316 trademark “Meilishuo in Chinese characters”, and the No. 14981275 trademark “Hilton in Chinese characters” to name a few. Our submissions focus on the documents demonstrating the disputed party’s preemptive registration of others’ trademarks.

The disputed party’s act of preemptive registration not only is liable to create confusion over the origin of goods among the public, but disrupts the order of trademark registration management, damages the market order of fair competition, and betrays the principle of good faith, thus not being encouraged or supported.

We acted for the Societe des Produits Nestle S.A. (“Nestle”) in the case of invalidation against the No. 9437185 trademark “Chao Shi in Chinese characters” in Class 3 (“the disputed mark”) and won the case.

The TRAB invalidated the disputed mark on the basis as follows: (i) The disputed mark “Chao Shi in Chinese characters” is similar in characters to the cited mark “Que Chao in Chinese characters” and thus constitutes a similar mark; (ii) The goods designated for use on the disputed mark and the cited mark are identical or similar; In addition, the disputed party’s act of applying for registration of a large number of marks identical with or similar to some well-known trademarks constitutes a violation of Article 41.1 of the Trademark Law of PRC concerning the act of obtaining the registration of a trademark “by any other improper means”.

The following two groups of evidential documents we submitted to the TRAB contributed significantly to the TRAB’s decision in our favor.

1. Documents that demonstrate the well-known status of Nestle and itscited trademark; and

2. Documents that point to the disputed party’s bad faith in applying for registration of a large number of marks including the disputed one that are not based on normal use which are identical with or similar to some well-known trademarks. Apart from the opposed mark in the case, the disputed party has applied for registration of marks that are identical with or similar to others’ well-known trademarks in different businesses, such as “GUCCI in Chinese characters”, “Kaspersky in Chinese characters” and “Berluti in Chinese characters”. The disputed party’s registrations, going beyond the need for normal use in business and obviously taking advantage of others’ goodwill, constitute an act of obtaining the registration of a trademark by other improper means, hence the TRAB’s decision of invalidation.

On July 20, 2017, the State Intellectual Property Office of China (“SIPO”) released the statistics for the first half of the year 2017 and some information about the Measures for Prioritizing Patent Examination.

According to the statistics, the applications for invention patent in China amounted to 565,000 during the first half of 2017, increasing by 6.1% compared to the same period of last year. 209,000 inventions were patented, and 160,000 of them were domestic inventions. Among the patented domestic inventions, employment inventions numbered 149,000, comprising 93.1%, and non-employment inventions numbered 11,000, accounting for 6.9%. Up to the end of June 2017, the patented domestic inventions in China (excluding Hong Kong, Macau and Taiwan) had totaled 1.227 million, representing 8.9 invention patents per 10,000 heads. The top ten provinces/regions/municipalities in the rate of invention patent ownership per 10,000 heads are as follows in decreasing sequence: Beijing (85.9), Shanghai (38.4), Jiangsu (20.5), Zhejiang (18.1), Guangdong (17.5), Tianjin (16.5), Shaanxi (8.1), Fujian (7.1), Liaoning (7.0), and Anhui (7.0).

In the first half of 2017, the SIPO accepted 21,600 PCT patent applications, rising by 16.0% as against the same period of last year. Among them, 20,000 applications were filed by domestic applicants, a 15.3% increase by comparison with the same period of last year; 1,600 applications were filed by foreign applicants, a 26% increase by comparison with the same period of last year. In terms of province/municipality, Guangdong ranked first by 11,900 applications, and each of Beijing, Jiangsu, Shanghai, Shandong and Zhejiang had more than 500 applications. Applications from these 6 provinces or municipalities constituted 90% of the total PCT patent applications from domestic applicants.

In the first half of 2017, 15,865 cases of patent reexamination were filed and 8,504 of them were settled; 2,064 cases of patent invalidation were filed and 2,007 of them were settled.

In the first half of 2017, the SIPO received 1,205 patent applications on integrated circuits layout design and granted patents to 1,119 of them.

In the first half of 2017, China made public disclosure of 2,174 patent applications in the OBOR countries (excluding China), increasing by 17.8% compared to the same period of last year. The patent applications sought to take effect in 17 countries. Among them, India ranked first with public disclosure of 1,028 patent applications; Russia ranked second with public disclosure of 631 patent applications; Singapore, Vietnam and Poland ranked third to fifth with public disclosure of 180, 108 and 55 patent applications respectively. China received 2,038 patent applications from the OBOR countries, increasing by 23.2% compared to the same period of last year.

In the first half of 2017, the patent administrative enforcement cases totaled 15,411 nationwide, a 23.3% increase as against the same period of last year. Among them, patent dispute cases numbered 8,837 (including 8,666 patent infringement dispute cases), a 26.3% increase as against the same period of last year; patent counterfeiting cases numbered 6,574, a 19.5% increase as against the same period of last year.

The statistics for the first half of 2017 indicate three trends as below:

 1. Domestic invention patent numbers are steadily increasing in China. Up to the end of June 2017, the domestic invention patents in China had totaled 1.227 million. There were 8.9 invention patents per 10,000 heads in China (excluding Hong Kong, Macau and Taiwan), increasing by 2.6 invention patents compared to the end of 12^th Five-Year Plan and further approaching the target of 12 set in the 13^th Five-Year Plan for the National Economic and Social Development of the PRC.

 2. China has proper patent portfolios in its key areas. In the first half of 2017, there were 230,000 invention patents in the Beijing-Tianjin-Hebei region, increasing by 23.6% compared to the same period of last year and comprising 18.7% of the total domestic invention patents; there were 551,000 invention patents in the provinces/cities along the Yangtze economic belt, increasing by 22.0% compared to the same period of last year and comprising 44.9% of the total domestic invention patents.

 3. More and more Chinese applicants filed patent applications overseas. In the first half of 2017, Chinese applicants filed 20,000 PCT patent applications at the SIPO, rising by a staggering 15.3% compared to the same period of last year.

The press conference also imparted the background, contents and importance of the Measures for Prioritizing Patent Examination which came into force on August 1, 2017.

In the case of trademark infringement and unfair competition against Shijiazhuang Aixue Outdoor Trading Company Co., Ltd. (“Aixue”) in which the attorneys-at-law Fu Zhenkun and Xiang Chunhui with our firm represented Reusch of Germany, Hebei Provincial High People’s Court handed down the final ruling that Aixue’s act of using Reusch’s trade name on its label constitute unfair competition.

Facts of the Case

Reusch is a German company. The word “REUSCH” is both Reusch’s trade name and its registered trademark. “REUSCH” is a time-honored trademark; it enjoys well-known status and goodwill with the goods of skiing gloves and goalkeeper’s gloves both as a trademark and as a trade name.

The appellee (defendant) Aixue is a company that deals in outdoor protective equipment like skiing gloves, ski suits, ski glasses, and ski protective articles, taking a certain share of the domestic outdoor protective equipment market. Reusch was informed that the lower part of label on the package of Aixue’s goods for sale bears the words “Reusch GmbH Eichendorffstr.5.72666  Neckartailfingen”, which is suspected of infringing Reusch’s trademark right and constituting unfair competition.

Shijiazhuang Intermediate People’s Court dismissed the plaintiff’s claims at the first instance by ruling that the defendant’s act not constitute the use of a trademark in the sense of the Trademark Law of PRC. The we acted for the plaintiff to appeal to Hebei Provincial High People’s Court.

The appellate court returned the verdict as follows:

Although Aixue neither uses Reusch’s trade name as a trademark nor uses it prominently, this act is liable to lead consumers to associate its goods with Reusch by mistake and make its goods confused with Reusch’s in bad faith. In accordance with Article 5 of the Anti-Unfair Competition Law of PRC, which says that “A business operator shall not harm his competitors in market transactions by resorting to any of the following unfair means: (3) using without authorization the name of another enterprise or person， thereby leading people to mistake their commodities for those of the said enterprise or person,” Aixue’s act aforesaid constitute unfair competition.

We acted for Nestle to win the case of review of trademark refusal against the TRAB, in which the court decided in our favor to reverse the TRAB’s decision.

Facts of the case

Nestle applied to the TMO for registration and use of the mark “COOLPRO & dv.” with respect to the goods in Class 7. The TMO refused the registration. Then Nestle applied for a review by the TRAB but the TRAB also refused the registration after review. Nestle (the plaintiff in the case) brought administrative proceedings against the TRAB (the defendant in the case) before Beijing Intellectual Property Court.

The subject mark is the trademark “COOLPRO & dv.” and the cited mark is the trademark “CODIPRO”.

During the trial, Nestle produced two pieces of supplementary evidence, the Coexistence Agreement and the Letter of Consent signed between it and CODIPROLUX S. A., the owner of the cited mark.

Bone of contention

The defendant made its decision on the basis that the application for registration of the mark “COOLPRO & dv.” constitutes the circumstance specified in Article 30 of the Trademark Law of PRC, which says that “Where a trademark application … or is identical with or similar to a registered trademark used in connection with the same or similar goods, its registration shall be refused by the Trademark Office after examination and the mark shall not be published”.

The plaintiff argued that the Coexistence Agreement and the Letter of Consent entered into between the plaintiff and the owner of the cited mark should be taken into account in deciding whether or not the application for registration of the subject mark constitutes the circumstance specified in Article 30 of the Trademark Law of PRC.

The court ruling on the nature of Coexistence Agreement and Letter of Consent

The court ruled that the Coexistence Agreement and the Letter of Consent should be a factor to be taken into account in judging whether the registration of the subject mark could be granted according to Article 30 of the Trademark Law. As the Coexistence Agreement and the Letter of Consent are agreements entered into between the stakeholders -- the trademark applicant and the owner of prior trademark, they generally play a more practical role in judging whether confusion between the two marks could be caused. Unless other factors show a distinct possibility of confusion, the documents like the Coexistence Agreement and the Letter of Consent between the parties interested are usually strong evidence for dismissing the possibility of confusion. Additionally, since trademark right is a civil property right, the holder of trademark right may deal with his/her right at will according to the principle of autonomy of will unless major public interest is concerned.

In this case, the crucial evidence affecting the court ruling is the Coexistence Agreement and the Letter of Consent signed between the plaintiff and the owner of the cited mark. However, considering the strong similarity between the subject mark and the cited mark, disagreement exists in judicial practice over whether the Coexistence Agreement should be accepted in cases like this.

We acted for Kale Kilit Ve Kalip Sanayi Anonim Sirketi (“Kale Kilit”) in the case of review of trademark opposition against the TRAB and won the case in final ruling.

Facts of the case

The subject mark is “RALE KILIT”, registration of which was applied for by Suzhou Chunyuan Lockmaking Co., Ltd. (“Chunyuan”) in relation to the goods “padlocks, keys, metal locks (non-electric), spring locks, ironmongery, metal bolts, door closers (non-electric), door handles of metal, door bolts, ironwork for doors” in Class 6.

Kale Kilit is one of the largest lock makers in the world. It has a history of more than 50 years. Its products are sold in more than 80 countries or regions in the world.

On March 13, 2014, the TRAB determined that the registration of the subject mark “RALE KILIT” be approved.

The court made the ruling as follows:

Kale Kilit’s submissions during review and litigation, including sales brochures about its products bearing the trademark “KALE KILIT” available at their office in China and on its website, commercial invoices, civil and administrative decisions related, advertisements in magazines, and exhibition materials, demonstrate that its trade name and unregistered trademark “KALE KILIT” had been in use in relation to locks and related products and had been substantially famous and influential prior to the date when the registration of the subject mark was applied for. The subject mark is different from the mark “KALE KILIT” only in the initial letter. It is mostly identical with the latter in composition and design and is similar to the latter in sight. Confusion between them is liable to be created among the relevant public. It was determined that they be similar commercial marks. The goods of padlocks, keys and locks [other than electric] of metal with respect to which the subject mark was to be registered are similar to or closely associated with locks and related products of Kale Kilit. As a lockmaking company, Chunyuan should be aware of the company name and trademark of Kale Kilit which is a world-famous lock maker with an over 50-year history. In addition, Chunyuan has applied to register the mark “WEKALE & dv.” and some other marks similar to Kale Kilit’s prior trademark and this act constitutes the act of preemptively registering a trademark in an unfair manner. As such, the registration of the subject mark prejudices Kale Kilit’s right to its prior trade name and this act constitutes the act of “preemptively registering in an unfair manner a mark that has already been in use by any other party and has substantial influence”. Thus, registration of the subject mark should be refused.

Corner Stone & Partners, representing SOLEN CIKOLATA GIDA SANAYI VE TICARET ANONIM SIRKETI won Refusal Appeal against the Trademark No. 13517759 “GOFRESH” (“the subject mark”).

The CTMO refused the application for registration of the subject mark on the grounds that the subject mark, which meant “going fresh” and only indicated the function and intended purpose of the goods in respect of which it was to be used and was a general advertising wording, was not distinctive and could not function as a trademark.

In general, for a trademark application that is refused by the CTMO on the grounds of lacking distinctiveness, there is little chance of winning appeal of the refusal merely by arguing that the mark is distinctive unless ample evidence is provided to prove that the mark has acquired distinctiveness through use. The case is a typical one we won merely by arguments. We argued the distinctiveness of the subject mark based on the following grounds:

1.The subject trademark No. 13517759 “GOFRESH” in Class 30 is a coined trademark and has great distinctiveness as a trademark. It should be perceived in its entirety. It is unreasonable to dissect the mark into different parts and raise adverse comments thereon, only to fail to appreciate and give a fair and proper evaluation of the mark as a whole. When considered as a whole, the subject mark cannot be said to be devoid of any distinctive character.

2.The major business of the applicant is associated with sweetmeat, confection, chocolate and etc. The goods covered by the subject trademark are honey; propolis; sugar; lump sugar; powdered sugar; confectionery; Turkish delight; chocolates; chocolate products; biscuits; cakes; chocolates and candies with caramel filing; chewing gum, etc. The CTMO unreasonably divided the subject trademark “GOFRESH” into two parts -- “GO” and “FRESH” and translated the two parts into Chinese. In fact, the applicant is in no way meant to describe these goods items with the term “go fresh”. The subject mark is not a natural use of the English languages, especially, not a usual term to associate with the designated goods items.

3.The subject trademark was coined by the applicant, and it is the corresponding English mark of its Chinese Trademark No. 13517758 “” (GOFRESH in Chinese), which has been approved for registration by CTMO. The subject mark is not a familiar expression either to describe the goods designated or their essential characteristics. Consumers who come across the mark would not take it as an advertising slogan but an invented term. The subject trademark should be considered distinctive to function as a trademark, which shall not mislead the relevant public on the source of goods.

4.Many trademarks that share the similar situation with the subject trademark have been approved for registration. To support the above claim, we searched the online database of the CTMO, obtained and submitted the copies of trademark registration records. We requested the TRAB to be consistent in its examination criteria and approve registration of the subject trademark.

In the end, the TRAB made the decision that the registration of the Trademark No. 13517759 “GOFRESH” shall be approved on all its designated goods (TRAB’s Decision No. [2015] 0000052549). 

Corner Stone & Partners, representing Nestle, won Appeal of Opposition against the Trademark No. 9244283 “Guanneng in Chinese characters” (“the opposed mark”), the application for registration of which was filed by Shanghai Chusheng Trading Co., Ltd.

During the opposition, the CTMO decided that Nestle’s opposition was unjustified because the goods/services covered by the marks of two parties were not identical or similar. The opposed mark were to be used on the services of “animal breeding and animal grooming” in Class 44 while the opponent’s cited trademarks were to be used on the goods of “litter trays for pets and animal foodstuffs” in Classes 21 and 31.

During the appeal of opposition, we argued that the reputation of the cited marks and the relevance of goods/services of the two parties should be considered when judging similarity of the goods/services concerned. Nestle’s registered trademark “Guanneng/PRO PLAN in Chinese characters” had enjoyed high reputation and the services of “animal grooming and pets grooming” designated by the opposed mark were closely related to the goods of “animal foodstuffs” designated by Nestle’s 1st cited mark No. 3519642 and the goods of “combs for animals, drinking troughs and feeding troughs” designated by Nestle’s 2nd cited mark No. 6330917 in terms of function, intended purpose, target consumers and sales channels. The opposed mark was identical with Neslte’s cited trademarks in respect of similar goods/services and its registration and use was likely to confuse consumers about the origin of goods/services. According to Article 28 of the old Trademark Law of PRC, the registration of the opposed mark shall not be approved on the said services.

In the end the TRAB decided the case in our favor, holding that: (i) the services of “animal grooming and pets grooming” covered by the opposed mark were similar to the goods of “animal foodstuffs” covered by Nestle’s 1st cited mark and the goods “combs for animals” covered by Nestle’s 2nd cited mark in terms of target consumers and sales channels and these goods/services were closely related goods/services; and (ii) the evidence submitted by Nestle demonstrated that its mark “Guanneng/PRO PLAN in Chinese” had been used on the goods “animal foodstuffs” and enjoyed certain fame prior to the application date of the opposed mark. The registration and use of the opposed mark on the said services was likely to cause confusion among consumers. Consequently the TRAB made the decision that the opposed mark should be refused for registration (TRAB’s Decision No. [2014] 045846). 

Corner Stone & Partners, representing Nestle, won appeal of opposition against the Trademark No. 7944517 “Huitian in Chinese characters & device” (“the opposed mark”), the application for registration of which was filed by Shanghai Chunde Food Co., Ltd.

During the opposition, the CTMO decided that Nestle’s opposition was unjustified on the grounds that the opposed mark was dissimilar to Nestle’s prior IR No. 965171 “device” and Trademark No. 1359017 “MILO & device” and that Nestle’s evidence for claiming that the applicant copied its cited marks in bad faith and infringed its copyright was insufficient.

Nestle was dissatisfied with the CTMO’s decision and entrusted us to appeal before the TRAB. During the appeal proceeding, we cited Nestle’s earlier registered trademarks IR No. 965171 “device”, No. 7746523 “MILO in Chinese characters & device”, No. 1359017 “MILO & device” and No. 1299391 “MILO & device” (collectively referred to as “cited marks”), and submitted the copyright transfer agreement (notarized and legalized) and its Chinese translation to prove Nestle’s ownership of the copyright on the “MILO wave device”. Meanwhile, we held that the applicant of the opposed mark was copied the cited marks in bad faith.

The TRAB decided the case in our favor based on Nestle’s prior copyrights over the MILO wave device, holding that: (i) Nestle’s “MILO wave device” had considerable originality, constituted an artwork and should be protected according to China Copyright Law. (ii) The evidence produced by Nestle showed that it had got the “MILO wave device” registered as part of its trademark prior to the application date of the opposed mark. Nestle’s “MILO wave device” was created before the application for registration of the opposed mark was filed. Nestle entered into a copyright transfer agreement with the agency that was authorized to design the “MILO wave device” in September 2010. The copyright, design patent right and all other related intellectual property rights on the “MILO wave device” were transferred to Nestle and therefore Nestle had the prior copyright on the “MILO wave device”. The applicant of the opposed mark did not provide evidence strong enough to overturn the said fact. (iii) The opposed mark was almost identical with the “MILO wave device” in composition, layout and visual effect and therefore constituted substantial similarity to Nestle’s copyrighted artwork. To summarize, the act that the applicant’s application for registration of Nestle’s “MILO wave device” as a trademark without Nestle’s permission infringed Nestle’s prior copyright. In the end, the TRAB made the decision that the registration of the opposed mark should be rejected (TRAB’s Decision No. [2013] 111437). 

Corner Stone & Partners represented Nestle in the case of appeal of opposition against the Trademark No. 6863248 “NESPRESSO in Chinese characters & NESPRESSO” (“the opposed mark”) in Class 18, the application for registration of which was filed by Dongtai Sanfei Garment Factory, and won the case.

During the opposition, the CTMO decided that Nestle’s opposition was unjustified on the grounds that the opposed mark was dissimilar to Nestle’s earlier registered marks “NESPRESSO in Chinese characters” and “NESPRESSO” in respect of similar goods and that Nestle’s evidence for proving the cited marks as well-known trademarks was insufficient.

During the appeal of opposition, the case was handed over to our firm. We submitted substantial evidential documents to demonstrate the well-known status of the marks “NESPRESSO in Chinese characters” and “NESPRESSO”. and that the applicant was a habitual offender who often copied others’ famous trademarks in bad faith. The applicant’s act of copying Nestle’s reputable marks “NESPRESSO in Chinese characters” and “NESPRESSO” in bad faith went against the principle of good faith, disturbed the trademark management order and had an adverse social impact, thus violated Article 10.1.8 of the old Trademark Law of PRC.

The TRAB decided the case in our favor, holding the following: (i) the opposed mark was identical to the cited marks in composition and the letter sequence; (ii) apart from the opposed mark, the applicant had applied for registration of the marks “little bebe”, “NellyRodi”, “Bin She Man in Chinese characters”, “RODRIGO & device” , etc., which were identical with or similar to other world-famous brands or marks; (iii) the applicant’s application for registration of the opposed mark was an act of copying or imitating others’ famous trademarks through unfair means; and (iv) the act of this kind was liable to confuse consumers about the origin of goods, disturbed the trademark registration and management order, damaged fair competition, and went against the principle of good faith, thus violated Article 10.1.8 of the old Trademark Law of PRC. In the end, the TRAB made the decision that the opposed mark should be refused for registration (TRAB’s Decision No. [2013] 120980).

Comments: By highlighting the high reputation of Nestle’s marks and the applicant’s bad faith, we succeeded in persuading the TRAB to go beyond the normal practice that where the registration of relevant signs might prejudice specific civil rights or interests, it shall not determine the same as falling into the scope of other negative influences due to the fact that the trademark law has otherwise regulated the remedy mean and corresponding procedures". In the end, the TRAB made the decision that the opposed mark should be refused for registration.