Compliance measures available to prevent dilution of trademarks

By David Chen, Jin Sa, AllBright Law Offices
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The dilution of a well known trademark is an act that reduces and weakens the distinctiveness of the mark and harms and tarnishes the goodwill therein. The diluter exploits the notoriety and reputation of another’s well known trademark to earn illegal commercial gain, in doing so causing harm to the trademark’s owner. Enterprises that own well known trademarks need to pay close attention to this.

陈乃蔚 David Chen 锦天城律师事务所 创始合伙人 Founding Partner AllBright Law Offices
陈乃蔚
David Chen
锦天城律师事务所
创始合伙人
Founding Partner
AllBright Law Offices

Types of dilution

Well known trademark dilution is divided into three types – blurring, tarnishing and genericisation. The term “blurring” means the act whereby someone uses a trademark identical or similar to the well known mark for non-identical or non-similar goods or services. For example, using the computer trademark Lenovo on beer products.

The term “tarnishing” means the act whereby someone uses a trademark identical or similar to a well-known trademark for a non-identical class of goods or services that tarnishes, defames or has a negative impact on the reputation of the well known trademark. For example, using the perfume trademark Chanel for toilets.

The term “genericisation” means that a well known trademark ultimately becomes the generic name of the good due to improper use, thereby losing its distinguishing function, for example Bayer’s trademark Aspirin becoming the generic name for acetylsalicylic acid pharmaceuticals.

金飒 Jin Sa 锦天城律师事务所 律师 Lawyer AllBright Law Offices
金飒
Jin Sa
锦天城律师事务所
律师
Lawyer
AllBright Law Offices

Harming the marks

The harm to well known trademarks due to dilution is principally manifested in three ways. First is undermining of the connection between the well known trademark and a specific good or service. In the consumer’s mind, there will be a natural association between the well known trademark and the specific good or service.

For example, when the trademark Coca-Cola is mentioned, the image of a “carbonated beverage” will immediately come to mind. The dilution of a well known trademark then undermines this unbreakable association. Once someone else uses the trademark Coca-Cola for such things as restaurants or clothes, it imperceptibly dilutes the association between Coca-Cola and carbonated beverages in people’s minds.

Second is harming of consumers’ interests. In modern society, the purchase of goods based on brand name is very common. By using a good bearing a well known trademark, not only will consumers be able to enjoy a genuine good or service at a fair price, but will also be able to project their status and taste. In such a circumstance, if a well known trademark is used by someone for non-identical or non-similar goods or services, consumers are likely to be misled, thereby resulting in the consumer purchasing an inferior quality good at a higher price, or receiving a non-genuine service.

Finally there is harm to the distinctiveness, distinguishing function and reputation of the well known trademark. In the acts of dilution, genericisation harms the distinctiveness and distinguishing function of the well known trademark among the relevant public, causing the mark to change from private property to public resource, and causing the owner of the well known trademark to incur huge economic losses. As for tarnishing, it can directly harm the reputation of, and goodwill in, the well known trademark.

Compliance recommendations

As dilution causes much harm to a well known trademark, the authors wish to set out the following compliance recommendations for preventing the dilution of well known marks:

Compliance management in trademark design. When designing a trademark, it is best to select a fanciful word or other such relatively distinctive word. Innate weak distinctiveness is one of the reasons that gives rise to the dilution of a trademark, and where the meaning of a certain trademark is closely related to the features and/or purpose of the goods or services for which it is designated, it can easily be diluted into a generic name.

Compliance management in the course of trademark application. In addition to applying for certain word marks, the owner of a well known trademark should additionally design some original figures and apply for figurative marks, or for associated marks that combine a figure and word. Pursuant to the Trademark Law, the copyright in a figure may, as a prior right, serve to bar others from applying for a trademark containing an identical figure for a different class.

Compliance management in the course of the use of a well known trademark. First, the owner of a well known trademark should add “注册商标” (the Chinese characters for “registered trademark”), “®”, “TM” or other such symbols beside its well known trademark to distinguish it from the instructions for the goods, advertising slogans, the description of the goods, etc.

Second, the owner of a well known trademark should not rashly broaden use of the mark to goods or services in a different class. In the minds of consumers, there exists a specific connection between the well known trademark and specific goods or services. If the owner of a well known trademark broadens its use to goods or services in a different class, the above-mentioned specific connection will be weakened in consumers’ minds, reducing the mark’s brand value.

Prompt safeguarding of rights

Well known trademark dilution remedies. Once the owner of a well known trademark discovers that another is free riding on its mark, it needs to promptly safeguard its rights. First, the owner of the well known trademark can assign someone or engage a trademark agency to regularly review the trademark gazette to examine whether the Trademark Office has gazetted a trademark identical or similar to its well known trademark for a different class. If that is the case, it should file an opposition within the statutory period of time.

Second, if the trademark that poses a risk of dilution has been registered, the owner of the well known trademark can apply to the Trademark Review and Adjudication Board for invalidation of the registered trademark. Finally, if it is discovered that another has carried out an act of trademark dilution, a legal action for the protection of rights should be promptly instituted and legal means taken to prevent further dilution of the well known trademark.

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