New guides

By Huang Hui and Paul Ranjard, Wanhuida Intellectual Property
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Beijing High Court has issued guidelines on administrative trademarks cases

The Beijing High Court publishes guidelines for the hearing of administrative cases concerning trademark prosecution. The first one was published in January 2014, after the 2013 revision of the Trademark Law (the law). It was a relatively brief document, with 30 articles. On 24 April 2019, the Beijing High Court published a new set of guidelines. This time, the document is much more extensive, with 162 articles. The guidelines were published one day after the recent revision of the law (on 23 April 2019), and obviously, they refer to the law before such revision. The following highlights some key aspects of the guidelines.

trademark law
Huang Hui
Senior Partner
Wanhuida Intellectual Property

Bad faith

Article 7.1 of the guidelines concerns article 4 of the law. In the latest revision of the law, the act of filing, in bad faith, a trademark application without intention to use it is a cause for refusal of the trademark application. The guidelines, in a way, anticipate the revision by giving several examples: (1) “applying for registration of a large number of trademarks without justifiable reasons”; (2) filing trademarks identical with or similar to other trademarks, commercial names, or places, that have a certain reputation and are strongly distinctive, when the “circumstances are serious”.

Articles 17.2 to 17.4 of the guidelines are about the determination of “other improper means”, mentioned in article 44 of the law. Article 44 relates to the invalidation of a trademark based on absolute grounds. Articles 17.2 to 17.4 give examples of what are “other improper means”, but also examples of what are “specific circumstances of other improper means”, and finally, what are “exceptions to specific circumstances to other improper means”. In short, it means that it will be possible to request the invalidation of a trademark by showing that the trademark applicant has been filing many other litigious trademarks.

Article 18.4 of the guidelines provides nine criteria for the determination of “bad faith”, as mentioned in article 45.1 of the law. The last two points are interesting: (1) the behaviour of the litigious trademark registrant after the registration may be taken into account. If he “unfairly exploits” the goodwill of the prior well-known trademark, this confirms the bad faith, and (2) the fact that the litigious trademark owner files applications for the registration of a large number of other trademarks with reputation and distinctiveness, is also an indicator of bad faith.

trademark law
Paul Ranjard
Of Counsel
Wanhuida Intellectual Property

Well-known marks on identical or similar goods

Articles 11.2 to 11.4 of the guidelines concern the application of article 13.3 of the law, i.e., the protection of well-known registered trademarks against identical, similar or translated trademarks filed in respect of different goods. Nothing new here, and it is regrettable that the High Court did not seize this opportunity to address the situation where a trademark needs to be defended against the risk of association created by a “remotely” similar trademark filed for the same category of goods. Article 11.7 of the guidelines even seems to indicate that if a prior trademark owner files an opposition or invalidation against a subsequent trademark, citing article 13.3, and the CNIPA (TRAB) rules in favour of the application by applying articles 30 or 31 of the law (identical or similar trademark on identical or similar goods), the defendant could NOT complain that the ruling was based on an erroneous application of the law.

Article 11.8 of the guidelines clarifies the scope of protection of registered well-known trademarks against use on identical goods: even more than five years after the registration of a litigious trademark, the owner of a well-known trademark may apply for its invalidation.

Later mark

Article 15.1 of the guidelines is about the so-called “extension” of trademark registration. It addresses the situation where a person, who already owns a registered trademark, later decides to file a new application for an identical or similar trademark, and finds that his new application is opposed by the owner of another trademark who had obtained its registration in the interval. The opposed applicant wishes to claim that his new application is nothing but an “extension” of his prior registered trademark. The guidelines consider that such reasoning is acceptable, provided that the first registered trademark has been continuously used and has acquired a certain reputation.

Article 15.2 of the guidelines concerns the criteria of determination of the similarity between two trademarks, when articles 30 and 31 of the law apply. The following criteria should be taken into consideration: the degree of similarity between the trademarks and the goods, the distinctiveness and reputation of the cited trademark, the degree of attention of the relevant public and the subjective intention of the applicant of the litigious trademark.

These principles were defined by the Supreme People’s Court (SPC) in its 2017 Interpretation of the Trademark Law about the determination of the likelihood of confusion, under article 13.2 (unregistered well-known trademark). It had been, orally, confirmed by the SPC that these criteria should be used also when applying article 30 of the law. The purpose is to assess the likelihood of confusion between two trademarks, the degree of similarity being only one of the criteria.

Article 15.3 of the guidelines is about the determination of similarity in cases concerning review of trademark refusal, specifies that “the reputation of the litigious trademark may not be considered”.

Article 15.4 concerns the determination of similarity in cases concerning review of disapproving trademark registration and invalidation requests. Here, the solution is totally and surprisingly different.

This is basically what the Supreme People’s Court had expressed under the so-called “inclusive development theory” in two Interpretations of 2010 and 2011: the reputation of both trademarks – the cited and the opposed – were to be compared, and if the applicant or registrant of the litigious trademark was not in bad faith, and had acquired a critical position in the market, the two trademark would continue to coexist. Such theory had attracted negative reactions, as it was seen as a way to legalize infringement through extensive use.

As indicated above, the Supreme People’s Court had rectified the position in the Interpretation of 2017. This article 15.4 of the Guidelines, therefore, comes as a (bad) surprise. The mistake is (1) that the Court focuses on the trademarks similarity in abstracto, rather than on the likelihood of confusion, and (2) the Court deems that good faith has influence on the likelihood of confusion.

Huang Hui is a senior partner at Wanhuida Intellectual Property. He can be contacted at +86 10 6892 1000 ext. 201 or by email at [email protected]

Paul Ranjard is of counsel at Wanhuida Intellectual Property. He can be contacted at +86 10 6892 1000 ext. 388 or by email at [email protected]

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