SPC explains how to interpret the revised Trademark Law

It is the role of the Supreme People’s Court (SPC) to give guidance to the People’s Courts on how to interpret the laws. The SPC does it through promulgating “judicial interpretations” and other documents to address the application of laws.

In 2014, the SPC circulated a draft of Provisions on Several Issues Concerning the Hearing of Administrative Cases Involving the Granting and Affirmation of Trademark Rights and collected comments, after which the draft was significantly revised. This final version of the provisions was adopted at the 1,703rd meeting of the Judicial Committee of the SPC in December 2016 and entered into effect on 1 March 2017.

The main points of the provisions are summarized below.

MAIN POINTS

Distinctiveness

Signs are generic if they are commonly perceived as such by the relevant public according to professional reference books, dictionaries or historical tradition, local customs and practices, geographical environment or other reasons. The assessment should be made as of the time of filing of the application, unless the situation has changed at the time of approval.

Signs in a foreign language that have an inherent meaning may still be registered if the public is hardly aware of the meaning of such word. Signs that only insinuate the features of the good, but do not affect its identifying function, may be registered.

3D trademarks

If, under most circumstances, the relevant public is not likely to take the sign as a source identifier, the mark may not be registered. However, it is possible to rely on acquired distinctiveness through long term or extensive use

Unregistered well-known trademark

Likelihood of confusion is assessed on the basis of: (1) the extent of similarity of the trademarks; (2) the extent of similarity of the goods on which the trademarks are designated to be used; (3) the extent of distinctiveness and reputation of the trademark that requests protection; and (4) the degree of attention of the relevant public; and (5) other pertinent factors.

In addition, the “intention” of the applicant and the evidence of actual confusion may also be taken into consideration, but the lack of evidence concerning the intentions of the applicant or any actual confusion will not have any negative impact.

In the meantime, the so-called “inclusive development theory”, which was in the previous opinions of the SPC in 2010 and 2011, seems to be abandoned.

Registered well-known trademark

The provisions do not use the word dissimilar (as used in article 13.3 of the Trademark Law). This omission might be voluntary. The court will examine whether the litigious trademark is likely to cause a certain degree of association, and mislead the public and harm the interests of the well-known trademark owner. The following factors are listed in the provisions: (1) the distinctiveness and extent of reputation of the cited trademark; (2) whether the trademarks are sufficiently similar; (3) the goods on which the trademarks are designated to be used; (4) the extent of overlapping of the relevant public and the degree of attention thereof; and (5) signs similar to the cited trademark that are legitimately used by other market entities or other pertinent factors.

No reference is made to the reputation of the litigious trademark, which seems to confirm the abandonment of the “inclusive development theory”.

It seems that the SPC agrees that a trademark owner may invoke article 13.3 of the Trademark Law (in addition to article 30) even when the litigious trademark is applied or registered for identical or similar goods. The underlying reasoning – as can be found in an SPC ruling in the case P&G v Trademark Review and Adjudication Board and Weishida in May 2016 – is that if article 13.3 can be applied, after the five-year limit, to a litigious trademark that would have been refused or invalidated pursuant to article 30 within such five-year limits, it is obvious that article 13.3 can also be applied before the five-year limit and that “dissimilar goods” condition is no longer required for the application of this article.

Unregistered trademark with a certain influence

The filing “preemptively by unfair means” can be found if the applicant of the litigious trademark definitely knew, or should have known, of the existence of the prior trademark. And, provided that sufficient evidence of prior use is adduced, the SPC considers that the burden of proof could be reversed onto the litigious trademark applicant.

BAD FAITH

In article 15.1 of the Trademark Law, the terms “agent” or “representative” should be construed widely and should include any persons having a kin or any specific relationship with such an agent, and even if negotiations have taken place without being concluded. Likewise, the term “other relations” used in article 15.2 of the law covers a wide range of circumstances, including family relationship, labour relation, business location in the proximity, and unconcluded negotiations.

Regarding the concept of “bad faith registration”, the SPC introduces two new ideas. First, in addition to the intentions at the time of filing, the court may also take into account the status of use of the litigious trademark and, therefore, facts that occurred after the date of filing. Second, where the reputation of the cited trademark is high, the court may presume that the litigious trademark has been filed in bad faith, unless the applicant can prove proper cause for such filing.

TRADEMARK USE

Revocation of the registered trademark based on three-year non-use will be refused if the used trademark has only a nuanced difference with the registered trademark, without changing its prominent features. Showing the intent to use through necessary preparation may serve as a “proper reason” for the mark not to be (yet) in use. However, the mere fact of signing an assignment of licence agreement, in the absence of actual use, is insufficient.

Paul Ranjard is of counsel at Wan Hui Da – Peksung Intellectual Property Group