Dec. 2006(Issue 15)

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Well-Known Trademark Protection in China

Issue 15 By Grace Li,[Trademark]

1. Introduction

The definition of a well-known trademark is given in the Provisions for the Establishment and Protection of Well-known Trademarks where well-known trademark refers to a mark which is widely known to the relevant section of the public and enjoys a relatively good reputation in China.

In August of 1987, the Trademark Office identified the first foreign well-known trademark, Pizza Hut, in the opposing procedure for a registration application. In 1989, the Trademark Office identified the first Chinese well-known trademark, Tong Ren Tang, the trademark for a manufacturer of Chinese medicine. Since these first two, China has established such well-known trademarks as “NISSAN”, “BOSS”, “TISSOT”, “YSL”, “CARTIER”, “MCDONALD'S & M device”, “FORMULA 1”, “Shangri-La”, “Philips and 飛利浦”, and “Marlboro and 万宝路”, etc. among others. 

2. Framework of legal protection for well-known trademarks

Since December 1, 2001 when Chinese Trademark Law first confirmed the existence of well-known trademark protection, China has promulgated domestic legislation on well-known trademarks. Subsequently, there are Regulations on the Implementation of the Trademark Law, Provisions for the Establishment and Protection of Well-Known Trademarks, and several judicial interpretations issued by the Supreme Court providing further protection for well-known trademarks.

Before domestic legislations came into effect, trademarks were confirmed to be well known according to the international framework of the Paris Convention and the TRIPS Agreement.

1) International framework

The Paris Convention provides a protective principle for well-known trademarks in Article 6bis:

(1) The countries for the Union undertake … to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.

The TRIPS Agreement provides for enhanced protection of well-known trademarks in Article 16 (2) (3):

(2) Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In determining whether a trademark is well known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark.

(3) Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.

2) Domestic legal provisions of protection of well-known trademark

The Trademark Law revised on December 1, 2001 provides for  the explicit protection of well-known trademarks in Article 13, Article 14 and Article 41(2).

Article 13. Where a trademark in respect of which the application for registration is filed for use for identical or similar goods is a reproduction, imitation or translation of another person's well-known trademark not registered in China and likely to cause confusion, it shall be rejected for registration and prohibited from use.

Where a trademark in respect of which the application for registration is filed for use for non-identical or dissimilar goods is a reproduction, imitation or translation of the well-known mark of another person that has been registered in China, misleads the public and is likely to create prejudice to the interests of the well-known mark registrant, it shall be rejected for registration and prohibited from use.

Article 14. Account shall be taken of the following factors in establishment of a well-known mark:

(1) reputation of the mark to the relevant public;
       (2) time for continued use of the mark;
(3) consecutive time, extent and geographical area of advertisement of the mark;
(4) records of protection of the mark as a well-known mark; and
(5) any other factors relevant to the reputation of the mark.

Article 41(2). Where a registered trademark stands in violation of the provisions of Articles 13, 15, 16 and 31 of this Law, any other trademark owner concerned or interested party may, within five years from the date of the registration of the trademark, file a request with the Trademark Review and Adjudication Board for adjudication to cancel the registered trademark. Where a well-known mark is registered in bad faith, the genuine owner thereof shall not be restricted by the five-year limitation.

The Regulations for the Implementation of the Trademark Law effective as of September 15, 2002 provides the procedure to recognize well-known trademarks and legal remedies for well-known trademarks in Rule 5(1), Rule 45 and Rule 53.
Rule 5(1). Under the Trademark Law and these Regulations, where any party believes his trademark is a well-known trademark when a dispute arises in the course of trademark registration or trademark review and adjudication, he may file a request with the Trademark Office or the Trademark Review and Adjudication Board to recognize it as a well-known trademark, to reject the trademark registration application inconsistent with the provision of Article 13 of the Trademark Law, or to cancel the trademark registration inconsistent with the provision of Article 13 of the Trademark Law. When filing such a request, he shall submit evidences to prove that his trademark is a well-known trademark.

Rule 45. Where a trademark is used in contravention of the provision of Article 13 of the Trademark Law, an interested party may request the administrative authority for industry and commerce for prohibition of the use. When filing the request, the interested party shall submit proofs proving that his trademark is a well-known trademark. If the Trademark Office establishes it as a well-known trademark according to the provision of Article 14 of the Trademark Law, the administrative authority for industry and commerce shall order the infringer to cease the act of using the well-known trademark in contravention with the provision of Article 13 of the Trademark Law, confiscate and destroy the representations of the trademark. If it is difficult to detach the representations of the trademark from the goods, both the representations and goods shall be confiscated and destroyed.

Rule 53. Where a trademark proprietor believes that another person has registered his well-known trademark as an enterprise name, which is likely to deceive or mislead the public, he may file an application with the competent authority for the registration of enterprise names for cancellation of the registration of the enterprise name. The competent authority for the registration of enterprise names shall handle the matter pursuant to the Regulations for the Administration of Registration of Enterprise Names.

Effective as of July 24, 2001, the Judicial Interpretation of the Supreme People's Court on the Application of Laws for Trials of Civil Disputes over Domain Names of Computer Networks where Article 6 extends the protection of well-known marks to domain names. 

Article 6: A people's court that tries a domain name case may convict whether the related registered trademarks are famous, based on the parties' request or conditions.

Effective as of October 16, 2002, the Judicial Interpretation of the Supreme People's Court on Several Issues Relating to the Application of Law for Trials of Civil Disputes over Trademarks embellishes the judicial establishment of well-known trademarks as follows:

Article 1 The following acts constitute acts causing other harm to another’s exclusive right to use a registered trademark as set out in Item (5) of Article 52 of the Trademark Law:
(1)…
(2) reproducing, imitating or translating another’s registered well-known trademark or its main part and using it as a trademark on non-identical or dissimilar goods thereby misleading the public and potentially prejudicing the interests of the registrant of the well-known trademark;
Article 2 In accordance with paragraph 1 of Article 13 of the Trademark Law, where another’s non PRC-registered well-known trademark or its main part is reproduced, imitated or translated and used as a trademark on identical or similar goods, thereby easily resulting in confusion, civil liability to stop the infringement should be undertaken.
Article 22 Where a People’s Court is trying a trademark dispute case, it may, at the request of a party and in accordance with the actual circumstances of the case, make a determination in accordance with law as to whether the registered trademark in question is well-known.
Determination of a trademark as well known should be carried out in accordance with the provisions of Article 14 of the Trademark Law.
Where a party requests protection in respect of a trademark that has been previously been determined as a well-known trademark by administrative bodies or a People’s Court and the other party does not dispute the mark in question being well known, the court will not carry out any further examination.  If the other party does dispute the trademark being well known, the People’s Court shall carry out an examination in accordance with Article 14 of the Trademark Law.
In addition to the above, in June 2003, China published the Provisions for the Establishment and Protection of Well-known Trademarks, which is an administrative regulation on well-known trademark protection.
3. Special protection of well-known trademarks
Owners of well-known trademarks may maximize the degree of protection according to law without having to embark upon an expensive and impractical international and/or full goods/services filing program. The special protection in practice as well as the legislation thereof enables a well-known trademark owner to enjoy not only the protection extended to all goods/services but also the protection extended to other areas such as domain names and trade names . The privileged protection of a well-known trademarks in China includes:

1) Protection extended to other goods and/or services in addition to those for which a trademark owner wishes to use the trademark.
An ordinary trademark is protected only on the goods/services identical to or similar with the ones designated by the trademark registration itself. Protection of well-known trademarks unregistered in China only covers products that  are similar to the products on which the well-known trademark is used. Meanwhile, protection of well-known trademarks registered in China may be extended to other goods and/or services.

2) Availability of protection on non-registered trademarks.
Most of the well-known trademarks approved by Chinese authorities are registered in China. The trademarks “惠尔康” (Chinee characters of Hui Er Kang) and “小肥羊” (Chinese characters of little sheep) are two exceptions. In Fujian Xiamen Huierkang Ltd. vs. Fuzhou Weitalong Ltd., Beijing High Court held that Fujian Xiamen Huierkang Ltd. has been using “惠尔康” as a trade name since 1992 and has made huge expenses in advertisement for the brand in a vast geographical area for years before the other party, Fuzhou Weitalong Ltd., acquired the trademark registration for the brand. The court held that such advertisement made the goods under the brand name have a special relationship with Fujian Xiamen Huierkang Ltd., and thus “惠尔康” should be recognized as a well-known trademark. The court ruled that Fuzhou Weitalong Ltd.’s trademark registration should be removed and Fujian Xiamen Huierkang Ltd. should have the exclusive rights over the “惠尔康” trademark .

In another case of Inner Mongolia Little Sheep Catering Chain Service Co. Ltd. (appellee) vs. Inner Mongolia Huacheng Science & Trading Co. Ltd. (appellant), the appellee had been using the “小肥羊” as the trade name of the company for years in providing its catering services especially in hot pot cuisine. The trade name has become familiarized lots of consumers and the catering services provided by the company have been highly evaluated by many competent authorities. The Beijing High Court thus held that the brand was famous and that the appellant’s activity of fixing the brand to its hot pot flavorin productsg would mislead consumers as to the wrong source of the products and thus constituted unfair-competition to the appellee .   
 
As bad-faith registration is becoming an increasingly serious problem, the Chinese authorities have considered protecting the interests of the true owners of those non-registered trademarks. Recognition of “惠尔康” and “小肥羊” as well known trademarks are good examples showing the efficient protection conveyed to non-registered well-known trademarks .

3) In trademark dispute proceedings, a third party has to submit its claim within 5 years since the registration date of the disputed trademark while a well-known trademark owner has no such limit if the disputed trademark is registered in bad faith.

4) Well-known trademark protection extended to business names.
In Hong Kong Nipsea Holdings International Limited vs Wuhan Nippon Paint Co. Ltd, the plaintiff had the registration right over “Nippon Paint” trademark since 1993 and the defendant had used the trademark as trade name without authorization. In its decision, the Wuhan Intermediate Court ruled that “Nippon Paint” is a well-known trademark and held that, by making reference to the practice of anti-dilution in the field of trademark protection in the US , the defendant's behavior caused dilution of the “Nippon Paint” trademark.

5) Well-known trademark protection extended to domain names.
“Judicial Interpretation on Questions of Applicable Laws Concerning Computer Network Domain Name Related Civil Disputes” extends trademark protection to the environment of computer networks and increases judicial protection to well-known trademarks, and balances the interests of owners of domain names and owners of registered trademarks. It clearly stipulates that registering another's well-known trademark as a domain name for commercial purposes and 3 other kinds of conducts are prerequisite in determining malignity——. Thus, it provides more comprehensive protection to the legitimate interests of trademark owners.

In E. I. Du Pont De Nemours And Company vs. Beijing Guowang Information Ltd., the plaintiff was the rights holder over the "DU PONT" trademark and the defendant had registered "dupont.com.cn" as a domain name. In the Beijing No. 1 Intermediate Court’s decision, DU PONT was recognized as a well-known trademark. As any unauthorized commercial use of a well-known trademark as determined to be prejudicial to the interests of the trademark holder according to the Paris Convention, the Court thus ruled that the defendant should withdraw its domain name registration6.

4. Procedures to establish well-known trademarks
In determining whether a trademark is well-known, the authority may consider such factors as:
 The extent of public awareness of target trademark;
 The duration of use of the target trademark;
 The duration, extent of geographical scope and area of advertisement of the target mark;
 Protection record of the target trademark as a well-known trademark in China or other countries/regions, and
 Other factors such as production and sale over the last three years.

The trademark office, TRAB and the court have the power to identify well-known trademarks. This practice is quite different from the practice in other countries, where it is the court that has the final authority to identify well-known trademarks on a case-by-case basis. In China, the court does have the authority to identify well-known trademarks. However, it seems that the trademark office, specifically TRAB, has played a more important role than the court in this respect.

1) Administrative authorities
The Provisions for the Establishment and Protection of Well-known Trademarks sets forth the administration of well-known trademarks is vestd with the Trademark Office and the Trademark Review and Adjudication Board (TRAB), both of which are sub-departments of the State Administration of Industry and Commerce (SAIC). During 2004, SAIC reinforced the protection of foreign trademarks in the areas of trademark opposition, dispute and administration and confirmed 153 well-known trademarks, 125 of which belong to Chinese entities and 28 to foreign companies including 15 from the United States, 4 from France, 3 from the Netherlands, 2 from Switzerland, 2 from Britain, 1 from Germany and 1 from Italy. Among the 153 cases, 116 cases were recognized during the course of trademark administrative management conducted by AIC, 14 during the course of trademark opposition conducted before the trademark office and 22 during a trademark dispute before TRAB.  

 In trademark opposition proceedings, a trademark owner may request the Trademark Office to recognize its trademark as a well-known trademark in order to have the trademark office reject another’s trademark application on the ground of violating  Article 13 of the Trademark Law.

 In case of trademark disputes, a trademark owner may request TRAB to identify its trademark as a well-known trademark in order to remove another’s trademark registration on the ground of violating Article 13 of the Trademark Law.

 In trademark infringement disputes before AICs, a trademark owner may request the local AIC to recognize his mark as being well-known in order to enjoy the broader protection of well-known trademarks. If the local AIC hearing the case believes that the case involves one of the circumstances provided for in Article 13 of the Trademark Law, it will transfer the case to the Trademark Office. It takes the Trademark Office 8 months from the time of the trademark owner's filing a request for "prohibition of use" to decide whether a trademark is well-known or not.

2) Judicial channels
Higher or intermediate courts have jurisdiction to identify well-known trademarks in case involving trademark disputes upon the request of the parties concerned. From July 2001 to April 2005, there were 29 trademarks confirmed to be well-known through judicial proceedings, such as “DUPONT”, “Rolex”, “Nippon Paint” “safeguard/舒肤佳” and “沃尔玛”(Walmart in mandarin). The figure increasd to 71 in October 2005, and includes 9 well-known trademarks owned by foreigners. 

In addition to civil proceedings, it is possible to have trademarks approved as well-known in criminal proceedings. According to Article 61 of the Regulations on Prosecution Level of Economic Criminal Cases jointly issued by the Supreme People’s Procuratorate and the Ministry of Public Security in China, a person using a trademark that is identical with a registered trademark in respect to the identical goods without authorization shall be prosecuted if it is a well-known trademark or a mark used on medicines for the human body . 

When determining whether the trademark is well known or not, Chinese courts follow the principles set forth below.
 In addition to several basic courts, IP disputes involving the confirmation of well-known trademarks should be litigated in intermediate courts or higher courts.

 Rulings on well-known trademarks are issued when a petition is received and when it is necessary to the case itself. If determining whether the trademark is well known or not is not a precondition to issue a court decision, it is then unnecessary to make such a ruling. In Honda Motor Company vs. Chongqing Lifan Industry group Co. , the Beijing No. 2 Intermediate Court ruled in favor of Honda Motor by decreeing that the latter must cease using their name and pay damages to Honda Motor. The Court ordered a private motorcycle maker to pay RMB 1.47 million (about US$183,000.00) in damages to Honda Motor. With regard to the claim made by Honda Motor to confirm Honda as a well-known trademark, the court, however, held that the special protection over well-known trademarks does not apply to the undergoing case because both the goods used by the plaintiff and those by the defendant are motorcycles and thus it is unnecessary to grant special protection over the plaintiff’s trademark in this case.

 Ruling made on the well-known feature of a trademark is valid only for the current case and does not automatically extend the privilege to other cases. In other cases where the questioned trademark has been confirmed to be well-known previously, the trademark shall continue to be treated as well-known if the other party in the court proceedings neither raise counter argument about the well-known trademark nor submit evidence showing that the trademark is not well known.

5. Conclusion
Protection of well-known trademarks in China began in 1985 when China acceded to the Paris Convention. Over the years, China amended its domestic laws, such as the Trademark Law, and also introduced several new regulations or judicial interpretations on the level of protection of well-known trademarks. The relevant Chinese administrative and judicial authorities have accorded protection of well-known marks to quite a number of Chinese and foreign rights holders. Yet there is no specific standard that a trademark has to satisfy in order to be recognized as well-known. It is thus suggested, according to practical experience, to as much weight as possible on the extent and intensity of use of the trademark in advertising, and the actual or potential damage to be incurred by the counterfeiting of the marks.

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