Filing a Design Patent Application for the Similar Subject Matter of an Existing Registered Trademark is Non-Infringement

2010/5/5Liu Xiaojun, China IP,[Patent]

The protection of intellectual property rights is an exception to free competition. To seek protection, one should respect the prior legal rights of another. For example, the Trademark Law of the People’s Republic of China provides in Article 31 that, “One shall not apply for trademark registration by damaging any existing prior right of another, nor squat by any unjustified means any trademark that another has been using, which has achieved certain influence.” The Patent Law of the People’s Republic of China provides in Article 23 that, “Any design for which patent right may be granted … must not be in conflict with any prior right of any other person.” The application for a design patent which is the subject matter of another’s existing trademark registration, if the design patent falls in a different class than the existing trademark registration, and the mark has not attained well-known status, cannot constitute an illegal act per se. This is because neither the act of filing for the application or of practicing one’s patented design does not infringe upon the existing mark, nor does it amount to unfair competition. Judicial opinions do vary significantly, however, over whether the filing of a design patent application, covering the subject matter of an existing trademark registration for the same or similar products, constitutes an infringement by itself.


I. The Early views: it is Infringement should be found


In earlier judicial practice, the very act of filing a design patent application for the same or similar subject matter under an existing trademark registration, regardless of whether the patent has been practiced or any product has been marketed under the patent, was found to be infringing


In Louis Vuitton Malletier v. Wang Jun, case involving a dispute over the exclusive trademark use right, the plaintiff, Louis Vuitton Malletier, was the registered owner of the trademark “.” The trademark had been approved for use on travel bags, lady’s small handbags and shopping bags. Defendant, Wang Jun, used a combination of text and graphics identical with that of the plaintiff’s trademark and filed an application for a design patent entitled “handbag.” Plaintiff argued that the products for which the defendant filed the design patent application were identical or similar to the goods for which the trademark of the plaintiff had been approved. Once launched onto the market, the design patent of the defendant would cause irreparable damage to the trademark of the plaintiff. Therefore, the design patent application by the defendant infringed upon the right to exclusive use of the trademark by the plaintiff. The plaintiff requested the court to order the defendant not to exploit the design patent. At trial, the court found that the defendant’s design was for handbags, and the plaintiff’s trademark registration covered travel bags, lady’s small handbags and tote bags in Class 18, both being similar goods. The defendant’s design, since it contained an identical or similar appearance as that of the plaintiff’s mark, which constituted the main portion of the design, would be very likely to cause confusion among consumers, once placed into the stream of commerce, as to mislead consumers into believing that the design product was from the plaintiff. Hence, the defendant’s design constituted a conflict with the plaintiff’s trademark registration. Though not actually used by the defendant, the design patent that the defendant applied for was intended to be launched onto the market. To prevent any use of the design patent by the defendant from encroaching upon the exclusive trademark use by the plaintiff, the design patent application by the defendant was determined as constituting one of the “other acts of infringement upon the right to exclusive use of the registered trademark” in Article 52(5) of the Trademark Law. Therefore, the court enjoined the defendant’s use of the design patent.


Dissatisfied with the decision at trial, Wang Jun appealed to the Higher People’s Court of Beijing. In the second instance, the Court confirmed that the travel bags, backpacks, handbags, shopping bags or briefcases, etc., for which the registered trademark of the plaintiff had been approved had functions, uses, intended consumers and marketing channels identical with those of the handbags for which the design patent of the defendant was applied, and the two should be determined as similar. The highlighted text and graph in the main view of the product for the design patent were identical with those of the registered trademark of the plaintiff, which served to identify the source of the product. It constituted a use of the registered trademark of the plaintiff on identical or similar products. Although no evidence showed that Wang Jun had actually launched any product using the design patent onto the market, once he did, unavoidably, it would cause confusion among the relevant public and infringe upon the exclusive use of the trademark by the plaintiff. Therefore, the decision of the first-instance trial court was upheld. In similar litigations thereafter, the same court has made similar judgments.


II. The recent view: it is not infringement


Although earlier judicial practice clearly stated that using a prior trademark of another and applying for a design patent for identical or similar products constituted infringement, the dispute over this issue has not been fully resolved by those judgments. A rethinking has been going on in the judicial practice over whether the determination is proper. Recently, the court has made contrary determinations in similar judgments.


In Louis Vuitton v. Guo Biying for infringement of exclusive trademark use right, the plaintiff, Louis Vuitton, was the owner of the registered trademark “.” The trademark had been approved for toys, checkers, backgammon games and golfing gloves. The defendant used “LV” as the main element of design and applied for a design patent named “Mahjong (23).” The plaintiff argued that the design patent application by the defendant infringed upon its right to exclusive use of the trademark and brought an action to court. The No. 1 Intermediate People’s Court of Beijing followed the thinking in the earlier judgments for similar cases and held as follows: The “Mahjong (23)” for the design patent of the defendant was similar to the checkers, et al for the trademark of the plaintiff, as they were close with respects to function, use, producer, marketing channel and intended consumer. The Mahjong product for the design patent application of the defendant was cubical and no different from the common mahjong product except for the main view which contained the “LV”, a text and graph combination. This combination of “LV” text and graph of the defendant, in the same way as the trademark of the plaintiff did comprised the LV letters printed over each other and the graphical design was basically the same. Under the circumstance, the relevant public would mistake the product using the design patent of the defendant as the product of the plaintiff, which would damage the plaintiff’s right to exclusive use of the trademark. The design patent of the defendant conflicted with the exclusive trademark use right of the plaintiff. Though not actually used, the design patent that the defendant applied for was intended for marketing use. Once the products carrying the design were launched onto the market, they would cause damage to the exclusive trademark use rights of the plaintiff. The design patent application by the defendant was one of the “other acts of infringement upon the right to exclusive use of the registered trademark” in Article 52(5) of the Trademark Law. Therefore, the court judged that the defendant should not exploit the design patent concerned.


Dissatisfied with the first-instance judgment, Guo Biying appealed to the Higher People’s Court of Beijing. In the second instance trial, the court held as follows: To infringe upon the right to the exclusive use of a trademark generally meant to illegally use the trademark of another, while to use a trademark mainly meant to use the combination of the trademark and specific goods before the consumers. To use a mark or marks identical or similar to a trademark of another and apply for a design patent was not an act to illegally use the trademark before the consumers on the market. It was, in and by itself, not an infringement upon the exclusive trademark use. That the appellant filed an application for the design patent did not infringe upon the exclusive use of the trademark. It was obviously inappropriate for the first-instance court to judge that the design patent application by the appellant infringed upon the exclusive trademark use owned by the appellee. However, the design patent application by the appellant did not infringe upon the exclusive trademark use of the appellee. No evidence showed that the appellant had actually used the design patent, the trademark of the appellee did constitute a prior legal right for the design patent concerned, the product carrying the design patent was similar to the “checkers” et al approved for the trademark of the plaintiff, and the main elements of the design were similar to those of the trademark. Once the design patent was used or the product carrying the design was launched onto the market, the relevant public could reasonably mistake the product with that of the plaintiff’s, which would damage the exclusive use right of the plaintiff to the trademark. Therefore, the design patent application conflicted with the exclusive trademark use by the plaintiff. The original trial court was proper to conclude that the defendant should not exploit the design patent.


III. The view of this article: it is not infringement


To use a registered trademark of another and apply for a design patent, the application, in and by itself, is not a use of the trademark as defined within the literal definition of the Trademark Law, nor an infringement upon the trademark. So, we should affirm the recent view from the judicial practice. However, the prior trademark does constitute a prior right to the design patent and a conflict of rights occurs between the two. If the owner of the prior trademark believes that the design patent application infringes on its legal rights or interests, it may seek the protection of the unfair competition laws or request the court to revoke the design patent.


(I) Applying for a design patent does not constitute the use of a prior registered trademark of another within the meaning of the Trademark Law


A trademark is an indication of the source of goods or services. It should contain at least three elements; namely the trademark specimen, the goods or services that the trademark is directed to, and the commercial connection between the two. Physically, a trademark comprises the trademark specimen and the specific goods or services. These two elements are the physical elements of the trademark. The material transformation of the trademark specimen into an object of a trademark right does not occur until a relatively stable connection is established between the trademarks and until the goods or services and this connection can be perceived by the people, that is, the consumers. In other words, this third element exists only after the public or consumer can associate the trademark to the goods or services that the trademark is directed to. Therefore, the trademark specimen and the goods or services that the trademark is directed to makes the physical basis of the trademark. The commercial connection between the trademark specimen and the goods or services is the soul of the trademark. If any one of the three elements is lacking, the remaining two are insufficient make a trademark.


A vast majority of trademark infringements involve the use of the trademarks of others within the meaning of the Trademark Law. The infringement by using a trademark of another is also called the use-based trademark infringement. The use of a trademark within the meaning of the Trademark Law, referred to as “trademark use,” means to use the trademark specimen within the meaning of the Trademark Law, that is, to use the specimen on goods or services. Generally, trademark use should cover all the three elements of a trademark. It will cause the consumers not only to see or think of the specimen, but also associate the specimen with the goods or services approved for the trademark. Therefore, it can be said that any use of a commercial specimen which can cause the consumers to associate the specimen with specific goods or services is trademark use. Trademark use can be legal or infringing. It is legal if the use of the trademark on specific goods or services is permitted by the owner. It is illegal if the use of the trademark on specific goods or services is no permitted by the owner. The use-based infringement can be to use a mark identical or similar to a trademark of another, or to employ a trademark of another on goods or services identical or similar to those approved for the trademark.


Trademark infringement mostly means to use a trademark of another within the meaning of the Trademark Law. “The act that basically constitutes infringement upon the exclusive trademark use is to use a mark identical or similar to the trademark in its meaning as a commercial mark, that is, to use the allegedly infringing mark must be to use it in the meaning of a trademark; in other words, the allegedly infringing mark must be used as a trademark which indicates the source of goods or services. Even though identical or similar to a registered trademark of another, a mark of text or graph or combination of the two does not serve to differentiate the source of goods or services, that is, it is not used as a trademark, this is not a use within the meaning of trademark and will not encroach upon the exclusive trademark use of another.” It is not a trademark infringement to use a trademark of another NOT within the meaning of the Trademark Law, unless specially provided for in the law. The forging or unauthorized manufacturing of the specimen of a registered trademark of another or the selling of such specimen so forged or manufactured is only using the trademark specimen. The act itself is not directed to any specific goods or services, that is, it does not use the trademark of another in the meaning of the Trademark Law. Despite this, it still constitutes infringement, according to the special stipulations of the Trademark Law. If not expressly stipulated in the law, it would be improper to expand the extension of the non-use-based trademark infringement.


(II) To use a prior registered trademark of another and apply for a design patent does not directly damage the directedness of the trademark


The directedness of a trademark is to describe the connection between the trademark and specific goods or services. A trademark is a mark used on specific goods or services. During its use, it will generate special directedness, that is, it is directed towards the goods or services that often use the trademark. This directedness is often represented by the recognition of the relevant public or the consumers, that is, the relevant public or the consumers, when seeing or perceiving a certain trademark, will associate it with the goods or services that use the trademark. As a result, the trademark comes to have directedness, that is, the trademark is directed towards specific goods or services. A reputable trademark encourages consumers to purchase specific goods or services to the benefit of the owner. It is in this sense that the trademark right becomes a property right.


All trademark infringements should be directed to the connection between trademarks and specific goods or services. In other words, all of them should have damaged the directedness of the trademarks by means of confusion, dilution or obstruction. To use a mark identical or similar to the registered trademark of another on products identical or similar to that approved for the registered trademark confuses the function of the registered trademark to refer to the goods or services of the owner of the registered trademark. It causes the consumers to mistakenly refer the trademark to the goods or services of the infringer. The confusion results even if the infringing goods or services are of better quality that those of the trademark owner. To forge or manufacture without authorization the specimen mark of a registered trademark of another or to sell the specimen mark so forged or manufactured does not directly damage the directedness of the registered trademark, but considering that the specimen mark so forged, manufactured or sold can well be used by others on the products identical or similar to those approved for the registered trademark, such forging, manufacturing or selling act, once effected, must constitute infringement and damage the directedness of the registered trademark. For this sake, the Trademark Law specially provides that it is infringement to forge or manufacture without authorization the specimen mark of a registered trademark of another or to sell the specimen mark so forged or manufactured.


(III) The native characteristics of the design patent application determine that the design patent application is not trademark infringement


First, the design patent application is relative, in which the applicant requests a specific authority to grant a patent for a design. The legal relationship generated from the application generally contains only two subjects of relativity - the applicant and the specific authority. The applicant can expect one of two outcomes - the patent is granted or not granted. Whether the patent is granted or not granted, often has no bearing on the social public or consumers. To use a registered trademark of another to apply for a design patent does not cause the consumers to confuse or mistake the registered trademark.


Second, the design patent application will not damage the directedness of a prior trademark. The directedness of a trademark is characteristic to the trademark, which indicates specific goods or services. To apply for a design patent is a relative act, and generally the consumers of the goods or services will not pay attention to a design patent application. Even if they do, the applicant does not obtain the design patent until the publication procedure is done. A specific authority will publicize the design patent application and the status of the rights. Anyone who pays attention to the design patent application will be able to identify the status of the rights for the application from the publication. Generally, the design patent application will not go so far as to effect confusion with a trademark of another, nor damage the directedness of a prior registered trademark of another.


Third, the design application is not trademark use. Trademark use means to use a trademark within the meaning of the Trademark Law and in the full sense of trademark, which will cause the consumers to perceive the connection between the trademark and specific goods or services. The design patent application is an act limited to the applicant and the specific authority. It does not turn to the consumers on the market and therefore, is irrelevant for the directedness of a trademark. It is not an act of using a trademark of another in the meaning of the Trademark Law. Moreover, to apply for a design patent is not to exploit the patent, nor to infringe upon a trademark under any special stipulations in any law. Therefore, to use a trademark of another and apply for a design patent, in and of itself, is not an infringement upon the trademark.


To sum up, to use a registered trademark of another and apply for a design patent is not to infringe upon the registered trademark. However, if the design patent contains a design identical or similar to that of a prior trademark, of if the products for the design patent application are identical or similar to the goods or services approved for the prior trademark, the court can conclude a conflict of rights occurs between the two or even issue an order to prevent the design patent applicant from exploiting the design patent. But, it would be inadvisable for the court to directly judge that the design patent application infringes upon the prior registered trademark. Also, it should be noticed that if one uses a prior registered trademark of another and applies for a design patent for goods or services identical or similar to those approved for the registered trademark and thereafter, exploits the design patent, the exploitation may infringe upon the registered trademark, but this does not cause the design patent application to transform into trademark right infringement.

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