The allure of celebrities—— the Jordan Trademark Case in China

2012/5/3Doris Li, China IP,[Trademark]

Maybe you are not a basketball fan and do not even watch basketball games, but surely you know who Michael Jordan is. Similarly, not everyone can appreciate Lady Gaga music, but who doesn’t know that she is one of today’s hottest stars?

Today, both stars and merchants have learned to make full use of the effects of stardom. In the beginning of 2012, news concerning the names of the celebrities became the focus of attention. As the competition in the market is becoming more and more intense, the influences that the celebrities have on consumers often equates to economic profit.

As a well-known NBA basketball player, Michael Jordan achieved many unrivaled accomplishments during his basketball career, and was therefore deemed as “the greatest basketball player of all time.” His outstanding leaping ability earned him the nickname of “Air Jordan.” He made his own contribution in promoting the NBA and making it another symbol of American culture being embraced around the globe, along with the Hollywood movies. He brought in at least 10 billion dollars for the NBA, and also helped Nike, Inc. (Nike) grow from a small company into one of the world’s leading suppliers of athletic shoes and apparel and a major manufacturer of sports equipment. For most people, Jordan was, is and will continue to be a super star in the basketball field. Recently, Jordan becomes the focus of Chinese people’s attention again, but it’s for a rather different reason.

 

Between Jordan and Qiaodan

In 2000, a sports equipment manufacturer in Southern China formally changed its name to Qiaodan Sports (Qiaodan). As it is known to all, Qiaodan (乔丹) is the common Chinese transliteration of Jordan. However, the company has never been authorized or supported by Nike or Jordan personally. In 2010, Qiaodan’s turnover reached 2.9 billion yuan. Therefore, based on earnings and the number of stores in China, the company has been listed as one of the top ten athletic apparel manufacturers. According to some reports, Qiaodan has recently been audited by the Shanghai Stock Exchange. It seems that the similarity between the company’s name and Jordan served not as a trouble maker, but a catalyst to the growth of the company.

However, as Qiaodan develops, there are more and more consumers paying attention to the relationship between Qiaodan and the famous basketball star.

If you search “乔丹官网” (the official website of Jordan/Qiaodan) with Baidu, you will be led directly to nike.com. However, if you search “中国乔丹” (Qiaodan/Jordan China), you will have to face all kinds of questions, such as “Is Qiaodan a Chinese brand?”, “Is Qiaodan a Chinese company?” or “What is the relationship between Qiaodan and Jordan?” These questions have confused quite a number of consumers. Some people just assume that since the Chinese writing and pronunciation are identical, Qiaodan must be a company operated by Jordan.

In January, a consumer filed a lawsuit against Qiaodan in Beijing Haidian District People’s Court of China, saying that when he made his purchase in a Qiaodan store, the Chinese company failed to state clearly in its advertising that the brand had nothing to do with the basketball star Michael Jordan, and therefore constituted misleading and defrauding consumers. The plaintiff held that the Chinese translations of Jordan’s last name, i.e. 乔丹and Qiaodan in Chinese pinyin are widely acknowledged by consumers. Therefore, the Chinese company’s activities related to selling athletic apparels under the trademark Qiaodan, while offering no information on the relationship between Qiaodan and Jordan, should be deemed as misleading. The similarity between Qiaodan and Jordan finally came to light.

In fact, not only the trademark “Qiaodan,” but also the logo of Qiaodan bears some similarity with the logo of Nike’s Air Jordan series: both of them adopted the form of a silhouette of a basketball player. The only difference between the two logos is that Qiaodan’s player is dribbling while Nike’s player is doing a slam dunk.

On February 21st, Jordan filed a lawsuit against Qiaodan in China, claiming that Qiaodan uses his name “deliberately and recklessly” without his authorization, which is misleading to the Chinese consumers. Jordan also opened an official website specifically for this case, and put on it a video of himself and an official statement. On March 1st, the Court formally accepted Jordan’s lawsuit.

“I’m very pleased that the Court accepted the lawsuit to protect the right of my name and the interests of consumers,” Jordan said in his statement issued on the same day. “The action I take is designed to protect my name right and brand. Any person is entitled to protect such rights. The Court’s acceptance of this case demonstrated that China also recognizes that name right is a right enjoyed by everybody.” Nike also expressed their support of Jordan’s legal action.

However, just as Jordan’s lawsuit is of swirling speculations in China, many insiders indicated that according to the media reports, the outcome of the Jordan case may not be optimistic. According to the analysis of Zhang Yucheng, attorney of the Dacheng Law offices, using celebrities’ names as trademarks is a rather controversial topic, and the focus is on the conflicts of the interest of a trademark and people’s name right. In this case particularly, the key is whether Qiaodan’s actions constitute infringements upon Jordan’s right of name.

Article 9 of China’s Trademark Law stipulates that “A trademark that is the subject of an application for registration shall have distinctive character and be capable of being readily identified and distinguished, and shall not be in conflict with the legal rights obtained earlier by other persons.” If there is indeed such a conflict, the disputed trademark may be revoked or fail to be registered.

So, is there a conflict existing between Jordan’s right of his name and the trademark “Qiaodan?” Some lawyers hold that the registration of Qiaodan’s trademarks “乔丹” and “Qiaodan” apply only the Chinese translation and pinyin of Jordan’s last name, rather than his full name Michael Jordan. Besides, Jordan is a foreigner, and as a result, whether his name should be protected by China’s Civil Law has yet to be decided. Meanwhile, there are also problems such as whether the common last name Jordan should be deemed as part of Michael Jordan’s name and therefore be protected. All these problems have made predicting the ruling of the case uncertain.

In the past, Nike also sued Qiaodan over trademark infringements. However, since the Trademark Review and Adjudication Board’s review decision on dismissing the application has taken effect, the opposed trademarks were approved for registration.

China IP interviewed Xu Changchun, Vice Dean of the IP School of Shanghai University on this topic. Prof. Xu remarked as follows: “China’s Trademark Law adopts the ‘first-to-file’ policy, which means that where two or more applicants apply for registration of identical or similar trademarks in respect of identical or similar goods, the application that filed the earliest shall be accepted and published. At the same time, the Trademark Law also stipulates that ‘a trademark that is the subject of an application for registration shall have distinctive character,’ i.e. there should not be identical or similar trademarks in respect of identical or similar goods. Since Qiaodan applied and registered its trademark ‘乔丹’ and ‘Qiaodan’ earlier than Nike, if Nike failed to prove its trademark ‘Air Jordan’ had already become well-known when Qiaodan filed the applications, the Trademark Review and Adjudication Board’s decision was totally in compliance with the law. Nike’s major mistake was that it failed to register trademarks similar to ‘Air Jordan,’ especially its Chinese translation ‘乔丹,’ earlier as a protective measure to its trademarks. By the time it became aware of the mistake, Qiaodan’s trademarks ‘Qiaodan’ and ‘乔丹’ had already developed into well-known trademarks.”

 

Jeremy Lin Has Been Registered as a Domain Name in China

The heated discussion around the Jordan case has not ceased and another similar case has popped up. As a basketball rookie, Jeremy Lin soon became the talk of the town in China. As his popularity and market value increase, the price of trademarks and domain names including his Chinese name Lin Shuhao (林书豪) also grows.

The first domain name that attracted people’s attention is the one using the pinyin of Jeremy Lin’s Chinese name—www.linshuhao.com. When you enter this web, you will see, instead of the latest news of Jeremy Lin, the striking line that reads: “This domain name is for sale!” Above it there is also an advertisement as follows: “According to the reports on the website of Forbes, Jeremy Lin has become the fastest growing brand name around the world, which is worth about 14 million dollars. Forbes said that the brand value of Jeremy Lin has been as high as Kobe Bryant, player of the Los Angeles Lakers, ranking the sixth among athletes worldwide.”

Some reporters tried to contact the Guangdong seller over the phone and were told that “There are already people offering 26 million yuan for the domain name, so if you want this domain name, come up with a reasonable price.” The seller also stated that “When I registered the domain name, the cost was, of course, very little, but now it is another story. There are many people rushing to buy it. And the maintenance fee is very cheap, only about 60 yuan annually.”

Meanwhile, the “Lin Shuhao” trademark was registered successfully as early as August 2011. According to a survey, a sports items manufacturer in Wuxi, Jiangsu successfully registered the trademark of “Jeremy S.H.L 林书豪” in 2011 at the cost of only 4,460 yuan. The business owner said that she had watched Jeremy Lin playing basketball in 2010, and judged solely by experience that he would have a bright future. Therefore, she registered the above-mentioned trademark purely as a commercial activity.

On February 13th, Jeremy Lin himself also applied for the trademark “Linsanity” and submitted an application fee of 1,625 dollars. It is understood that the applied trademark covers all varieties of clothing, including under clothing, action dolls, drinks and backpacks and so on.

According to the Chinese laws, under current circumstances, if Jeremy Lin decides to use the trademark “Lin Shuhao” to enter the Chinese market in the future, he will still need the authorization of the Wuxi trademark holder.

Taking into account the long-term development of enterprises, trademarks such as Qiaodan and Lin Shuhao surely indicate legal troubles since there are flaws in the trademark right of both marks. The trademark “Qiaodan” is registered by law; however, it does have a potential link with Michael Jordan. According to the Trademark Law, the distinctive character of the trademark “Qiaodan” is relatively vulnerable so that the protection strength of the said trademark may be affected. The only measure for Qiaodan to strengthen its trademarks and avoid the potential risks is to improve the distinctiveness of its trademarks through outstanding management of the company and making the trademarks well-known. Qiaodan’s emphasis that its trademarks are by no means related to Air Jordan, the famous basketball player is just one of the approaches it has taken for improving the distinctiveness of its trademarks.

While the trademark “Lin Shuhao” is not backed by corresponding products, the value of the mark can only be achieved from the assignment and authorization of the trademark.

 

The Phenomenon of “Chasing Celebrities”

On January 18th, 2012, the American pop icon Britney Spears filed a lawsuit in China against the China Administration for Industry and Commerce Trademark Review and Adjudication Board at the Beijing No.1 Intermediate People’s Court (Court). The reason was that Britney found her name registered as a trademark in China. Britney held that such a registration was in bad faith and therefore should be removed. In the complaint, Britney said that as one of the hottest female singers in the world’s pop music field, her name “Britney” was well-known to Chinese consumers. However, Shenzhen Wan Fu Da Trading Co., Ltd. (Wan Fu Da), the third party in the case, registered her name “Britney” as a trademark in China without her authorization, aiming at obtaining allegedly illegitimate interests by her popularity. Therefore, according to the complaint, Wan Fu Da’s action constituted serious infringement upon her right of name.

At trial, the Court found that the disputed trademark “布兰妮BRITNEY” was first applied in August 2001 by Wan Fu Da and was approved to be registered on January 28th, 2004. The use of the trademark was limited to clocks and watches. After the hearing, the Court held that the evidence provided by Britney was not sufficient to prove that her name had already become well-known to Chinese consumers when Wan Fu Da applied for the trademark. Therefore, her name “Britney” should not be subject to the protection of well-known trademarks according to China’s Trademark Law. As a result, the Court dismissed the claims of Britney Spears in its ruling.

The Japanese singer Namie Amuro is also caught in the same situation as Britney. Her name has already been registered as the trademark of a Chinese costume company. Chinese stars are not able to escape the fate of being registered as well. By now, their names have been registered as trademarks which cover a wide range of categories such as cosmetic products, food, bags and even antidiarrheal medicine. “Andy Lau” became a sausage trademark while “Jackie Chan” has unfortunately been registered by a company producing coffins.

According to China’s Trademark Law, a celebrity’s name is not included in the eight situations in which a trademark cannot be registered. That is to say, the law does not prevent the registration of a celebrity’s name as a trademark. Although China has relevant provisions in respect to the registrations of trademarks, the problems cannot be removed from the preliminary examinations. According to the provisions of the Trademark Law, if no opposition is filed during the opposition period (3 months), or the opposition is overruled, the registration of the trademark shall be granted. A registered trademark can be used or licensed.

Upon these provisions, Prof. Xu made the following remarks: “Article 9 of the current Trademark Law stipulates that ‘The trademark for which an application for registration is filed shall have distinctive characteristics easy to identify, and should not conflict with the legal rights acquired by others in priority’; Article 31 stipulates that ‘Anyone applying for trademark registration may not damage the existing rights of others obtained by priority, neither may he register, in advance, the trademark that has been used by others and has become influential.’ The right of name is surely included in ‘the legal rights acquired by others in priority’ and ‘the existing rights of others obtained by priority.’ Thus, there’s essentially no loophole existing in the Trademark Law.

Of course, when filing an application, the applicant usually refers to the Chinese translation of a foreign name or adopts a word with similar pronunciation with a Chinese name. In these situations, the grant of the trademark should be decided according to the provisions in Article 10 (8): ‘Those (trademarks) detrimental to socialist morality or customs or having other harmful influences’ should not be registered. Therefore, I assume there is no hole in the law with respect to the registration of celebrities’ names as trademarks. However, taking into consideration the complexity of the prior rights and the balance of rights between the applicant and the prior rights holder, modifications on Article 31 should be considered.”

(Translated by Monica Zhang)

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