Wing Wah Should Not Have Been Recognized as an Unregistered Well-known Trademark

Issue 26, By Han Ye,[Trademark]

Dongguan Intermediate People’s Court recently rendered a first instance judgment for Wing Wah Cake Shop Limited and Dongguan Ronghua Co., Ltd. (herein collectively, Wing Wah) in a trademark infringement and unfair competition dispute against Zhongshan Jinming and joint defendant Su Guorong. Su Guorong was dissatisfied and brought the case for appeal in the Guangdong High People’s Court (Docket No. (2007) YuGaoFaMinZhong #412), which is currently pending. As counsel for Su Guorong, I insist on the view that the Ronghua trademark used by Wing Wah should not have been recognized as an unregistered well-known trademark for the following reasons:

1. Su Guorong’s “Ronghua” trademark is legally valid. The first instance court’s recognition of Wing Wah’s trademark as an “unregistered well-known trademark” amounts to creating conflict of among the parties.

In this case, Su Guorong was the first to use the “荣华” trademark in respect to “sweets (candies) and pastries” in Class 30 and has secured a registration under No. 533357. These are the established facts found in various decisions of the State Administration for Industry and Commerce (SAIC), the Trademark Review and Adjudication Board (TRAB) and the Beijing High People’s Court. Therefore, the unquestionable lawful rights of Su Guorong to the “荣华” trademark should be respected and should not be deprived or restricted at will.

On July 1, 1991, Wing Wah applied for registration of the “荣华” trademark in respect of goods in Class 30 in the China Trademark Office (CTMO), which application was rejected in light of Su Guorong’s prior registration for the identical “荣华” trademark. The fact further showed that the CTMO in charge of the trademark ownership establishment only recognized Su Guorong ownership of an exclusive trademark right in Class 30, and Wing Wah does not have any right to use “荣华” trademark in Class 30. If Wing Wah continues to use the “荣华” trademark on the Chinese mainland, the use would constitute a typical act of infringement upon Su Guorong’s exclusive right to use the “荣华” trademark.

The trial court’s decision to recognize Wing Wah’s“荣华”as a well-known trademark when the mark has been denied registration by CTMO ignored the effect and existence of the registration held by Su Guorong, which not only conflicts with the trademark authorities’ decision, but also creates a controversy between the “exclusive right under trademark registration” and an “unregistered famous mark.”

2. Judicial rulings should be consistent; rulings that have entered into force and related to the subject case should be recognized as bases of the facts for the subject case.

While the case is being reviewed by the Guangdong High People’s Court the Beijing High People’s Court ruling, (2007) Administrative Final No. 107 has entered into force. The ruling confirmed that Su Guorong has an exclusive prior right to use the “荣华” trademark and upheld the fact that Wing Wah entered the Chinese mainland market later than 1991. However, in this case, the court of first instance ruled that Wing Wah entered the Chinese mainland market in 1987 and the “荣华” trademark had been well-known ever since 1991.

Over the same facts, different courts have made completely different decision, and no deference was given to the prior decision by the court in the latter case. If the appeals court affirms the ruling of the first instance court, a severe judicial nonconformity would arise on the basis of the same facts.

3. The well-known status of the Wing Wah’s “荣华” should be determined by the registration date of the Su Guorong’s “荣华” in 1990.

Wing Wah is a Hong Kong company, from a different jurisdiction. The mainland adopted a policy of “protection through registration”, different from Hong Kong’s “protection through use.”

Article 13 of the China Trademark Law provides protection of unregistered well-known trademarks, however, as for the case, the well-known status of the Wing Wah’s “荣华” should be determined on the basis of whether Wing Wah’s “荣华” had been “well-known” through use on the mainland especially prior to the registration date of the Su Guorong’s “荣华” trademark in 1990.

Based on the facts established by the aforesaid effective rulings, Wing Wah entered the mainland market in 1991; its “荣华” trademark was not used on the mainland prior to the registration date of Su Guorong’s “荣华” trademark, let alone being well-known status.

Though moon cakes bearing “荣华” trademark have built certain fame in Guangdong nowadays, objectively, the fame resulted from a combination of legal use of Su Guorong’s registered trademark and illegal use of Wing Wah’s “荣华” trademark. However, in the subject case, the current recognition of the Wing Wah’s “荣华” trademark should not be a basis of determining if the trademark was well-known on the Chinese mainland in 1990.

4. Wing Wah’s “荣华” does not qualify as a well-known trademark legally.

In view of marketing seasons of moon cakes and geographical discrepancies in Chinese diets, Wing Wah’s “荣华” trademark is still far from being a well-known trademark of “enjoying a high degree of fame and being widely known” on the mainland.

In addition, Wing Wah did not provide yearly sales invoices and tax payment receipts. A majority of evidential materials were promotions in Hong Kong, which were incapable of proving the mark has been well-known on the Chinese mainland.

5. One of the key points that the court should review is whether Wing Wah “intentionally created the disputes to get a certification of a well-known trademark”.

In accordance with relevant laws and regulations, certification of a well-known trademark is to strengthen protection of a well-known trademark, and judicially certified well-known trademark is meaningful only when the mark’s particular legal rights and interests have been infringed. These days, some enterprises lodge lawsuits primarily to get judicial recognition of a well-known trademark, rather than to protect its trademark rights from infringement.

In this action, Wing Wah, had brought the case to court, and simultaenously, lodged a lawsuit before the Dongguan Intermediate People’s Court to seek recognition of a well-known trademark, (2006) The Dongguan Intermediate Civil First Instance No. 34. The case has the same facts and grounds, adjudicating judges and time of opening court sessions as the subject case, additionally, the rulings are almost identical.

After obtaining favorable rulings from the courts of first instance in the subject case and case No. 34, Wing Wah held a special press conference and publicized the well-known trademark declaration using newspapers, the Internet and other media.

The above facts showed that Wing Wah sought to obtain judicial certification of a well-known trademark, instead of safeguarding its legal rights and interests, which has been an illegal act of intentionally causing disputes strictly forbidden by repeated promulgations from the Supreme Peoples’ Court. The court, as a judicial organ, should not connive with and stand behind companies in the unfair use of civil lawsuits and unfair acts in competitions against competitors.

Therefore, the Wing Wah’s mark“荣华”in my view, should not have been recognized as a well-known trademark in terms of Wing Wah’s motive for lodging such a lawsuit. The court should give deference to the rulings of the SAIC and the Beijing High People’s Court, and not cause conflicts of rights and recognize Wing Wah’s“荣华” as a well-known trademark in terms of safeguarding judicial uniformity, legal sanctity and uniformity between judicial and administrative rulings; Su Guorong is the legal right owner of a registered trademark and the court should not recognize “荣华”, an unregistered and illegally used trademark, as a well-known trademark in a bid to restrict legal rights of the real right holder Su Guorong in terms of protecting legal rights and interests of the parties and balancing public interests of the society.

About the author:

Han Ye is an attorney at law of Guangdong Top Sky Law Firm and defense counsel in the litigation.

(Translated by Wang Hongjun)

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