Yan WANG
Chinese Attorney-at-Law

 
Introduction

The soul of a trademark lies in its use, and the way a trademark is used is particularly important, as non-conforming or improper use will bring many risks. This article is intended to briefly sort out and summarize the risks associated with the use of discretionally changed registered trademark under the current trademark law in combination with case studies.

I. Limitations on the change of the registered trademark sign

The exclusive right to use a registered trademark is confined to the approved registered trademark sign and the goods approved for use, and its use should comply with the regulations. In practice, however, discrepancies between the trademark in actual use and the registered trademark frequently occur. So, what does “discretional change of the registered trademark” refer to?

According to the Trademark Examination and Review Guidelines, “discretional change of the registered trademark refers to alteration of the trademark’s words, devices, letters, numerals, three-dimensional shapes, color combinations, etc., by the trademark registrant or a licensed user at their discretion in the actual use of the registered trademark, which results in a change of the main parts and distinctive features of the original registered trademark. The changed sign is easily considered not to be identical when compared with the original registered trademark.” Meanwhile, according to Article 26(2) of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Administrative Cases on Trademark Right Granting and Confirmation, where the trademark sign in actual use differs slightly from the registered trademark sign but its distinctive features remain unchanged, it could be regarded as the use of the registered trademark.

It can be seen that whether it constitutes the use of the registered trademark, the key lies in whether it changes the distinctive features of the registered trademark. Once the distinctive features of the registered trademark have been changed, it may lead to the infringement of others’ trademark rights, or even cause the unfavorable consequences of their own registered trademark being cancelled.
 
II. Trademark infringement risk

According to Article 1(2) of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Civil Cases Involving Conflicts Between Registered Trademarks, Enterprise Names and Prior Rights, “Where the plaintiff files a lawsuit on the ground that the registered trademark used by another person on the approved goods is the same as or similar to his or her prior registered trademark, the people’s court shall, in accordance with the provisions of Article 124 (3) of the Civil Procedure Law, inform the plaintiff to apply to the relevant administrative authority for resolution. However, if the plaintiff brings a lawsuit claiming that another person uses his or her registered trademark beyond the scope of the approved goods or in a form of changing the distinctive features, splitting or combining the elements, rendering it being identical or similar to the plaintiff’s registered trademark, the people’s court shall accept the lawsuit.”

After the applied-for trademark is approved, the trademark registrant is entitled to use the registered trademark based on the exclusive right as regulated. Generally speaking, if another party files an infringement lawsuit based on the fact that the used registered trademark is identical or similar to his prior registered trademark, the court will not directly determine whether the use of the registered trademark constitutes an infringement if the registered trademark is valid, but rather will inform the plaintiff to solve the dispute by administrative procedures, in which the administrative authorities will first determine the validity of the registered trademark. Only if the prior registered trademark is a well-known trademark, the court may directly accept the lawsuit and make a judgmentⁱ. However, if the trademark registrant does not use the registered trademark as regulated, and discretionally changes the registered trademark sign, it may fall into the exceptions stipulated in the proviso part of the aforementioned article. When the changed sign is prone to be confused with a previously registered trademark, it is likely to constitute infringement, and even if the trademark user defends that it is a registered mark, the defense is not likely to be upheld.

For example, in FOTILE’s trademark infringement and unfair competition caseⁱⁱ, the defendant registered the trademark No. 1555572 “”, it however did not use the trademark in strict accordance with the registered specimen, but rather used the word “Fangtai” separately or prominently. The court held that the way of its use changed the features of its own trademark, which could easily lead to the relevant public mistakenly believing that it was related to FOTILE company, and which fell into the scope of protection of the trademark right of FOTILE company involved in the case.

III. Risk of the cancellation of registered trademark

According to Article 49 of the Trademark Law, where a trademark registrant discretionally changes the registered trademark in trademark use, the trademark administrative authority shall order the party to make corrections within a certain period of time, and if the party fails to make corrections after the expiration of the period of time, then the Trademark Office shall cancel the registered trademark. In addition, if a registered trademark is not used for three consecutive years without justified reasons, any entity or individual may apply to the Trademark Office to cancel the registered trademark.

In the administrative litigation of trademark cancellation review case concerning NetEase’s No. 10908297 “”ⁱⁱⁱ, the trademarks reflected in the use evidence submitted by NetEase were “印像拍” and “印像派”. The Court held that the actually used signs differed from the disputed trademark in terms of the composing characters, the overall visual effect, and the pronunciations and they were found not to be identical. In view of the fact that NetEase also registered the trademark “印像派”, the evidence in the case only proved NetEase’s use of other trademarks and signs, which could not be regarded as evidence of the use of the disputed trademark, so the registration of the disputed trademark should be cancelled. It can be seen that using the changed trademark sign may not constitute the use of the registered trademark in the sense of the exclusive right to use the registered trademark, which may lead to the risk of the registered trademark being cancelled.

However, given that the non-use trademark cancellation system is not a punitive mechanism, and its legislative intention is to activate trademark resources and clean up idle trademarks. Compared with the judgment criterion adopted in trademark infringement cases, a more lenient one usually is adopted in the case regarding the changed distinctive features of trademarks, which is more inclined to maintain existing trademark registrations as far as possible. In the case that the trademark use evidence does not clearly direct to other registered trademarks, even if the use of registered trademarks in the form of splitting and combining the elements thereof, it may be deemed as not changing the distinctive features of the trademark, and thus the registration may be maintained.

For example, in Trademark Cancellation Case No. 1495769 “”^iv, the trademark in actual use were “匠人组合ARTISAN ASSOCIATION”, and the device element of the disputed mark, which was used separately from the word element of the registered specimen. The Court held that, although the actually used trademark sign differed from the disputed sign to a certain extent, it contained “匠人”, “ARTISAN” and the device of the disputed sign, and did not change its distinctive features. In addition, as there is only one trademark in Class 42 under its registrant’s name, i.e. the trademark in question, the use of the said sign can be regarded as the use of the disputed trademark.

Moreover, such criterion is not exclusive to litigation cases, but is often applied in adjudication cases as well. In trademark cancellation review cases^v of No. 16796870 “”, No. 6218421 “”, No. 4994311 “”, and No. 1322293 “”, their use by splitting, adding, deleting or changing the constituent elements of the trademarks were found not to have changed the distinctive features of the trademarks, and the validity of the use evidence of the relevant trademarks was recognized.

Although a more lenient criterion is applied in trademark cancellation cases, if the changed trademark sign is likely to cause confusion with a prior trademark, the act of trademark use may lose its legitimacy because it infringes on the trademark rights of another party. If the use has already been found to be infringing by the court in a civil lawsuit, the validity of the use evidence will not be recognized, which will also affect the judgment criterion in the trademark cancellation case, resulting in the risk of the registered trademark being cancelled.

Summary

In summary, using the changed registered trademark not only carries the risk of infringing on the trademark rights of others, but may also lead to the risk of cancellation of the registered trademark. For trademark registrants, it is necessary to use registered trademarks as regulated, not to arbitrarily split or combine trademarks or change the distinctive features of trademarks, and to maintain the consistency with the registered trademark sign as far as possible.

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ⁱ Interpretation of the Supreme People’s Court on Several Issues concerning the Application of Law in the Trial of Civil Cases Involving the Protection of Well-Known Trademarks
ⁱⁱCivil Judgment (2020) Zhejiang Civil Final No. 1181 by The High People’s Court of Zhejiang Province(Top 10 Judicial Protection Cases of Intellectual Property Rights in Zhejiang province in 2020)
ⁱⁱⁱAdministrative Judgment (2020) Beijing No. 4759 by Beijing Intellectual Property Court
^ivAdministrative Judgment (2021) Beijing Administrative Final No. 8570 by The High People's Court of Beijing Municipality
^vDecision on Trademark Cancellation Review Case concerning TM Review [2022] No. 0000353791, TM Review [2017] No. 0000166633, TM Review [2021] No. 0000165345, TM Review [2022] No. 0000355148