Keli ZONG
Attorney-at-Law
Chinese Trademark Attorney
Wei Chixue Law Firm
Attorney-at-Law
Chinese Trademark Attorney
Wei Chixue Law Firm
Abstract
In trademark grant and confirmation cases, prior trade name rights, as “prior rights” stipulated in the first paragraph of Article 32 of the Trademark Law, can block the registration of subsequent trademarks when certain legal elements are satisfied. Based on judicial precedents in recent years, this paper briefly analyzes the boundaries of the scope of goods and services for which prior trade name rights can be protected. These boundaries are not entirely consistent with the similarity of goods and services specified in the Classification of Similar Goods and Services, revealing certain differences in judgment between the administrative and judicial stages.
Keywords
Trademark Grant and Confirmation; Trade Name Right; Right Conflict; Scope of Goods and Services; Similarity
Trademarks and enterprise names are indispensable commercial signs for market entities engaging in business activities. The former are used to distinguish the source of goods or services, while the latter point to specific business entities. When the same characters are registered as trademarks or enterprise trade names by different entities, right conflicts often arise. Especially with the increasing popularity of e-commerce, the geographical scope of the use of trademarks and enterprise names has easily broken through the geographical limitations of the “offline shopping” era. In addition, the trend of diversified operations of large enterprises is constantly strengthening, making the boundary between trademark rights and enterprise name rights increasingly blurred. Against this background, clarifying the boundary between these two rights is particularly important.
In practice, the rights and interests of enterprise names embodied in the form of trade names are often referred to as “trade name rights”, “commercial firm rights” or “commercial firm interests”. For the convenience of expression, this paper uniformly uses the term “trade name rights”.
In trademark grant and confirmation cases, if a subsequently applied for or registered trademark conflicts with another party’s prior trade name right, the holder of the prior trade name right may, in accordance with the first paragraph of Article 32 of the Trademark Law, file an opposition or invalidation against the trademark on the ground that it infringes the prior trade name right.
This paper attempts to combine typical cases in recent years to discuss the boundaries and influencing factors of the scope of protection for goods and services covered by prior trade name rights in such cases, aiming to offer practical reference for readers.
I. Raising of the Issue
When a subsequent trademark right conflicts with a prior trade name right, the prior trade name right does not inherently entitle its holder to prevent the registration of an identical or similar trademark. Article 21 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Administrative Cases Involving Trademark Grant and Confirmation [Law Interpretation (2017) No. 2] stipulates: “Where the trade name claimed by a party has a certain market reputation, and another party applies for the registration of a trademark identical or similar to the trade name without permission, which is likely to cause relevant public confusion about the source of goods, the people’s court shall support the party’s claim that it constitutes a prior right.” It can be seen that one of the legal elements for a trade name right to obtain protection is that “it has a certain reputation through prior use”. Therefore, in such disputes, the burden of proof regarding the reputation of the prior trade name right is crucial.
However, is it sufficient to prevent the registration of a subsequent trademark as long as the reputation of the prior trade name right can be proven? The answer is obviously negative. Then, where is the boundary of the scope of goods or services that can be blocked?
Some scholars have pointed out that the scope of rights of an enterprise name right is geographically relative, that is, the scope of rights should be determined according to the degree of its reputation1.
The Guidelines for Trademark Examination and Adjudication clearly stipulates that “the protection of a prior trade name right shall, in principle, be limited to goods or services that are the same as or similar to the goods or services actually operated by the holder of the trade name right. However, in individual cases, the scope of protection of the prior trade name shall be specifically determined based on the originality and reputation of the prior trade name right, as well as the degree of relevance between the goods or services of both parties”.
In practice, when the goods or services of both parties are not completely the same, should the standard for determining “similarity” be strictly in accordance with the classification stipulated in the Classification of Similar Goods and Services (hereinafter referred to as the “Classification”)? For a prior trade name with extremely high reputation comparable to a well-known trademark, can its scope of protection break through the boundary of similar goods, obtain cross-class protection equivalent to that of a well-known trademark, and be protected on non-similar goods?
To clarify the above issues, we may focus on recent judicial trends and observe the weighing and discretion of judicial authorities on these contested issues in specific judgments through several cases since 2022.
However, is it sufficient to prevent the registration of a subsequent trademark as long as the reputation of the prior trade name right can be proven? The answer is obviously negative. Then, where is the boundary of the scope of goods or services that can be blocked?
Some scholars have pointed out that the scope of rights of an enterprise name right is geographically relative, that is, the scope of rights should be determined according to the degree of its reputation1.
The Guidelines for Trademark Examination and Adjudication clearly stipulates that “the protection of a prior trade name right shall, in principle, be limited to goods or services that are the same as or similar to the goods or services actually operated by the holder of the trade name right. However, in individual cases, the scope of protection of the prior trade name shall be specifically determined based on the originality and reputation of the prior trade name right, as well as the degree of relevance between the goods or services of both parties”.
In practice, when the goods or services of both parties are not completely the same, should the standard for determining “similarity” be strictly in accordance with the classification stipulated in the Classification of Similar Goods and Services (hereinafter referred to as the “Classification”)? For a prior trade name with extremely high reputation comparable to a well-known trademark, can its scope of protection break through the boundary of similar goods, obtain cross-class protection equivalent to that of a well-known trademark, and be protected on non-similar goods?
To clarify the above issues, we may focus on recent judicial trends and observe the weighing and discretion of judicial authorities on these contested issues in specific judgments through several cases since 2022.
II. Determination of the Scope of Protection for Goods and Services of Trade Name Rights in Specific Judicial Cases
1. Scope of Protection Consistent with the Similarity Relationship in the Classification
In practice, such cases are very common. As the basis for the trademark administrative authority in determining similarity of goods when examining registration applications, the Classification is in line with reality in most cases, and courts also follow the similarity relationship in the Classification in most cases.
For example, in the case of refusal of registration review for the No. 38270757 “龙图” trademark2, the designated goods of the disputed trademark include “common metals, unwrought or semi-wrought; aluminum-plastic panels; windows of metal” in Class 6. The business scope of the holder of the prior trade name right is “production and sales of anodized, electrophoretic painted, and powder-coated aluminum alloy building profiles and industrial profiles; processing and manufacturing of doors, windows, and aluminum alloy components”. Evidence in the case shows that the company actually produces and sells metal aluminum materials, doors, windows, etc., which are the same as or similar to the designated goods of the disputed trademark. Based on the finding that the prior trade name has established a certain degree of reputation, the court determined that the disputed trademark infringed the prior trade name right.
According to the Classification, the designated goods of the disputed trademark, such as “ common metals, unwrought or semi-wrought; aluminum-plastic panels; windows of metal”, belong to subclasses 0601 and 0603 of Class 6. The goods operated by the holder of the prior trade name right, such as “metal aluminum materials, doors, and windows”, also belong to these subclasses and constitute similar goods.
In the invalidation declaration case of the No. 9501078 “好太太” (meaning “good wife” in English) trademark3, the designated goods of the disputed trademark include “furniture, sideboards” in Class 20. The prior trade name “好太太” of Haotaitai Company is mainly used on clothes drying racks. The Supreme People’s Court held that the “clothes drying racks” on which the trade name was used prior to the disputed trademark do not constitute similar goods to the “furniture” of the disputed trademark. Therefore, the evidence provided by the holder of the trade name right is insufficient to prove that the trade name “好太太” was used on the same or similar goods as the disputed trademark and has gained a certain reputation. Therefore, it was determined that the disputed trademark does not infringe the prior trade name right of Haotaitai Company.
In this case, according to the Classification, “furniture, sideboards” belong to subclass 2001 of Class 20, and “clothes drying racks” belong to subclass 2106 of Class 21, which do not constitute similar goods.
For example, in the case of refusal of registration review for the No. 38270757 “龙图” trademark2, the designated goods of the disputed trademark include “common metals, unwrought or semi-wrought; aluminum-plastic panels; windows of metal” in Class 6. The business scope of the holder of the prior trade name right is “production and sales of anodized, electrophoretic painted, and powder-coated aluminum alloy building profiles and industrial profiles; processing and manufacturing of doors, windows, and aluminum alloy components”. Evidence in the case shows that the company actually produces and sells metal aluminum materials, doors, windows, etc., which are the same as or similar to the designated goods of the disputed trademark. Based on the finding that the prior trade name has established a certain degree of reputation, the court determined that the disputed trademark infringed the prior trade name right.
According to the Classification, the designated goods of the disputed trademark, such as “ common metals, unwrought or semi-wrought; aluminum-plastic panels; windows of metal”, belong to subclasses 0601 and 0603 of Class 6. The goods operated by the holder of the prior trade name right, such as “metal aluminum materials, doors, and windows”, also belong to these subclasses and constitute similar goods.
In the invalidation declaration case of the No. 9501078 “好太太” (meaning “good wife” in English) trademark3, the designated goods of the disputed trademark include “furniture, sideboards” in Class 20. The prior trade name “好太太” of Haotaitai Company is mainly used on clothes drying racks. The Supreme People’s Court held that the “clothes drying racks” on which the trade name was used prior to the disputed trademark do not constitute similar goods to the “furniture” of the disputed trademark. Therefore, the evidence provided by the holder of the trade name right is insufficient to prove that the trade name “好太太” was used on the same or similar goods as the disputed trademark and has gained a certain reputation. Therefore, it was determined that the disputed trademark does not infringe the prior trade name right of Haotaitai Company.
In this case, according to the Classification, “furniture, sideboards” belong to subclass 2001 of Class 20, and “clothes drying racks” belong to subclass 2106 of Class 21, which do not constitute similar goods.
2. Breaking Through the Classification to Expand the Scope of Protection to Relevant Goods and Services
Trademark opposition and invalidation cases are different from trademark application registration examination. They are more involved in the protection of specific civil rights and interests and emphasize the remedial nature of individual cases. In this case, although the goods or services on which the prior trade name is used do not constitute identical or similar goods as the designated goods or services of the disputed trademark in accordance with the Classification, if there is a relatively close correlation between the two in terms of function, purpose, consumer groups, sales channels, etc., the rules of the Classification can be broken through, and the two can be determined to constitute similar goods, thereby protecting the prior trade name4.
For example, in the invalidation declaration case of the No. 21170123 “Raycap” trademark5, the China National Intellectual Property Administration held that the goods approved for use of the disputed trademark, such as “distribution boxes [electricity], voltage surge protectors”, are not identical with or similar to the goods “lightning arresters” used by the plaintiff prior to the disputed trademark. However, during the litigation stage, both the first-instance and second-instance courts held that the goods of both parties have a high degree of relevance in product functions. Considering the subjective malice of the registrant of the disputed trademark and the influence of the plaintiff’s prior trade name, they determined that the goods of both parties are identical or similar to each other, and further determined that the application and registration of the disputed trademark infringed the plaintiff’s prior trade name right.
In the invalidation declaration case of the No. 16999994A “无印良品” (Chinese trademark for “MUJI”) trademark6, during the review of refusal stage, the China National Intellectual Property Administration did not support the plaintiff’s claim that the disputed trademark infringed the trade name right. However, in the second instance, the court determined that the goods approved for use of the disputed trademark, such as “textile fabrics; textile towels; household plastic coverings; table blankets; textile furniture covers; textile toilet seat covers”, are highly relevant to the goods such as clothing and household daily necessities previously operated under the plaintiff’s trade name “无印良品” in terms of production departments, functional purposes, sales channels, consumer groups, etc., and constitute identical or similar goods. On this basis, it was determined that the disputed trademark infringed the plaintiff’s prior trade name right. The Supreme People’s Court also supported the view of the second instance in the retrial.
In addition, in the invalidation case of the No. 34956959 trademark “Freshfragrance”7, the first-instance court determined that the services approved for use of the disputed trademark, such as “beauty services, makeup artist services”, constitute similar services to the “cosmetics” used under the plaintiff’s prior trade name, and the disputed trademark infringed the prior trade name right. The China National Intellectual Property Administration filed an appeal, claiming that the goods and services of both parties are not similar, but the second-instance court held that the consumer groups of both parties are basically the same, constituting similar goods/services, and upheld the first-instance judgment.
In the above three cases, the goods or services of the disputed parties do not constitute similar goods or services in accordance with the Classification. In particular, the clothing and textile fabrics in the “无印良品” (Chinese trademark for “MUJI”) case belong to Class 25 and Class 24 respectively, and the cosmetics and beauty services in the “Freshfragrance” case belong to Class 3 and Class 44 respectively. It is worth noting that in the “Raycap” case and the “Freshfragrance” case, the China National Intellectual Property Administration, as the appellant in the second instance, claimed that the goods or services are not similar, while the courts made more flexible and market-oriented determinations by comprehensively considering practical factors (such as product functions, related industries, consumer objects, and the subjective state of the registrant) and combining the circumstances of individual cases.
For example, in the invalidation declaration case of the No. 21170123 “Raycap” trademark5, the China National Intellectual Property Administration held that the goods approved for use of the disputed trademark, such as “distribution boxes [electricity], voltage surge protectors”, are not identical with or similar to the goods “lightning arresters” used by the plaintiff prior to the disputed trademark. However, during the litigation stage, both the first-instance and second-instance courts held that the goods of both parties have a high degree of relevance in product functions. Considering the subjective malice of the registrant of the disputed trademark and the influence of the plaintiff’s prior trade name, they determined that the goods of both parties are identical or similar to each other, and further determined that the application and registration of the disputed trademark infringed the plaintiff’s prior trade name right.
In the invalidation declaration case of the No. 16999994A “无印良品” (Chinese trademark for “MUJI”) trademark6, during the review of refusal stage, the China National Intellectual Property Administration did not support the plaintiff’s claim that the disputed trademark infringed the trade name right. However, in the second instance, the court determined that the goods approved for use of the disputed trademark, such as “textile fabrics; textile towels; household plastic coverings; table blankets; textile furniture covers; textile toilet seat covers”, are highly relevant to the goods such as clothing and household daily necessities previously operated under the plaintiff’s trade name “无印良品” in terms of production departments, functional purposes, sales channels, consumer groups, etc., and constitute identical or similar goods. On this basis, it was determined that the disputed trademark infringed the plaintiff’s prior trade name right. The Supreme People’s Court also supported the view of the second instance in the retrial.
In addition, in the invalidation case of the No. 34956959 trademark “Freshfragrance”7, the first-instance court determined that the services approved for use of the disputed trademark, such as “beauty services, makeup artist services”, constitute similar services to the “cosmetics” used under the plaintiff’s prior trade name, and the disputed trademark infringed the prior trade name right. The China National Intellectual Property Administration filed an appeal, claiming that the goods and services of both parties are not similar, but the second-instance court held that the consumer groups of both parties are basically the same, constituting similar goods/services, and upheld the first-instance judgment.
In the above three cases, the goods or services of the disputed parties do not constitute similar goods or services in accordance with the Classification. In particular, the clothing and textile fabrics in the “无印良品” (Chinese trademark for “MUJI”) case belong to Class 25 and Class 24 respectively, and the cosmetics and beauty services in the “Freshfragrance” case belong to Class 3 and Class 44 respectively. It is worth noting that in the “Raycap” case and the “Freshfragrance” case, the China National Intellectual Property Administration, as the appellant in the second instance, claimed that the goods or services are not similar, while the courts made more flexible and market-oriented determinations by comprehensively considering practical factors (such as product functions, related industries, consumer objects, and the subjective state of the registrant) and combining the circumstances of individual cases.
3. Determination Involving Pharmaceutical Retailing Services
At present, in the examination of trademark registration applications in China, only the wholesale or retail of “pharmaceuticals, medicinal preparations, hygiene preparations, medical supplies, veterinary drugs, veterinary preparations” (hereinafter referred to as the “six types of goods including pharmaceuticals”) are accepted as designated services in relation to wholesale and retail services. According to the Classification, the “pharmaceutical wholesale or retail services” in subclass 3509 of Class 35 do not constitute similar goods or services to “pharmaceuticals” (belonging to subclass 0501 of Class 5). In trademark opposition and invalidation cases involving whether a subsequent trademark constitutes a similar trademark on similar goods to a prior trademark in accordance with Article 30 of the Trademark Law, there are many cases in practice where courts break through the Classification and determine that they are similar8. So how do courts determine in cases involving conflicts with prior trade name rights?
In the retrial case of the invalidation of the trademark “中联” No. 119885089, the designated services of the disputed trademark include “pharmaceutical retail or wholesale services” in Class 35. The products operated under the prior trade name of a certain state-owned pharmaceutical company (the plaintiff) are pharmaceuticals. The plaintiff claimed that the disputed trademark infringed its prior registered and used “中联” trade name right with a certain reputation. However, this claim was not supported by the Supreme People’s Court.
The Supreme People’s Court pointed out that for special goods and services, when determining whether the goods and services are similar, it is necessary to combine the administration and management norms formulated by the state to maintain the relevant market order for the production, sales and related services of such goods, and consider the impact of such norms on the sales channels, service methods and consumer groups of the goods. In the judgment, the Supreme People’s Court clarified the reasons and industry characteristics why pharmaceutical manufacturing enterprises, pharmaceutical wholesale enterprises and pharmaceutical retail enterprises cannot engage in cross-industry operations through the interpretation of the regulatory policies of laws and regulations such as the Drug Administration Law and the Measures for the Supervision and Administration of Drug Circulation on the pharmaceutical manufacturing industry and the operation industry, and clearly concluded that pharmaceutical manufacturing enterprises cannot sell pharmaceuticals to individual consumers or open pharmacies. Based on this, it was determined that there are significant differences between the services such as pharmaceutical retail or wholesale approved for use of the disputed trademark and pharmaceutical goods in terms of operation methods and providers, and they do not constitute similar goods and services. At the same time, considering factors such as the long term registration and use of the trade name “中联” of the registrant of the disputed trademark, which has gained a certain influence, it was finally determined that the disputed trademark does not infringe the plaintiff’s prior trade name right.
The Supreme People’s Court pointed out that for special goods and services, when determining whether the goods and services are similar, it is necessary to combine the administration and management norms formulated by the state to maintain the relevant market order for the production, sales and related services of such goods, and consider the impact of such norms on the sales channels, service methods and consumer groups of the goods. In the judgment, the Supreme People’s Court clarified the reasons and industry characteristics why pharmaceutical manufacturing enterprises, pharmaceutical wholesale enterprises and pharmaceutical retail enterprises cannot engage in cross-industry operations through the interpretation of the regulatory policies of laws and regulations such as the Drug Administration Law and the Measures for the Supervision and Administration of Drug Circulation on the pharmaceutical manufacturing industry and the operation industry, and clearly concluded that pharmaceutical manufacturing enterprises cannot sell pharmaceuticals to individual consumers or open pharmacies. Based on this, it was determined that there are significant differences between the services such as pharmaceutical retail or wholesale approved for use of the disputed trademark and pharmaceutical goods in terms of operation methods and providers, and they do not constitute similar goods and services. At the same time, considering factors such as the long term registration and use of the trade name “中联” of the registrant of the disputed trademark, which has gained a certain influence, it was finally determined that the disputed trademark does not infringe the plaintiff’s prior trade name right.
III. Conclusion
It can be seen from the above precedents that when handling conflicts between prior trade name rights and subsequent trademarks in judicial practice, courts usually limit the scope of protection of trade name rights to the following two situations: first, the category of goods or services in which the trade name has actually carried out business activities and established goodwill; second, the category of goods or services that can be reasonably determined to be similar in accordance with the Classification and combined with the industry business model. This scope is obviously different from the cross-class protection that well-known trademarks may obtain. Its legal basis lies in the fact that the essence of trade name right protection is to protect the goodwill interests generated through commercial use, rather than having exclusive control over the symbol itself.
The reason is that the protection of trade name rights essentially maintains the goodwill carried by the trade name and prevents market confusion. Article 32 of the Trademark Law sets out clear requirements for the application of prior trade name rights. It not only requires that the registration and use date of the trade name is earlier than the application date of the disputed trademark and that it has a certain reputation among relevant Chinese public, but also requires that the registration and use of the disputed trademark “is likely to cause confusion”, which may damage the rights and interests of the holder of the prior trade name right. Among them, the judgment of “likelihood of confusion” is the core link, usually based on the relevance of goods or services as the basic criterion. If there are significant differences between the fields involved by both parties in terms of functions, purposes, consumer objects, sales channels, etc., it is difficult to determine the likelihood of confusion, and the claim for protection of the trade name right is also difficult to be supported.
In view of this, the author suggests that when handling such right conflict cases, in addition to analyzing the conventional functional purposes, consumer objects, sales channels, etc., it is also necessary to conduct in-depth analysis of commercial relevance from multiple dimensions such as industry practices, business cooperation models, and specific risks of interest damage. By actively claiming rights within this reasonable boundary, one can maximize the protection of one’s own legitimate interests.
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1Kong Xiangjun. Principles and Precedents of the Trademark Law (1st Edition). Beijing: Law Press, 2021: 385.
2Administrative Judgment No. (2023) Jing Xing Zhong No. 6819 of the Beijing Higher People’s Court.
3Administrative Retrial Judgment No. (2022) Zui Gao Fa Xing Zai No. 3 of the Supreme People’s Court.
4Chen Jinchuan. Judicial Review of Trademark Grant and Confirmation (1st Edition). Beijing: China Legal Publishing House, 2014: 363.
5Administrative Judgment No. (2022) Jing Xing Zhong No. 1250 of the Beijing Higher People’s Court.
6Administrative Retrial Ruling No. (2024) Zui Gao Fa Xing Shen No. 5866 of the Supreme People’s Court.
7Administrative Judgment No. (2024) Jing Xing Zhong No. 2026 of the Beijing Higher People’s Court.
8Administrative Judgment No. (2019) Jing Xing Zhong No. 7352 of the Beijing Higher People’s Court.
9Administrative Retrial Ruling No. (2023) Zui Gao Fa Xing Shen No. 2205 of the Supreme People’s Court.
The reason is that the protection of trade name rights essentially maintains the goodwill carried by the trade name and prevents market confusion. Article 32 of the Trademark Law sets out clear requirements for the application of prior trade name rights. It not only requires that the registration and use date of the trade name is earlier than the application date of the disputed trademark and that it has a certain reputation among relevant Chinese public, but also requires that the registration and use of the disputed trademark “is likely to cause confusion”, which may damage the rights and interests of the holder of the prior trade name right. Among them, the judgment of “likelihood of confusion” is the core link, usually based on the relevance of goods or services as the basic criterion. If there are significant differences between the fields involved by both parties in terms of functions, purposes, consumer objects, sales channels, etc., it is difficult to determine the likelihood of confusion, and the claim for protection of the trade name right is also difficult to be supported.
In view of this, the author suggests that when handling such right conflict cases, in addition to analyzing the conventional functional purposes, consumer objects, sales channels, etc., it is also necessary to conduct in-depth analysis of commercial relevance from multiple dimensions such as industry practices, business cooperation models, and specific risks of interest damage. By actively claiming rights within this reasonable boundary, one can maximize the protection of one’s own legitimate interests.
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1Kong Xiangjun. Principles and Precedents of the Trademark Law (1st Edition). Beijing: Law Press, 2021: 385.
2Administrative Judgment No. (2023) Jing Xing Zhong No. 6819 of the Beijing Higher People’s Court.
3Administrative Retrial Judgment No. (2022) Zui Gao Fa Xing Zai No. 3 of the Supreme People’s Court.
4Chen Jinchuan. Judicial Review of Trademark Grant and Confirmation (1st Edition). Beijing: China Legal Publishing House, 2014: 363.
5Administrative Judgment No. (2022) Jing Xing Zhong No. 1250 of the Beijing Higher People’s Court.
6Administrative Retrial Ruling No. (2024) Zui Gao Fa Xing Shen No. 5866 of the Supreme People’s Court.
7Administrative Judgment No. (2024) Jing Xing Zhong No. 2026 of the Beijing Higher People’s Court.
8Administrative Judgment No. (2019) Jing Xing Zhong No. 7352 of the Beijing Higher People’s Court.
9Administrative Retrial Ruling No. (2023) Zui Gao Fa Xing Shen No. 2205 of the Supreme People’s Court.