Issuing Body: Supreme People's Court
Issuing Date: April 20, 2010
Effective Date: April 20, 2010

With Chinese courts handling an increased number of trademark cases in recent years, the Supreme People's Court (SPC) has issued the Opinions on Several Issues Concerning the Hearing of Administrative Cases That Involve the Granting and Confirmation of Trademarks (Trademark Case Opinions) in an attempt to clarify ambiguities and unify trial criteria for administrative cases that involve the granting and confirmation of trademarks. The opinions provide courts in Beijing, which handle all such cases, with detailed guidelines for hearing trademark granting and confirmation cases.

Background

Under China's Trademark Law, which was last revised in 2001 (Trademark Law), if a party is dissatisfied with an administrative decision made by the Trademark Review and Adjudication Board (TRAB) of the State Administration of Industry and Commerce on refusal of a trademark, opposition to or revocation of a trademark, or a trademark dispute, that party is entitled to initiate administrative litigation against the TRAB decision or decisions. Such cases are collectively referred to as "trademark granting and confirmation cases." Since the TRAB is located in Beijing, these cases are heard by courts there, including Beijing First Intermediate People's Court, Beijing Higher People's Court, and the SPC.

Those courts have recently been accepting a large number of trademark granting and confirmation cases, some of which have been particularly complicated. Given the breadth and vagueness of existing laws that govern trademarks, and a lack of detailed trial criteria, courts have had difficulty hearing trademark granting and confirmation cases. Growth in the number of cases, as well as an increasing number of problems at trial necessitated issuance of the Trademark Case Opinions.

The Trademark Case Opinions provide courts with detailed guidelines on hearing trademark granting and confirmation cases (e.g., whether the trademark in dispute has satisfied all registration requirements or whether the trademark in dispute should be revoked). These opinions cover a broad range of topics, including general principles for resolving disputes, how to handle disputes that involve trademarks containing place names, foreign language trademarks, preemptive registration by agents or representatives, generic marks, and the like.

General Principles

In practice, trademark disputes involve trademarks (or would-be trademarks) that often have very different status. Some, for example, have never been used in the market, while others have been used frequently. Courts, the Trademark Case Opinions say, should take into account the variable status of trademarks in dispute and treat them differently.

When determining whether a trademark that has never been used or that has been used infrequently should be registered, courts should fully consider the interests of consumers and business operators and use "appropriately" strict criteria to examine the similarity between the trademark in dispute and previously used trademark(s) as well as the similarity of the products for which the disputed and previously used trademarks are used. In weighing these considerations, the court's purpose should be to protect prior use rights, to avoid confusion between trademarks in dispute and previously used trademarks, and to protect such prior-use trademarks from illicit behavior such as reproduction and copying. The Trademark Case Opinions, however, do not specify what the abovementioned "appropriately" strict criteria might be, or how to apply them in practice.

When determining whether a trademark that has been used for a long time, has a high level of market reputation, and has its own relevant customer groups should be revoked, courts should fully respect the fact that relevant customers can objectively distinguish the trademarks in dispute from other trademarks in the market, and prudently make decisions on revocation. In such situations, the court's purpose should be to protect prior trademark rights, establish and maintain steady trademark order, and foster development of existing brands.

Trademarks Containing Place Names

Under China's Trademark Law, neither the names of administrative divisions in China above the county level nor publicly known names of places in foreign countries and regions may be registered or used as registered trademarks. In practice, though, certain trademarks consist not just of place names but place names combined with other elements. If such a trademark, in its entirety, has a distinctive nature with the addition of another element to a place name, the trademark does not have the meaning of the place name, and the primary meaning of the trademark is not the place name, courts should not determine that the trademark is to be denied registration only on the ground that it contains a place name.

Foreign Language Trademarks

When examining and determining whether foreign language trademarks have a distinctive nature, courts should make their decisions based on the common knowledge of relevant customers within China. If the foreign word(s) in the disputed trademark have inherent meanings but relevant customers are able to identify the origin of the product with which the trademark is associated, the fact that there are foreign word(s) in the disputed trademark should not be deemed as a negative factor in determining its distinctiveness.

Preemptive Registration by Agents or Representatives

According to the Trademark Law, agents or representatives are prohibited from registering the trademarks of principals without authorization from the principals. If agents or representatives register marks without such authorization, their behavior should be deemed to be malicious preemptive registration. The Trademark Case Opinions clarify that if preemptive registration occurs during the negotiation stage between an agent or representative and the principal, courts should recognize the behavior as preemptive registration of a trademark.

Generic Marks

Generic marks cannot be registered as trademarks under China's Trademark Law. In practice, however, whether to consider a mark generic sometimes presents a puzzling question for courts. The Trademark Case Opinions classify generic marks into two groups: 1) statutory generic marks; and 2) established-by-usage generic marks.

If a mark is classified as generic by law, national, or industry standards, it should be recognized as a statutory generic mark by courts. If relevant consumers generally believe that a mark can be used to represent a whole group of products, it should be recognized as an established-by-usage generic mark. If a mark is classified as a generic mark in professional reference books or dictionaries, that fact may be used for reference by courts to recognize the mark as generic.

The criteria for determining established-by-usage generic marks are generally based on the common knowledge of relevant customers throughout China. The Trademark Case Opinions also provide for two exceptions to that criteria: 1) If a mark is in widespread use with a whole group of products in a relevant market due to historical tradition, local conditions, custom, or geographic environment, the mark could be recognized as an established-by-usage generic mark; and 2) If the applicant is or should be aware that the mark is an established-by-usage product name in a particular area, the mark for which registration is being sought should be recognized as an established-by-usage generic mark.

Conclusions

The Trademark Case Opinions provide detailed guidance for courts in hearing certain types of trademark granting and confirmation cases. As such, that guidance should prove helpful to courts and companies alike, including foreign-invested enterprises, given the importance of trademarks and trademark protection for FIEs. But the guidelines do not cover all the difficult and complicated questions faced by courts in Beijing as they handle China's growing trademark dispute caseload—and uncertainties will likely persist.