Court clarifies “other harmful influence” under Article 10 of Trademark Law

In a case involving Lacoste's famous crocodile device, the Beijing Number 1 Intermediate People’s Court has clarified that the term "other harmful influence" in Article 10 of the Trademark Law refers only to public order, not to private interests.

Article 10 of the Trademark Law (Article 9 of the former version of the law) provides that "[t]he following signs shall not be used as trademarks:… those detrimental to socialist morals or customs, or having other harmful influence".

In the present case, French company Lacoste applied, through the international channel, for the registration in China of the mirror image (facing left) of its famous crocodile device:

Lacoste's right-facing crocodile device is already registered as a trademark in China. The Trademark Office objected to this application, citing an earlier trademark application for a left-facing crocodile device that was very similar to Lacoste's trademark. This application had been made by a Hong Kong company called Crocodile Garments Ltd. The cited trademark was the subject of an opposition by Lacoste. After a long procedure, the parties reached an agreement whereby Crocodile Garments withdrew all its trademark applications for a crocodile device. As a result of the settlement, there was no obstacle to the registration of Lacoste's left-facing crocodile device.
Nevertheless, when the case came to be examined by the Trademark Review and Adjudication Board (TRAB), the refusal was maintained under Article 10(8) of the Trademark Law (“having other harmful influence”). The TRAB took the view that, because Crocodile Garments' trademark had been used for a long time, consumers were able to make the difference between the two trademarks (ie, the left and right-facing crocodiles). It further held that, if Lacoste were allowed to register its left-facing crocodile device, this could cause misidentification in the market.

Lacoste appealed to the Beijing Number 1 Intermediate Court, which overruled the TRAB’s decision and, in doing so, clarified the meaning of the phrase "other harmful influence". The court mentioned that, under Article 28 of the law, an application will be refused "where a trademark application is not in conformity with the relevant provisions of this law, or is identical or similar to the trademark of another person…”. It explained that the expression “not in conformity with the law” refers to Article 10 (signs that may not be used as a trademark), whereas the phrase “identical or similar to” refers to the presence of a prior trademark (applied for or registered). The court added that "harmful influence" refers only to the public interest and public order, and not to the existence of other private rights. 
A trademark owner is entitled to change the direction of its trademark device without altering its distinctive character. The judgment constitutes a useful clarification of the meaning of "harmful influence" under Article 10(8), which is sometimes abusively quoted as a systematic 'back up' argument.
Paul Ranjard, Wan Hui Da Law Firm & Intellectual Property Agency, Beijing
The author's firm acted for Lacoste in this case

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