Foreign brand owners challenging bad-faith applications face uncertainty

China

Foreign brand owners wishing to be present on the Chinese market have had to deal with the problem of bad-faith trademark applications - and two recent cases demonstrate that, when the brand owners seek to defend their rights, the outcome is very uncertain.

In the first case, the Trademark Review and Adjudication Board (TRAB) affirmed the dismissal of E Remy Martin & Co’s opposition against an application (No 3425491) for the registration of REN TOU MA in Chinese characters (a Chinese mark often associated with Remy Martin’s XO cognac in China).

The application for REN TOU MA was filed on January 3 2003. It covered, among other things, “computers and portable computers" in Class 9 of the Nice Classification. Remy Martin argued that the goods covered by the mark applied for were similar to those covered by its own marks, even though they fell within different classes: Remy Martin's reasoning was that goods in Class 18 (accessories) and 25 (clothes) on the one hand, and goods in Class 9 (computers) on the other, were closely linked to people’s daily life. However, the Trademark Office and TRAB disagreed.

Remy Martin also sought to establish the well-known status of its marks and asked for cross-class protection. The TRAB did not deny that the marks were famous, but refused to extend protection to Class 9. The TRAB stated that the protection of well-known marks should not "be expanded unlimitedly; instead, the protection must follow the rules of fair competition and consider the interests of the trademark owners and consumers".

The TRAB ruled that the evidence submitted by Remy Martin merely proved the widespread and continuous use of Remy Martin's cited marks for alcohol products, but not for computers or similar goods. As a result, the relevant public in China was likely to distinguish REN TOU MA from the cited marks, and there was no likelihood of confusion.

Remy Martin has reportedly appealed to the court, arguing that, pursuant to the legislative intent of the Chinese Trademark Law, the protection of well-known trademarks should extend to dissimilar goods. The appeal is now pending.

In the second case, Chanel had initially lost its opposition before the Trademark Office against an application (No 3221732) for the registration of XIANG NAI ER in Chinese characters (CHANEL and device) in Class 19. However, it successfully appealed the decision before the TRAB. The trademark applicant is now appealing the decision before the court.

The key issue in this case was the same as that in Remy Martin's opposition. The application for XIANG NAI ER covered “ceramic tiles; tiles” in Class 19, while Chanel’s cited marks were registered in Classes 3, 18, 25 for goods such as perfumes, clothes and bags. However, Chanel was more successful than Remy Martin, as the TRAB recognised the well-known status of the Chinese counterpart of the CHANEL mark. The TRAB concluded that:

Chanel’s well-known trademark 'XIANG NAI ER in Chinese' is widely known among Chinese consumers, and the well-known status of ‘CHANEL in Chinese’ means that it will be hard for the opponent to be exempt from the guilt of making bad-faith filings”.

The TRAB ruled that use on the opposed mark would cause confusion among the Chinese public as to the origin of the goods, which would lead to severe losses by Chanel.

The applicant has reportedly appealed the decision based on its longstanding use of the mark.

It is very difficult to reconcile the two decisions without reviewing the evidence. Assuming that the TRAB adopted the same standards in these two cases, it looks like the evidence filed with the authorities about the well-known status of the marks has made the difference.

He Jing and Gu Ting , ZY Partners, Beijing

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