Loss of distinctiveness after registration does not necessarily lead to cancellation

The Beijing Higher People’s Court has ruled that the registered trademark MODAL could not be cancelled based on facts that had occurred after registration.

In August 2000 Shanghai Saiyang Technology Co Ltd applied to register the trademark 莫代尔 (the Chinese translation of MODAL) for clothes in Class 25 of the Nice Classification. The trademark was registered in December 2001. Thereafter, the word 'modal' became the common name for a fibre raw material which is used to make yarns, fabrics and other textile materials. This was highlighted in the First Amendment to the National Standard of Textile Terminology (Chemical Fibre), which came into effect on March 1 2006.

In February 2009 Lenzing AG requested the cancellation of the MODAL mark on the grounds that:
  • 'modal' had become the generic name of a fibre raw material; and
  • use of a generic name as a trademark for clothes, shoes and caps was against the Trademark Law.
In August 2010 the Trademark Review and Adjudication Board (TRAB) dismissed Lenzing’s request and upheld the registration of the mark. The TRAB noted that the First Amendment, which included 'modal' as the name of a fibre made by spinning reconstituted cellulose, was dated December 31 2005 and came into effect on March 1 2006. Both dates were later than the registration date of the trademark. Moreover, Lenzing had not provided evidence that 'modal' had been used as the common name for a new generation of artificial fibre prior to the registration of the MODAL mark.
Lenzing filed a lawsuit before the Beijing First Intermediate Court, which upheld the TRAB’s decision. The court first noted that the registration date of the trademark predated the coming into force of the First Amendment. Moreover, it held that, since a Chinese word may have multiple meanings, the fact that 'modal' (in Chinese) designates a fibre according to the National Standard does not mean that the word cannot indicate the source of the goods.

Lenzing appealed to the Beijing Higher People’s Court, which upheld the first instance judgment. The court held that any factual change affecting the distinctiveness of the trademark that may occur after the date of registration cannot be a ground for cancellation of that registration.

This case raises two issues that the Trademark Law does not currently address:
  • There is no provision relating to the cancellation of a trademark that has become the generic name of the product that it designates.
  • If a trademark has been registered, even though it was not distinctive at the time of registration, but has since acquired a satisfactory level of distinctiveness through use, can it still be revoked?
Huang Hui, Wan Hui Da Law Firm & Intellectual Property Agency, Beijing

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