Supreme People’s Court clarifies that there is no such thing as registration extension

China
  • Supreme People’s Court decisions finds that there is no such thing as extension of trademark registration, although extension of reputation is still viable
  • The judgment acknowledges that goodwill may be extended, though this is not automatic
  • The court was not obligated to assess whether extension of reputation is a viable argument in this case.

In Spider King Group Co Ltd v Trademark Review and Adjudication Board (2017) (Zui Gao Fa Xing Shen #3297, Supreme People’s Court Gazette, 11th edition, 2018), the Supreme People’s Court has reaffirmed that the reputation built up on a prior mark may extend to a later mark by the same applicant. However, it categorically denied the extension of trademark registration except through registration renewal.

Background

Spider King Group Co, Ltd (China Spider King) is a major Chinese footwear maker, which has been marketing Spider King shoes since 1996. China Spider King owns three registered trademarks in China.

However, in 1988, before the first spider device (Mark 2) was registered by China Spider King, a US company called USA Spider King Group Limited registered another spiderdevice , depicted below, in China:

The trademark was registered in Class 25, designating baby clothes, shoes, swimsuits, neckties, scarves and headgear.

On 15 October 2004 USA Spider King Group Limited applied for the registration in Class 25 of the same device mark alone, without the Chinese characters and the Pinyin thereof:

The application, which was later assigned to another US company, Spider Group Limited (USA Spider), was preliminarily approved on 6 May 2008.

On 28 November 2008 China Spider King filed an opposition against the applied trademark, citing its three prior registrations. 

The China Trademark Office (CTMO) dismissed the opposition and approved the registration of the opposed trademark.

On 30 January 2011 China Spider King appealed to the Trademark Review and Adjudication Board (TRAB).

USA Spider argued that its prior registration of its spider device in Class 25 had co-existed with the cited marks and that there had been no evidence of confusion in the market.

The TRAB upheld the CTMO decision on 10 September 2012, finding that some designated goods were not similar, that the trademarks in conflict were not similar and, finally, that USA Spider’s previous registration (with the Chinese characters and Pinyin attached to it) justified the registrability of the opposed trademark. Besides, the TRAB found that the cited marks had not acquired well-known status, nor had they acquired a “certain influence” sufficient to allow an opposition to succeed.

China Spider King appealed to the Beijing No 1 Intermediate Court, which, on 30 December 2015, overruled the TRAB’s decision, based on the similarity between the opposed trademark and Marks 2 and 3.

The TRAB and USA Spider appealed to the Beijing High Court. On 28 December 2016 it dismissed the appeal. The court found that the two trademarks representing a stylised spider are similar and that the prior registration of US Spider, which is the combination of a spider device, the Chinese characters ‘中吉’ and its pinyin ZHONGJI had not acquired sufficient reputation to avoid any confusion. Therefore, the co-existence of this mark with Marks 2 and 3 did not justify the registrability of the opposed trademark.

USA Spider filed a retrial application with the Supreme People’s Court, arguing that the opposed trademark was an extension of its earlier registration. 

Supreme People’s Court decision

On December 22 2017 the Supreme People’s Court dismissed the retrial application, echoing the finding made by the first-instance court and appeal court that the opposed trademark constitutes a similar trademark to the Marks 2 and 3 in respect of identical or similar goods.

USA Spider’s argument with regard to the extension of the trademark registration prompted a clarification from the Supreme People’s Court on the difference between extension of goodwill and the extension of a trademark.

Regarding the extension of goodwill, the court affirmed that: “The goodwill built up by a market player in the course of business operation, may be, in a certain manner, shifted among or extended to a variety of carriers such as the trade name, trademark, packaging and decoration of goods of such market player, or any other signs that may serve as the source identifier of its goods or services.”

However, it categorically denied the extension of a trademark (other than through an actual trademark renewal):

Nevertheless […] where a new trademark that is associated with a prior registered trademark needs to be registered […]  (and it is necessary) to file a new application with the trademark administrative department, which shall review such application […] no matter whether the prior registered trademark has built up a certain reputation, or how the goods designated by the new trademark relate with that of the prior trademark, or what the relationship between the two marks is. The registrability of the opposed trademark shall be reassessed by the trademark administrative department, rather than being justified by its association with a prior registration. Other than trademark renewal, Article 38 of the Trademark Law provides no alternative form of trademark extension.

Comment

This decision from the Supreme People’s Court makes extending trademark registrations – a concept that had been widely discussed and invoked in China’s trademark practice – obsolete. The court is taking a tough stance against the practice, where applicants attempt to exploit prior registration to boost their chance of registering a later similar trademark, which complicates the trademark prosecution procedure.

The judgment does acknowledge that goodwill built up on a prior registration may be extended, although this is not automatic. Given that the USA Spider merely insisted, in the retrial procedure, on the argument for extending trademark registration, the court was not obligated to assess whether extension of reputation is a viable argument in this case. The first-instance court and the court of appeal did ascertain that this case does not fit the parameters as set by the Supreme People’s Court in an earlier decision, Bonneterie Cevensole SARL v TRAB (2012 Xing Ti Zi #28) on the extension of reputation, as:

  • the prior registered trademark has accumulated certain goodwill;
  • the later opposed trademark is identical with or similar to the prior registered trademark;  
  • the designated goods of the later opposed trademark and that of the prior registered trademark are identical or similar; and
  • the public tends to associate the applicant’s later trademark with its prior trademark and to construe that the goods to which the later trademark and the prior trademark are attached originate from such applicant or are linked to the applicant, rather than associating the later trademark with the prior registered trademarks of other trademark owners.

Wanhuida Peksung represented China Spider King in the first and second instances, as well as in the retrial proceeding.

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