23 Sep
2020

Getting creative: when to protect trade dress under trademark or competition law

Kangxin Partners PC

In the absence of trade dress-specific legislation, rights holders in China must manoeuvre around the Trademark Law and the Anti-unfair Competition Law if they are to protect their unique designs effectively.

Protection for trade dress (ie, the overall image or appearance of a product, including its size, shape, colour or colour combination, structure, graphics and even special sales techniques) originated in the United States and has become increasingly important as more and more designs enter the public domain. However, compared to the significant amount of US case law on the topic, China’s legal system offers no clear definition of trade dress, nor does it provide special legal protection for it. Instead, trade dress is generally protected under the Trademark Law and the Anti-unfair Competition Law, which offers protection for 3D trademarks, product packaging, product packaging services and packaging that identifies aspects of a business. Therefore, rights holders in China should familiarise themselves with these two laws in order to best secure their designs.

Protecting trade dress under the Trademark Law

Trademarks are most closely related to trade dress. According to Article 8 of the Trademark Law, “an application may be made to register as a trademark any mark, including any text, graph, alphabetic letter, number, three-dimensional symbol, color combination, sound or any combination thereof, which is able to distinguish the goods of a natural person, legal person or other organization from those of others”.

Notably, there is no clear definition of trade dress under the Trademark Law. However, the law protects the appearance of products, including:

  • the shape of a product;
  • the outer packaging of a product;
  • a pattern or colour that covers a product or its outer packaging; or
  • a combination of all three.

The types of trademark available for trade dress include not only 3D trademarks that are characterised by the shape of the product or its outer packaging (eg, the appearance of cars and soft drink bottles), but also graphic trademarks, colour combination trademarks (eg, the blanket mass or whole colour design of a saw blade) or a combination of these elements. In practice, 3D marks are the most closely related to trade dress under the Trademark Law.

Three-dimensional trademarks refer to trademarks that consist of only 3D signs or 3D signs containing other elements. These can be the shape of the product itself, the packaging of the product or other 3D signs. For example, receptacles such as wine bottles, beverage bottles or perfume bottles are all registrable as 3D marks. Brand owners that register their unique product packaging as 3D trademarks obtain a longer term of exclusive protection than they would through copyright or design patent rights. However, not all trade dress can be registered as 3D marks. 

Article 11 of the Trademark Law states as follows:

The following signs shall not be registered as trademarks:

(1) Those consisting only of generic names, devices, or model numbers of the goods concerned;

(2) Those consisting only of a direct representation of the quality, primary raw materials, functions, intended purposes, weight, quantity, or other characteristics of the goods concerned;

(3) Those otherwise lacking distinctive features.

The signs mentioned in the preceding paragraph may be registered as trademarks after they have acquired distinctiveness and become easily distinguishable through use.

Moreover, Article 12 states: “With respect to a three-dimensional mark as the subject matter under a trademark registration application, registration of that mark shall be prohibited if its shape only represents the nature of the product, or its shape is required for achieving a technological result, or its shape adds substantial value to the product.”

As such, a 3D trademark must meet the conditions of distinctiveness and non-functionality.

The distinctiveness of product packaging is generally relatively weak due to its particular nature. However, it cannot be assumed that such trademarks are not inherently distinctive. Unique packaging can overcome the consumer perception that the design serves only as packaging. When the product or the producer of the product can be judged by the shape of the packaging alone, this performs the function of distinguishing the source of the product, which means that it is distinctive in the sense of the Trademark Law (ie, registrable as a 3D trademark). Similarly, if through long-term and large-scale use consumers have established a connection between the 3D mark and the product provider, such that the mark has the ability to distinguish the source of the goods or services, then it has acquired distinctiveness.

Trade dress is an inseparable and invaluable part of a product. It plays a key role in influencing consumer purchasing choices and thereby product sales. Therefore, as well as improving the quality of products, brand owners are becoming more innovative when it comes to product packaging, to ensure that this is sufficiently distinctive for consumers to identify the source of the product and thus qualify for 3D trademark protection. In this way, registration of a 3D trademark or colour combination mark, among other rights, can benefit product sales and brand protection.

Protecting trade dress under the Anti-unfair Competition Law

Article 6 of the Anti-unfair Competition Law states as follows:

A business operator shall not conduct any of the following acts of confusion to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others:
(1) Where the business operator uses, without authorization, logos identical with or similar to others' product names, packaging or decoration that has certain influence;
(2) Where the business operator uses, without authorization, others' enterprise names (including abbreviations, trade names, etc.), social organization names (including abbreviations, etc.) or names (including pen names, stage names, translated names, etc.) that have certain influence;
(3) Where the business operator uses, without authorization, the main parts of others' domain names, website names, web pages, etc. that have certain influence; or
(4) Other acts of confusion enough to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others. 
(Emphasis added.)

Moreover, Article 2 of the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of Law in the Trial of Civil Cases Involving Unfair Competition states that: “The name, packaging, and decoration of a product that has the distinctive characteristics differentiating the source of the product shall be determined as being the ‘name, packaging, or decoration unique thereto’ as specified in Item (2) of Article 5 of the Anti-Unfair Competition Law.”

In addition, Article 3 states that: “A business operator's entire business image that is composed of the decoration of its business site, the design of its facilities, the clothes of its personnel, etc. and which has a unique style may be determined as the ‘decoration’ specified in Item (2) of Article 5 of the Anti-Unfair Competition Law.”

Based on these, the ‘decoration’ of a product may be attached to and integrated with the product, or it may be attached to and become a part of the packaging. Although the packaging as the ‘decoration’ can be independent of the product, it must exist together with the product – that is to say, the packaging must be attached to the product. Otherwise, it will lose its significance.

According to Article 6 of the Anti-unfair Competition Law, legal protection is limited to a product’s name, packaging or decoration that has a certain influence. Thus, the influence of the product is an essential precondition for legal protection. In other words, the object protected by the Anti-Unfair Competition Law must have a certain identification function. This is generated when the product enjoys a certain level of recognition and influence through long-term operation and widespread promotion among the public. The essence of the identification function is that well-known products represent certain competitive advantages and market benefits, and brand owners that have earned such benefits have the right to prohibit free riders.

In judicial practice, where a court is to determine whether a product is well known, it will make a comprehensive judgment by taking into consideration factors such as the period, region and volume of sales, the target consumer, the duration, degree and regional scope of any publicity, and details of the protection of the product as a well-known product, among other things.

That said, the Anti-unfair Competition Law does not protect all packaging and decoration of a product, and in order to be protected the trade dress must have unique characteristics (ie, it must be distinctive). According to Article 3 of the Provisions Concerning the Prohibition of the Unfair Competition Activities in the Counterfeiting of the Specific Names, Packaging and Decoration of Well-Known Products, “the unique characteristics shall mean that the names, packaging and decoration of the products are not in common used by relevant products and have distinctive features”. Here, ‘unique’ trade dress mainly refers to the trade dress that distinguishes it from other products, which is similar to the ‘distinctiveness’ requirement under the Trademark Law.

Comment

The Anti-unfair Competition Law protects the competitive legal interest derived from the source-identification function of trade dress; the higher the popularity of the trade dress, the greater the competitive legal interest. Since these interests are most often infringed as a result of confusion, the Anti-unfair Competition Law does not grant trade dress owners active exclusive rights, but rather aims to protect their rights by preventing confusion. Unlike the Trademark Law, which provides special and static protection for trademarks, the Anti-unfair Competition Law provides passive protection for trade dress, which depends on the specific case and is only valid for individual cases.

Chanyuan (Ashley) Zhu

Trademark attorney

[email protected]