With the astounding development of the national economy, people’s quality of life has been improving and cultural products have become wider in variety. People are pursuing entertainment of different types and it leads to the rapid growth of cultural and entertainment businesses in mainland China. As sectors of the cultural and entertainment industry such as film, television, game and book experience a boom, the names of these works as well as the names and images of the characters in these works have become commodities with great commercial value.
Specifically, people who love books, games, tv programs or films also love their related merchandise. Tie-in products have long-term promotional benefits, whether you are giving products away or selling them. It means when a work like a film, book, tv program or a game becomes popular, their related merchandise would have great market and by selling these products under the titles of the works or with the character names in these works would bring fantastic income. Tie-in products could bring lucrative income stream that triggers preemptions increase greatly, which also has opened the possibilities of infringement or outright taking of the works by others for their own use without attribution or compensation for the owners. Pirated trademarks appear along with the works become successful in the market and trademarking the well-recognized titles of works or character names become one common method by the squatters to exploit the already established fame for high financial gains.
- Increase in trademark cases involving protection of titles of works or character names in China.
To safeguard the great success of their works, and to avoid being squeezed of the market shares by the squatters, more work owners stand up against the trademark pirates who seek to register the titles of works or character names and to sell the related goods or services for monetary benefit. It leads to recently in China, trademark cases involving protection on titles of works or character names become more than ever before.
According to the publicized information on June 19, 2020, in last year, among 20,392 trademark administrative litigation case concluded by the Beijing Intellectual Property Court (hereinafter referred to as “the Beijing IP Court”), 67 involve protection of prior rights and interests attached to titles of works or character names such as “TIE BI A TONG MU” (Astroboy in Chinese), “BING XUE QI YUAN” (Frozen in Chinese) and “YING XIONG LIAN MENG” (League of Legend in Chinese). Although this type of cases account for a small part of all the trademark administrative litigation cases, they have aroused extensive attention due to the huger commercial values attached thereto. According to the public statement of the vice president of the Beijing IP Court, these cases often have such main features as the infringed works have high reputation and wide popularity, the titles or character names have strong recognizability, more owners of works from abroad are involved, the scope of protection of names of the works or character names is close to daily life and often not limited to the sectors which the concerned works belong to.
- Legal frames for protecting interests attached to titles of works or character names.
The first part of article 31 of 2001 China Trademark Law (currently the first part of article 32 of 2019 Trademark Law) provides, “No trademark application may infringe upon the existing prior rights of others”. It’s the general stipulation for protection of prior private rights and interests in the Chinese trademark laws.
To clarify the situations when the above general stipulation shall be applied, the Opinions on Several Issues Concerning the Trial of Administrative Cases involving the Authorization and Determination of Trademark Rights that came into force on April 20, 2010, stipulates in article 17 that, the courts should correctly understand and apply the general provisions that “no trademark application may infringe upon the existing prior rights of others” in article 31 of 2001 Trademark Law (now as article 32 of the current Trademark Law). When judging whether a disputed trademark has damaged others’ prior rights, for the prior rights that have been specially provided for by the Trademark Law, the courts should protect them under these special provisions, and for those which are not stipulated in the Trademark Law but are the legitimate rights and interest that need to be protected according to the General Principles of the Civil Law and other relevant laws, protect them under the aforesaid general provisions.
Following the above statutory provisions and judicial interpretations, when one’s private rights and interest, other than trademark rights, are protectable in pursuant to the private laws, the courts should apply article 32 of the current Trademark Law (article 31 of 2001 Trademark Law) in deciding trademark dispute cases regarding protection of these rights and interests.
In response to the inconsistencies in examining cases by the Chinese judicial authorities, the Provisions of the Supreme Court on Several Issues Concerning the Trial of Administrative Cases involving Trademark Authorization and Confirmation (hereinafter referred to as “the Provisions”) that becomes effective since March 01, 2017, specifies in article 7 that, prior rights as set out in the first part of article 32 of the Trademark Law include the prior civil rights or other legitimate interest that need to be protected before the filing date of the disputed trademark. Article 22 of the Provisions further provides, for a work within copyright protection term, if the name of the work, or the character name and etc., in the work has high reputation, and use of the name as a trademark on the relevant products would easily makes the relevant public mistakenly believe that permission of the right owners has been obtained or there’s certain connection with the right owner, when the party claims that it has prior interest to the work, the courts shall affirm.
Based on the above legislation and judicial interpretations, it becomes definite that titles of the works or character names can be protected as “prior interest” when certain conditions have been met. It also shows the Chinese courts’ attitudes towards protecting the huge commercial values attached to the titles of reputable works or character names acquired by the owners’ effective operations and significant investments.
- Judicial practices in deciding work title or character name related trademark cases.
(1) No copyright protection permitted to the titles of works or character names.
Many work owners once sought copyright protection over the titles of their works or character names in trademark disputes. However, it’s commonly acknowledged that titles of works i.e. titles of books, films, games and character names in these works are not copyrightable, as they are not original or sophisticated enough to be considered as expressions of ideas for copyright protection. When the work owners claimed for copyright protection over the titles of their works or character names in trademark administrative litigation cases, copyright protection would be rejected by the Chinese courts, as decided by the Beijing High Court in the administrative litigation case against the opposed trademark “指环王THE LORD OF THE RINGS”, the opposed mark didn’t include the creative parts of the concerned work i.e. the film Lord of the Rings that was requested for protection, and therefore the alleged film title shouldn’t be protected under the Chinese copyright laws. The applicant of the opposed mark hadn’t infringed upon the copyrights of the film owner. In another opposition review litigation sued by DANJAQ LLC against the Trademark Review and Adjudication Board (TRAB) and the third party, the Judgment of first instance denied copyright protection to the fictional character names “007” and “JAMES BOND”.
It reflected the general views that the copyrighted works like a film or a book have been protected by the copyright laws, if the title of a work or the character name in the work is again granted for copyright protection, the owner of the film would enjoy double copyright protection, which is against the legislative purpose of the copyright laws.
(2) Protection granted to the interests embodied in the titles of works or character names by applying article 10.1.8 of the Trademark Law.
To safeguard the interests incorporated into the titles of works or character names, the Chinese courts were pursuing an appropriate way to decide the related trademark disputes. In the opposition litigation case regarding the opposed mark “HA LI BO TE Halibote”, the courts of first and second instances having considered the wide popularity of the character name “Harry Potter” and extensive registration and use of trademarks “Harry Potter”, decided the opposed mark if being registered and used, would bring “negative effects” as specified in article 10.1.8 of the Trademark Law. In the above-mentioned “007 JAMES BOND” case, though overruled by the Court of second instance, the Court of first instance once applied article 10.1.8 of the Trademark Law to reject registration of the opposed mark “BAND DE 007”. As the situations in which article 10.1.8 shall be applied has become clear, namely, it shall only be applied when the disputed marks themselves would bring negative impacts on the public rights and interest but not applicable to protect specific right owners’ interest, in these cases, this article is no longer applicable. Now, both the administrative and judicial authorities have abandoned citing this article to protect the interest embodied in well-known works and characters. Worth to be mentioned, during the period when the application of article 10.1.8 of the Trademark Law was not clear enough, the courts’ decisions have been positively judged, as they endeavored to realize the substantive justness in individual cases.
(3) Protection granted by defining the interests embodied in the titles of works or character names as “merchandising rights”.
“Merchandising rights” appear and become popular in the US judicial practices, and this kind of rights have been admitted in Australia, Canada and Japan. Merchandising rights are the right to market, sell, and license physical and tangible articles related to the copyright ownership, such as T-shirts, posters, action figures, games and so on. They are part of the cluster of “derivative” rights inherent in the copyright.
To defend against preemptions by others of the interested works’ titles or character names, right holders have been seeking protection by claiming “merchandising rights” in cases of this type. However, “merchandising rights” are not the statutory rights set out by the Chinese laws. The Chinese courts denied “merchandising rights” in earlier cases.
While to deal with the increasing preemptions of work titles or character names, in the subsequent judgments, “merchandising rights” had been expressly articulated and protected by the Chinese courts. In the above-mentioned “007 JAMES BOND” case, the Beijing High Court overruled the original judgment and granted protection to the “merchandising rights” attached to the reputable character names “007 and “JAMES BOND” in favor of DANJAO LLC with the rational that “007 JAMES BOND” as the character names in the reputed serial films of “007” should be protected to be preempted and it’s justified to protect the filmmaker’s interest in the outstanding commercial values and business opportunities through great investment. In the opposition review litigation case against the trademark “XUN LONG GAO SHOU” (HOW TO TRAIN YOUR DRAGON in Chinese), the Court of first instance denied copyright protection of the interests claimed by DREAMWORKS ANIMATION LLC. While in that case, DREAMWORKS also argued for “merchandising rights” protection, and the Court of first instance articulated the contents and boundaries of “merchandising rights”, expressly granting protection to “merchandising rights” of the film title “XUN LONG GAO SHOU”.
In the famous litigation against the opposition review decision involving the popular film Kung Fu Panda, the Beijing High Court confirmed that DREAMWORKS ANIMATION enjoyed prior merchandising rights over KUNG FU PANDA as the title of the film and the main character name, having rejected an attempt by a third party to register this mark.
These cases sparked extensive debate and most professionals have remarked, to expressly articulate “merchandising rights” in deciding trademark opposition or invalidation cases, the courts are making laws rather than making judicial
interpretations. As the contents and boundaries of “merchandising rights” are unclear, it has led to great inconsistences in judgments. Besides it has impaired the abilities of the relevant public to judge whether their actions would infringe upon the so-called “merchandising rights” owned by others.
(4) Prudent protection to be granted for now.
Considering the ambiguities and complexities of defining “merchandising rights”, in trademark administrative litigation cases, the Chinese courts now are very prudent in granting protection to the merchandising rights and interest alleged by the claimants and will not state or define “merchandising rights”.
Beijing High Court issued the Guidelines for the Trial of Trademark Right Granting and Verification Cases in 2019 and interprets, in the case that the law does not provide “merchandising rights and interest”, it’s not appropriate to directly use “merchandising rights and interest” and other concepts in the judgments. Article 16.19 further states, if the contents of “merchandising rights and interest” can be protected as the name right, portraiture right, copyright, the product (service) name with certain impacts and other rights or interest expressly provided by law, it’s not appropriate to determine “merchandising rights and interest” claimed by the party concerned. If other specific clauses other than article 32 of the Trademark Law are insufficient to provide relief to the party concerned, or the “merchandising rights and interest” cannot be protected on the basis of the circumstances provided in the preceding paragraph, when the specific conditions are met, “merchandising rights and interest” may be protected by the first part of article 32 of the Trademark Law as claimed by the party concerned. While it shall be determined generally pursuant to the provisions of article 6 of the Anti-unfair Competition Law.
With the updating of judicial interpretations and the developments of judicial practices, it becomes clearer about how to protect the interests embodied in the film titles or character names. In recent years, the Chinese courts have been defining the protectable interests following the provisions of the Chinese Anti-Unfair Competition Law and providing protection to the alleged interests in rejecting the opposed marks or cancelling the disputed trademarks in litigations.
In the invalidation litigation case concluded in 2019 by the Beijing IP Court against the trademark “BING XUE QI YUAN” (Frozen in Chinese), in the previous administrative proceeding, the China National Intellectual Property Administration (CNIPA) decided, the disputed trademark was filed in exploiting the commercial values and business opportunities of DISNEY ENTERPRISES, INC., obtained through the vast work and capital investment, and the prior “merchandising rights” should be protected. Registration of the disputed trademark has violated the first part of article 32 of the Trademark Law. During the court proceeding, DISNEY changed their claims over “merchandising rights” into “the product names with certain reputation”. The Court permitted the change of claims and affirmed, “the product names with certain reputation” is the statutory civil interests expressly stipulated by article 6 of the China Anti-Unfair Competition Law and it falls within the scope of “prior rights” set out in article 32 of the Trademark Law that can be protected. The Court further clarified, to protect “the product names with certain reputation”, certain requirements should be met. In this case, “merchandising rights” are denied by the Court, yet to realize substantive justness, the Court protected the prior interest of DISNEY by defining them as the protectable interest set out in the Chinese anti-unfair competition laws. The rational in this case has been widely accepted.
In another case concluded at the end of 2019, the Beijing IP Court decided against the invalidation decision of the CNIPA in concluding that, the alleged prior interest incorporated into the name of reputable game LEAGUE OF LEGENDS should be protected under the first part of article 32 of the Trademark Law, as the game League of Legends launched and developed by TENCENT had become highly reputable among the consuming public which has brought great business value and commercial opportunities through TENCENT’s continuous investment. Registration and use of the disputed trademark “LEAGUE OF LEGENDS” exploit the goodwill of the prior work and improperly injure the commercial interest of the work owner. It would also confuse the related consumers as to the sources of the goods, mashing the dominant market position and trade opportunities of the work owner.
In the announced typical invalidation litigation case, the Beijing IP Court decided against the registrant of the disputed trademark “WANG ZHE RONG YAO (Glory of Kings in Chinese) with the rational that, the computer game “Glory of Kings” enjoyed high reputation before the disputed trademark was filed, and its game name constitutes the protectable prior interests. The registrant of the disputed trademark had involved bad faith in considering the high reputation of the concerned game and the facts that the registrant submitted other infringing trademarks.
The Beijing IP Court overruled the CNIPA’s decision and decided for Tezuka Kabuskiki kaisha in another typical invalidation litigation case in concluding that, “TIE BI A TONG MU” and “A TONG MU” (Astroboy in Chinese), as the title of the comic and the name of the main character in the work had been widely advertised and broadcasted in mainland China before the filing date of the disputed trademark, which constitute the protectable prior work title and character names. The goods such as footwear of the disputed trademark are daily necessities, the disputed trademark being used on which would leads to the related public to confuse their sources with the owners of the prior works. Therefore, the alleged prior interests shall be protected as “prior interests” under the first part of article 32 of the Trademark Law.
In the invalidation litigation case nominated by the Beijing IP Court against the disputed trademark “XIAO YANG XIAO EN Shaun the Sheep & logo” being designated on the goods such as feeding bottles, the Court decided to cancel the disputed trademark by reasoning that, with extensive broadcasting on TVs and at online platforms, the alleged cartoon Shaun the Sheep had gained high reputation before the disputed trademark was filed, the role name “XIAO YANG XIAO EN” (Shaun the Sheep in Chinese) had been solely associated with the cartoon. The designated goods of the disputed trademark are often the tie-products in the industry. As the wordings of the disputed trademark are identical with the cartoon name, using it on the designated goods would readily render the related consuming public to mistakenly consider the goods are from the owner of the cartoon or the providers have certain connections. The registrant of the disputed trademark misappropriated the good fame of the cartoon and squeezed the market share of the owner. The Court further emphasizes, protecting reputable work titles, names and images of reputable characters as civil rights will trigger passions of creating the fruits of wisdom and more investments, boosting the developments and boom of cultural and scientific industries, which undoubtedly respect the legislative purposes of protection on intellectual property rights.
To be summarized, as “merchandising rights” are not legitimate rights set out by the Chinese laws, it will be hard to request express recognition of the elements of works as “merchandising rights” before the Chinese administrative and judicial authorities. However, when the claimed works have become successful and been widely acknowledged by the consuming public, when certain conditions are satisfied, the Chinese judicial authorities are willing to protect the prior interest embodied in the titles or character names acquired through the vast investment of work and capitals. According to current practices, whether the titles of works or character names can be protected as prior rights and interest, following factors shall be comprehensively considered,
- Whether the copyrightable works including the concerned titles of works or character names are within the protection term and whether the titles or character names enjoyed certain reputation before the disputed trademark is filed;
- Whether the disputed trademark is identical or similar with the concerned titles of works or character names;
- Whether the applicant of the disputed trademark has bad faith and the designated goods or services are within the coverage of good fame enjoyed by the prior works’ titles or character names;
- Whether the related public would easily misunderstand that the disputed trademark has been filed with the permission of the works’ owners or they have special connections.
If all the above factors weigh in favor of the work owners or the interested parties, the titles of works or character names therein should be shielded as “prior interest”, and the opposed or disputed marks as the bad faith preemptions should be refused or cancelled.
- How to protect titles of works or character names?
Merchandising is an important way to make profits after a work such as a film, game, or a book becomes popular. Trademark protection is vital because a work after merchandising may become an apparel brand, a toy brand, a brand of stationery and many other profitable goods. Therefore, trademark registration is effective to protect a work title or character name in copyrighted works, and a distinctive work title or character name is suggested as preference to be registered as a trademark.
As discussed above, since a work title or character name is not copyrightable, as they aren’t considered as a single creative work nor original enough to express an idea, copyright protection may not be a practical way to protect a work title or character name.
It’s feasible to claim protection over a work title or character name by defining the interests attached to it in pursuant to the provisions in anti-unfair competition laws. Looking into the Chinese courts’ present practices, the judges in preventing preemptions in trademark administrative litigation cases are protecting this kind of interests by defining them as the interests derived from “reputable product names” in the context of anti-unfair competition laws. Though the practices are not yet consistent, we have seen the direction to which courts’ decisions are heading and expect more landmark cases for a clearer picture.