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04

OCT

2019

IP Research: Enforcement the right of a registered trademark when it is used by others as trade name

Announcement No. 326 of CNIPA on Restoring the Stamp Tax withholding and Collection


Regarding the collection of stamp tax when making the registration for Chinese patent, CNIPA issued an announcement on August 12, 2019 that CNIPA would stop the patent stamp tax withholding and collection since August 25, 2019, due to the adjustments made to the stamp tax collection business by CNIPA and taxation department. Taxpayers shall pay the stamp tax in accordance with the relevant provisions made by the state tax authorities from August 25, 2019.

On September 12, 2019, CNIPA issued a new announcement where it is decided that CNIPA shall resume the withholding and collection of stamp tax on patent and integrated circuit layout from September 16, 2019, in order to facilitate the patentee and the exclusive right holder to pay stamp tax according to law. For the stamp tax that has not been paid before September 16, 2019, it can go through the original payment channel after September 16, 2019.

According to the above announcement, please kindly note that our firm would resume the payment of the stamp tax on patent since September 16, 2019, and would go through the remedial payment formalities for the stamp tax that hasn’t been paid before September 16, 2019.

Date: September 11th, 2019

Source: National Intellectual Property Administration, PRC

Summary and analysis of administrative litigations of trademark adjudication cases in 2018 (Excerpt)


I. Basic situation of responses to litigations (as defendant) in 2018

In 2018, the trademark adjudication department decided a total of 265,200 cases, and received 11,510 notices for response to the first-instance litigations in the whole year. The number of responses to the first-instance litigations accounted for 4.34% of the total number of decided cases, down 1.2 percentage points from last year. In 2018, 4,120 notices for response to the second instance litigations were received, and 420 cases were entered into the retrial hearing procedures or retrial procedures at Supreme People's Court and Beijing Higher People's Court. In 2018, the trademark adjudication department received a total of 10,633 first instance judgments (including 561 rulings), of which 2,840 were lost, and among them 1,205 cases were lost due to change of situation, accounting for 42.4% of the total number of the lost cases. Excluding the cases lost due to change of situation, the actual losing rate of first instance litigations was 15.4%; a total of 3,732 judgments (including 67 rulings) were received from the second instance court, of which 1,243 were lost, and among them 350 cases were lost due to change of situation; in 2018, a total number of 354 retrial court judgments and rulings was received, including 35 cases involving change of situation.

II. Main features

1.The total number of responses to litigations in respect to trademark adjudication cases continued to grow, and the proportion of responses to litigations remained stable with a slight decline.

In 2018, the total number of responses to first instance litigations exceeded10,000 for the first time, with an increase of more than 2,000 pieces over last year, which continued the consistent growth trend, but the proportion of responses remained stable with a slight decline. According to the data of the past three years, the number of adjudication cases has increased significantly for three consecutive years, but the proportion of responses to litigations has basically stabilized at around 5%, and about 95% of the cases have been resolved in the adjudication procedure. This fully demonstrates that the adjudication procedure takes into account both efficiency and fairness and plays an important role in resolving disputes over trademark right granting and verification. It also shows that the administrative authorities and the judiciary authorities have increasingly formed consensus on certain major legal issues, and the involved parties form a stable expectation to the result of the case and thus accept the adjudication decision. The following is a list of responses to the first instance litigations in respect to adjudication cases in the years from 2016-2018:

Year

Number of rulings (10 thousand)

Number of responses to litigations (10 thousand)

Proportion of responses to litigations

2016

12.52

0.53

4.27%

2017

16.89

0.93

5.5%

2019

26.52

1.15

4.3%

2. A significant difference in the proportion of losing cases in different types of cases

For the 10,633 first instance judgments received in 2018, we counted the losing rate of various types of cases, of which the total number of lost cases in respect to refusal of trademark applications was relatively higher, but mostly the loss was due to change of situation and the actual losing rate for this type of cases was only 7.5 %. The number of cases of disapproval of registration application (including appeal of opposition) was much less than other types of complex cases. Considering the trademarks failed to get registration through both the opposition and appeal procedure, the involved parties would have been less willing to file litigation, so the litigations corresponding to this type were less, and the actual losing rate was also less than 10%. The actual losing rate of the invalidation and the appeal of non-use cancellation cases, which are two types of complex cases, are much higher, and the latter one was even close to 30%. Even if some cases were lost because of new evidence, the majority of losing cases still show the difference between the administrative and judicial organs in the determination of certain facts and the application of laws. It is necessary to sort out and analyze the differences in order to further unify understanding and improve adjudication of administrative cases concerning granting and verification of trademark right. The following is the classified statistic of the first instance judgments in 2018:

Type of cases

Number of judgments

Number of Lost cases (Number of Lost cases caused by the change of situation)

Losing Rate (losing rate excluding the lost cases caused by change of situation)

Appeal of refusal of trademark application

5870

1625(1186)

27.7% (7.5%)

Appeal of disapproval of application (including appeal of opposition)

303

33(5)

10.9% (9.2%)

Invalidation

3274

828(14)

25.3% (24.9%)

Appeal of non-use cancellation

1186

354(0)

29.8% (29.8%)


3.The change of situation has become the main reason for losing the cases, and the proportion of reasons for losing the cases has changed significantly.

For the statistics of the losing first instance cases, the proportion of the main reasons for losing in 2018 and the corresponding situation in 2017 are shown in the following table:

Reason for losing

2018

2017

Change of situation

42.4%

28.4%

Trademark similarity

16.2%

21.1%

Goods similarity goods

6.2%

5.4%

Problem of non-use for three consecutive years

13%

12.6%

Famous trademark

3.9%

2.3%

Distinctiveness

2.5%

6.8%

Procedure and other issues

2.5%

3.9%

Prior right

2.6%

2.4%

Registration through deceptive or other unfair means

3.3%

1.7%

Article 10(1)(vii)

1.8%

1.9%

Article 10(1)(viii) “Unhealthy influence ”

1%

5.4%

Pre-emptive registration of a prior trademark that has been used earlier and obtained certain popularity

1.1%

1.2%


As can be seen from the above table, the proportion of reasons for lost cases in 2018 due to change of situation, determination on similarity of goods, determination on trademark use evidence, famous trademark, and “registration through other unfair means” under Article 44(1), has increased significantly. However, the proportion of reasons for lost cases due to determination on similarity of trademarks, unhealthy influence, distinctiveness and procedure issue has dropped significantly. The proportion of other reasons is basically the same as last year.


Date: September 3rd, 2019
Source: Chinese Trademark Magazine
Author’s affiliation: Department of Litigation Response and Review, Trademark Office, CNIPA

_____________________________________________________________________________________

Enforcement the right of a registered trademark when it is used by others as trade name

Beijing Wei Chixue Law Firm

Chinese attorney-at-law

Bella (Meiyan) Li

Trademark and trade name are both important business signs to identify the source of products and services. In practice, it is not uncommon to use a trademark of others with certain popularity as trade name. Different forms of infringements are regulated by different laws. During the enforcement the right, it is advisable to take most appropriate legal action according to the severity and circumstance of infringement.

1. Forms of infringement, relevant laws and regulations, elements for infringement determination

The act of noticeably using the trade name in the enterprise’s name constitutes trademark infringement in accordance with the Article 1 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Trademarks in Civil Disputes, and such act is regulated by the Trademark Law. Therefore, the trade name shall be used in accordance with the laws and regulations, and shall not be used noticeably. Noticeable use mainly refers to the situation that the font, size, color and arrangement of the trade name are more prominent than the rest part of the enterprise name.

The act of registering and using a trade name that is identical with or similar to a prior registered trademark is mainly regulated in accordance with the principle of good faith as stipulated in Article 2 of the Anti-Unfair Competition Law.

In addition, if the prior trademark is a famous trademark, according to Article 2 of the Interpretation of Several Issues on Application of Law on Trial of Civil Dispute Cases Involving Protection to Famous Trademark by The Supreme People’s Court, the right holder may initiate a trademark infringement lawsuit of an unfair competition lawsuit when the enterprise name is identical with or similar to the famous trademark.

Whether or not the later trade name infringes upon the right of other’s prior registered trademark mainly depends on the following factors: the popularity of the prior registered trademark, the subjective state of the later trade name user, the manner of the trade name being used, whether the trade name is used noticeably, etc. Finally, all the above factors will be considered comprehensively in order to determine whether confusion and misunderstanding is likely to be caused. Confusion and misunderstanding hereof mainly refer to whether the relevant public is liable to mistake the origin of the products or services. In practice, it is mainly determined by the judge's subjective cognition, taking into account a number of factors such as trademark popularity.

2. Ways to resolve the dispute

For the act of registering and using a trade name that is identical with or similar to the prior registered trademark, the trademark owner may require the accused enterprise to bear civil liabilities such as cessation of use, alteration of use, standardized use, damages and so on. According to our years of experience in safeguarding rights, the following steps could be taken to deal with related disputes.

Warning and negotiation

In general, for the infringement with clear facts and less serious circumstances, it may be resolved through a warning letter and negotiation. Some infringers knew the existence of the trademark of the right holder, but tried to “free ride” when they register their own trade names. After receiving a warning letter from the right holder, under pressure they are possible to agree to the relevant requirements of the right holder. As a representative of a well-known brand in lactobacillus milk beverage industry, we sent a warning letter to Company A in respect to their suspected infringing act of registering and using a trade name which is identical with our client's well-known trademark without authorization. Through the communication, Company A understood the risk of infringement, and changed its trade name that was neither identical with nor similar to the client’s trademark within a few months upon their receiving of the warning letter. However, there still exist some more stubborn infringers who would insist that their business names have been legally registered and there is no infringement. At this point, further action is needed to safeguard right.

Administrative investigation

It is a good choice to take administrative investigation when the problem cannot be resolved through warning and negotiation, or the infringement is more serious and the trademark owner wants the suspected infringer to be punished accordingly. In the practice of administrative investigation in the past few years, a more commonly happened situation was that the suspected infringing enterprise changed its trade name voluntarily as being persuaded by the officer of the administration of industry and commerce and under the administrative power when the suspected infringing products were found and the administrative investigation was conducted to seize the inventory of the said infringing products. In the practice of administrative investigation in the past two years, it is felt improvement of the level of law enforcement by the administration of industry and commerce. Now, existence of infringing products become unnecessary, as long as there is the act of registering and using the registered trademark of another person as trade name which is determined to have constituted infringement, the administration of industry and commerce would explain to the infringer about the infringement issue and let the involved enterprise change the trade name. It should be noted that after the institutional reform in 2018, there are market supervisory authorities whose competence among different departments is not very clear, and some infringing act may be dealt by more than two departments. Thus, it is necessary to communicate well which department is to be responsible for the case through phone before applying for investigation. We have handled a number trade name disputes in which the market supervisory authorities actively cooperated with the trademark owner enforcing right considering sufficient infringement evidence and popularity evidence of the prior trademark we have prepared and submitted, and our detailed explanation therefore. With the help of the local market supervisory authority, the alleged enterprises finally changed their trade names successfully.

The level and capability of law enforcement of each market supervisory authority are different, and not all market supervisory authorities would actively cooperate with the right holders to have the suspected infringer to change its trade name. Especially in the case where the later trade name is not identical with the prior trademark, it may be more difficult to make an infringement determination for the staff of the market supervisory authorities. At this time, litigation may be an option.

Civil litigation

Even if a warning letter is issued or an administrative investigation is initiated, it may be difficult to obtain an ideal result for a serious infirming act but with delicate situation in similarity determination. Under such circumstance, the trademark owner may resolve the dispute by filing civil litigation. Although it is relatively costly and time-consuming, civil litigation can ensure that the trade name dispute is dealt with. If it is found that it constitutes infringement or unfair competition, the court will order the later trade name holder to change the name of the enterprise within the prescribed time limit. Moreover, it is also an opportunity for the trademark holder to request famous trademark recognition by the court in the litigation. Besides, the trademark holder may obtain damages. Nowadays more and more attention has been paid to the protection of intellectual property rights. Millions of damages were already old news. To obtain higher damages, the trademark owners need to collect and preserve more evidence to prove popularity of the trademark and evidence to prove profit obtained by the accused infringers.

――― F16 Tower C, Beijing Global Trade Center, 36 North Third Ring East Road, Dongcheng District, Beijing 100013 P. R. China Tel: +86-10-5825-6366 (office) Fax: +86-10-5957-5201 (office) Email: ipnews@lindaliugroup.com Website: http://www.lindapatent.com ―――

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