China Supreme Court Approved Passive Use as the Use of Trademark

(By Luo Yanjie) Trademark is to distinguish the goods and services from different trademark owners. However, if the public voluntarily called it another name and made use of it, then does such use still constituted the use of trademark as regulated in the Trademark Law. If you want to know more, please read the next posts.

Introduction to the Case:

Re-appellant (third party at first instance and appellant at second instance): Gui Pufang

Re-respondent (plaintiff at first instance and respondent at second instance): Guangdong Tea Imp. & Exp. Co. Ltd (the “GDT”)

Defendant at first instance: Trademark Review and Adjudication Board (the “TRAB”)

Court of final appeal: Beijing Higher People’s Court  No.: (2013)高行终字第298号

Gui Pufang filed a trademark application of “广云贡饼” sign (the “disputed trademark”) under Class 30 for tea in 2005. The GDT, a company which Gui Pufang once worked, opposed that the disputed trademark was already in use and enjoyed substantial influence against Gui Pufang’s application. Through the trademark review, first instance and second instance, the GDT finally won the case. However, Gui Pufang was dissatisfied with the judgment and applied for re-trial, reasoning that the GDT only used two trademarks of “金帆牌” and “中茶牌” in its operation but cannot proved its use of the disputed trademark in accordance with the Trademark Law prior to the application date. Also, the “广云贡饼” was called by industry insiders for GDT’s goods, so that “trademark passive use” was too immature to be a reasoning in the judgment.

The Supreme People’s Court held the following after hearing the case:

  1. Any visible sign that distinguishes the goods of a natural person, legal person, or other organization from those of others, including any word, device, letter, number, three-dimensional sign, and color combination, or the combination thereof, may be registered as a trademark.
  2. The question of whether a sign could become a trademark lies not in the passive use or active use of the sign, but rather in whether the corresponding relationship is established between the sign of the goods and the manufacturer. In this case, the manufacturer had already set up a corresponding relationship with the disputed trademark.

In closing, the Supreme People’s Court rejected the re-trial application of Gui Pufang and affirmed the original judgment.

Lawyer’s Comment:

  1. Our previous judicial practice generally is not convinced trademark passive use.

Trademark passive use means that a trademark was not in active use by trademark owners, but was called by customers and medias. The use of trademark as stipulated in the Trademark Law refers to the affixation of trademark for commercial activities, but never explains what passive use is. Seen from the previous judicial practice, some judgments from different courts have also been broadly negative about the trademark passive use. Taken “伟哥” and “索爱” for examples, the court determined that either the “伟哥” or the “索爱” were, short for “万艾可” (translating from Viagra in English ) or “索尼爱立信” (translating from “Sony Ericsson” in English), unproven that the trademark owners used the abbreviation as their brands so that neither the “伟哥” nor “索爱” was regarded as their trademarks.

  1. The Supreme People’s Court’s judgment accepts “trademark passive use” to some extent.

In this case, the court got over its self-cognition, considering that the question of whether a sign could become a trademark lies not in the passive use or active use of the sign, but rather in whether the corresponding relationship is established between the sign of the goods and the manufacturer. Moreover, as a trademark is a private right, trademark owner also be entitled to give up the rights due to the principle of private law autonomy.

In my opinion, the point in the judgment is more scientific because it is a fact that customers have already established a corresponding relationship between goods and the manufacturers either in passive use or active use. If the sign could be registered by another party due to its passive use, it is undoubted causing damages to actual manufacturers. Besides, in this case, the disputed trademark registered by Gui Pufang shall be rejected owing to its subjective maliciousness.

Lawyer Contacts

You Yunting86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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