Why Couldn’t the “CASTEL” Trademark Prevent AnotherFrom Registering As Enterprise Name?

castel(By Luo Yanjie ) Abstract: Generally, the trademark-right and the right of an enterprise-name are independent of each other. However, these rights, which also act as an enterprise-business-mark-right and are comprised of an intellectual property right, are likely to be so similar in their nature and characteristics that they may objectively cause disputes. To reach a judgment on whether there has been a breach of the principle of good faith and recognized commercial-morality as regulated in the anti-unfair Competition Law, the court would make a judgment based on the particular circumstances of a case.

In our previous post, Why Did the Supreme People’s Court Changed Its Attitude towards Revoking Trademarks When It is Unused for 3 Years, the French CASTEL FRERES tried to cancel the number 1372099 “卡斯特” trademark (a translation from word “Castel”) in China but failed. In today’s post, the right holder of “卡斯特” trademark intended to prevent the French CASTEL FRERES from using Chinese characters “卡斯特”.

 Introduction to the Case:

Plaintiff: Shanghai CAVESMAITRE

1st Defendant: French CASTEL FRERES SAS

2nd Defendant: Beijing Wal-Mart Supercenter, Zhichun Road Branch

3rd Defendant: Beijing Wal-Mart Supercenter

Court of first instance: Beijing No.1 Intermediate People’s Court  No.: (2011)一中民初字第10292号

Court of second instance: Beijing Higher People’s Court  No.: (2013)高民终字第258号

Shanghai CAVESMAITRE, the licensee of an exclusive right to use the number 1372099 “卡斯特” trademark (read a “Ka Si Te” in Mandarin; similar to the phonetic pronunciation of CASTEL in Chinese) in China, purchased a wine, and labeled it with the following Chinese characters: “法国卡斯特兄弟股份有限公司荣誉出品” (Translation: honor-produced by French CASTEL FRERES SAS) This was produced by French CASTEL FRERES SAS, in the Beijing Wal-Mart Supercenter, Zhichun Road Branch. Shanghai CAVERSMAITRE brought this to the court on the allegation of unfair competition, claiming that French CATSEL FRERES SAS and its Shanghai representative should cease to use words ”卡斯特” and also seeking an order to the effect that Wal-Mart Supercenter shall stop selling such wines.

Beijing No.1 Intermediate People’s Court and Beijing Higher People’s Court heard the case and held that:

1.  According to the knowledge of an individual translator, translations from foreign languages into Chinese are various. In practice, it is difficult to translate a sentence from a foreign language into the same Chinese sentence using different translators. For various Chinese translations to the same sentence from a foreign language, it is difficult to determine which translation is more representative of common usage, except on submission of evidence that could prove relevant publicity, allowing the recognition of a particular Chinese translation as a unique translation. Therefore, it shall not be improper to translate “CASTEL FRERES SAS” into “卡斯特” company.

2. Since the establishment of the CATSEL FRERES SAS Shanghai representative office was approved by the relevant departments of Industry and Commerce in 2003, no evidence was produced which proved that anyone had filed an opposition of the enterprise name registered in the relevant departments of Industry and Commerce under any name. Therefore, the act of the defendant in registering “卡斯特” as an enterprise name of its Shanghai representative office, corresponded to the Chinese translation of CASTEL FRERES SAS, and was not illegal in accordance with relevant laws and regulations in China.

Finally, the two courts dismissed all the claims of the plaintiff.

Lawyers’ Comment:

1. A trademark identical to an enterprise name may not necessarily constitute an infringement.

Generally, the trademark-right and the right of an enterprise-name are independent of each other. But these rights, which also act as an enterprise-business-mark right and are comprised of intellectual property rights, are likely to be so similar in their nature and characteristics that they may objectively cause disputes. For example, under Paragraph 1, Article 1 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in Hearing Civil Cases Related to Trademark Disputes ,the act of using words identical or similar to another’s registered trademark as a trade-name in a distinctive manner on identical or similar goods, such that this could cause possible confusion among the relevant public, constitutes trademark infringement.

In this case, however, despite the enterprise-name of the defendant being identical to the plaintiff’s trademark, it objectively does not produce confusion among the relevant public. Therefore, the court decided the defendant didn’t infringe under trademark law, but instead made a review on the ground of the principle of good faith as regulated in the Anti-unfair Competition Law. Based on this judgment we can conclude that the right-of-enterprise-name does not necessarily constitute conflict with the trademark right.

2. The court shall make a judgment on the grounds of the legitimacy of the enterprise name subsequently registered.

There is no objective standard or laws and regulations to determine the principle of good faith and recognized commercial morality as regulated in the Anti-unfair Competition Law. In hearing the relevant case, the court will make a judgment on particular circumstances of each case. In this case, the reasons why the court decided the defendant to non-infringement rely on in the following:

(1). Whereas the wine produced by CASTEL FRERES SAS itself are of high awareness and popularity, at the beginning of the registration of “卡斯特” as an enterprise-name, CASTEL FRERES SAS did not have the subjective intention to use the popularity of the plaintiff’s “卡斯特” trademark.

(2). CASTEL FRERES SAS did not use words “卡斯特” as a trademark, or use it as the most prominent branding. Therefore, objectively, there is a low possibility of producing confusion among consumers.

(3). From the aspect of common sense and legitimacy, the enterprise name “卡斯特” is translated from the French word “CASTEL” and thus are likely to be legitimate.

All of the above facts and judgments proved the defendant did not disobey the principle of good faith as regulated in the Anti-unfair Competition Law. It is notable that the courts made the judgment according to the factual circumstances of the case.

Lawyer Contacts

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

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