—Judicial Solutions to the Conflict between Company Name and Trademark Right in China
Highlight: The free-riding on the well-known trademark is not rare in China for the startups’ eagerness of rapid development, some ones may even register such marks as their company names. Bridge IP Commentary will introduce you the key elements in the trademark right protection for trademark owner.
Recently, China’s Supreme Court released the Annual Ten IPR Cases in China, among which a case concerning the conflict between company name and well-known trademark heard in Xi’an Intermediate People’s Court of Shaanxi Province gets the attention of Bridge IP Commentary. In the case, a company established on 28th March, 2000 in Jinghua City of Zhejiang Province altered its name to Zhejiang Nikon Co., Ltd., which mainly sells bikes and scooters and applied for trademark registration. That discontented century-old Nikon Corporation (TYO:7731) and aroused the legal battle. Zhejiang Nikon was finally sentenced to abandon the registration, alter its infringing name and take the compensation liability.
It’s a typical well-known trademark free-riding case. Normally, the right of company name and trademark are two independent and co-existing rights in China, which will only get in conflict against each other on the abuse-using of company name. It’s not rarely reported by medias in China that someone registers others’ well-known trademarks as their company names for the purpose of confusion in the market.
Such conflict is a global problem. Although to forbid the registration of company name for the earlier-registered trademark could guarantee the benefits of IPR owner, it is not conducive to social benefits for there regulates 45 classes in trademark registration. For this reason, it’s not prohibited to register the normal trademark as company name in China. It’s not rare to free-ride on the well-known trademarks on the primary stage of market economy in China for the rapid expansion of the company.
Bridge IP Commentary several elements may contribute to the company’s judgment on the success rate when against the infringement:
1. Is there any prominent presentation of the company name as its “brand” by the name owner?
According to China laws, all products are required to tag the manufacturer. In other words, the company must be marked on the product. But the company name is not a trademark, which cannot be used as a “brand”. And the conflict against the registered trademark may be aroused by the prominent presentation of such company name which tend to make consumers mistake it as a “brand”, while the normal mark of the manufacture will constitute no infringement. This is the fundamental factor for determining whether there is a conflict.
2. The time sequence of the registration of trademark and company name
The court tend to judge the owner of the company name be malicious shall the name is granted after the registration of trademark and also such mark is well-known or noted one, thus may be helpful to the determination of the free-rider’s liability. Surely, for the late entering of the famous international brands, the “malicious” could not be determined solely on the comparison of the time sequence, and the popularity of the trademark when the company name is registered shall be taken into consideration on such decision.
3. The comparison on the popularity of the company name and trademark
In similar cases, the trademark involved is generally noted, though there may be exceptions. And it shall not be identified as free-riding if the company name is not used in the registered class of the trademark when the name is more popular than the trademark.
Since the conflict between company name and the trademark is a long standing problem, the courts in China are taking the unified settlement standard on such conflict and the above is the analysis by Bridge IP commentary on such standard and for companies’ reference.
Copyright reserved by Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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