(By Luo Yanjie) In determining the similarity of two trademarks, one must take into account the common understanding among the public as to the trademark and the goods it presents (as well as the source), and the public’s comprehension of the words, pictures, designs, or a combination of all of the above. Concurrently, however, the reputation of the trademark must be taken into consideration in order to determine whether the above factors would lead to confusion as to source among the relevant consumers and market. Generally, trademarks are judged by their similarity with the appearance of another trademark; however, in the following described case, the second instance court also considered the reputation of the reference trademark and the understanding of the consumer in relation to a more comprehensive protection of a well-known brand. The significance of the case is primarily that, due to the millions of trademark applications made in China each year, even subsequently registered trademarks that are incredibly similar to those previously registered may be approved for commercial use by the China Trademark Office, due to strained and restricted resources on its part. In any case, the trademark involved in this case is a well-known one, and for this reason, the court decided that the subsequently registered mark would not be approved for use.
Shijiazhuang-based Shen Long Oil Chemical Co., Ltd. (“Company S”) filed an application with the Trademark Office for the mark “冰雕BINGDIAO” numbered 1904566, on August 13, 2001. The application covered Class 3 products, including soaps and related washing powders. Nice Company (“Company N”) opposed the application for registration within the applicable period, arguing that the newly applied trademark was substantially similar to its previously registered marks, No. 1086707 (“reference 1”) and No. 1086708 (“reference 2”). The Trademark Office issued its decision regarding Company N’s “冰雕BINGDIAO” Opposition, and subsequently approved Company S’s application for the BINGDIAO mark. Dissatisfied with the Trademark Office’s decision, Company N applied for a further review, but the Trademark Review and Adjudication Board (“Board”) upheld the original decision approving of the mark’s registration. Still dissatisfied with this second reviewing decision, Company N filed a lawsuit in court, and a judicial decision to maintain the adjudication was issued.
The Second Instance Court (Beijing Higher People’s Court) after hearing arguments that the evidence presented by Company N in the review procedure, found that it could prove the trademark “雕” had been used in its washing products, and had a relatively well-known reputation prior to filing its opposition to Company S’s application for registration. Moreover, the trademark had been granted the title of “well-known trademark” on its washing products. All these factors showed that Company N’s mark carried a high degree of distinctiveness, and the word “雕” was considered to have a close connection with Company N; therefore, consumers would not immediately consider the meaning of the word itself, but rather its association with Company N’s washing products. The trademark in opposition, therefore, could be considered a substantially similar trademark, especially considering the reference to one in the same class or similar classes. For this reason, the court did not approve of its registration.
The reason why the second instance court would have made a different decision in this dispute is mainly because it represents a break-away from the accepted methods by which the similarity of trademarks is ascertained, by making a comprehensive judgment in regard to this issue, considering both the reputation of the mark and its reputation among consumers. Our analysis is as follows:
1. The extended protection granted by the court for well-known trademarks
It is common knowledge that well-known trademarks receive more comprehensive protection as compared with less common trademarks. In general, however, this can be seen as lateral and cross-class protection (legal basis: Article 13 of the Trademark Law). In this case, the second instance court granted a more comprehensive vertical protection for the well-known trademark, thereby applying a more strict examination of those substantially similar or identical trademarks subsequently applied for or registered with the Trademark Office.
Despite the law having no statutory regulations requiring the court or trademark office to apply this type of deferential treatment, if we look at it from the legislature’s purpose in applying Trademark Law and its interest in maintaining a fair transactional order, the author completely supports the decision made by the second instance court. Why? The main function of a trademark is to distinguish a products’ origin and encourage and foster the good reputation of a well-known trademark. Keeping these ultimate overarching goals in mind, it would be counterproductive to allow others to subsequently adopt substantially similar marks for its products; this would ultimately harm an environment of fair competition in the market. For the applicant in the above case, this may even encourage them to concentrate more on the creation of their own brands, instead of free riding off the hard work of others.
2. Whether consumer confusion is the only standard by which to determine the similarity of two trademarks.
In this case, although the second instance court had no specific legal basis supporting its decision, it nevertheless granted a higher-level protection for a well-known trademark, unlike the protection generally granted to common trademarks. In looking at the scenario from another point of view, one could reasonably conclude that this type of “special” protection also meets the ultimate goal of trademark protection, and furthers the legislation’s intentions in promulgating the law. As provided in the Interpretation on Several Issues concerning the Application of Law in the Trademark Civil Dispute Trials:
“The similarity of the trademark refers to the accused infringing trademark being similar to the plaintiff’s trademark, comparing the literal reading, meaning, appearance and color, or the similarity of their combination, or the similarity of its shape, color or their combination, which would cause the general public to be mistaken or confused as to their origin or assume connections with manufacturers that do not exist.”
It can be concluded from the above regulations that similar trademarks often result in consumer misunderstanding, and due to the high rate of recognition among consumers regarding a well-known trademark’s reputation, once such similarity is determined, consumers would naturally associate the two. In looking at the issue from this aspect, the second instance court in this case gave a well-known trademark more comprehensive protection, and we believe such a decision to be sound and within the boundaries of the law.