Highlight: To introduce the laws and regulations concerning the conflict between trademark and company names in China and matters in need of attention regarding foreign companies applying for in trademarks.
Case study: Beijing Baoma (北京宝马), the company of BMW Group’s first agent in mainland China and the first one translated BMW to the current popular Chinese name Baoma (宝马), which means speeding horse and has become a vivid symbol of their vehicles, was demanded to change its name by BMW Group, under the pressure that even more the parties may get litigated against each other.
Such case is just the one among many other similar cases concerning the conflict between trademark and company name in China. It remains uncertain for BMW to take back localized name of BMW from the agent, even the BMW is the accepted brand for this German vehicle manufacturer. The laws and regulations related to this issue will be introduced in this essay.
I. The pre-examination in registration of company establishment
It’s legal to register others’ trademark as a company name in China or vice versa, though they are both the unique distinction mark of a company and a significant carrier of its commercial reputation. The main reason is that, just like other countries, the protection on trademarks is by classes, therefore, those trademarks registered in certain classes are not exclusive for use in other classes or areas, with the only exception of the well-known trademark, which shall be examined for conflict in name application by administration. In the case mentioned-above, Beijing Baomao had been only registered the localized name of BMW instead of the trademark, and such registration was even earlier than BMW’s trademark registration in China, thus makes it more difficult for BMW to protect its legal rights.
II. Successful case of rights protection of foreign companies
Surely, foreign company’s victory is not unprecedented. Starbucks once won the support from the local court in Shanghai in a similar litigation, in which a local café, with the same name of Starbucks registered earlier than Starbucks’ trademark registration in China, is judged to change its name as claimed by Starbucks. Furthermore, Foxtown also won a similar legal suit.
III. The improper use of company names or trademarks may be illegal
As mentioned above, it’s not rare of “legal co-existence” between identical company names and trademarks to happen, while any improper use by its owner may violate the law. It has been regulated in Supreme People’s Court’s Judicial Interpretation in China, as well as State Administration for Industry and Commerce (SAIC).
By the Judicial Interpretations of high court, it shall be infringement once any company uses the words identical or similar to others’ trademark as its name, and also such names are noticeable on its products, which is most likely leading to the confusion upon recognition. Furthermore, as regulated by SAIC, any unfair competition resulted from the mix-up (or its possibility) for market subject or the source of products or services due to identity or similarity between one’s trademark and other’s company name shall be prohibited by law.
The following conclusion could be drawn basing on the above regulations:
1. Any one illegally using the trademark or name for the malicious purpose of confusing it with other products, which may lead to misunderstanding among consumers, could be construed of infringement on trademark or unfair competition based on its specific forms.
2. The possibility of consumer’s understanding of products is the important standard of illegality determination rather than its external form; from this aspect, once any used trademark or company name may lead to misunderstanding, then the party that is knowingly intending for such misunderstandings to occur will be alleged to be illegal, even if the trademark and company name share no common features.
IV. Importance of Localization for brands Protection for Foreign companies
It’s necessary for foreign companies to register their brands or company names as trademark, despite if the current conflict between a company’s name and trademark has been preliminary solved through legislature. The reasons are as follows:
1. The registered well-known trademark could be protected over classes, once the purposed misunderstanding occurs, the courts in China tend to support foreign companies in the determination of unfair competition.
2. Commonly, the un-official well known trademark not registered could be legally protected in its class, however, it’s difficult to combat malicious mix-ups against it by law, since it is unregistered and also not administratively established, which process and conditions are complicated and harsh.
Moreover, more attention on application skill is suggested to foreign companies when registering their localized trademark, the details are as follows:
1. Besides the most frequently used trademarks, the application of foreign companies shall also involve the Chinese name and figure of the trademarks, whether to register it independently or in combination, thus the comprehensive protection could be established.
2. We also suggest more related classes for registration to foreign companies when the diversity development is set for them, by which the rush-registration and hindrances for future development could be avoided.
Copyright reserved by Mr. You Yunting
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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