(By Luo Yanjie) Today and tomorrow’s posts will introduce an administrative lawsuit recently decided by Chinese courts. The greatest focus point in the case is that the courts broke the barrier between trademark classes to hold that glasses and clothing are similar classes of trademark application.
According to China’s Trademark Law, trademark applications in China follow the “first application” principle. This means that for similar products whoever applies for a trademark first owns it and receives protection in that class, except for well-known trademarks, which receive cross-class protection. To determine what classes are identical or similar, the Trademark Office, Trademark Adjudication and Review Board (the “Board”), and other administrative institutions follow the Similar Products and Services Form that they promulgated. In practice, however, courts do not blindly follow this form. Today’s case is a prime example of the different opinions held by and different results reached by administrative organs and courts.
On December 9, 2003, Liang Zhiwei filed an application for the trademark “UMBRO茵宝” (the “opposed trademark”) in China’s Trademark Office. The application number was 3834824, and the application covered Class 9 of glasses, contact lenses, sun glasses, batteries, and other related products. UMBRO Inc. (“Umbro”) holds many similar trademarks in Class 25 (the “reference trademark”), which is the class for clothing. These have now been transferred to Nike.
After publication of the preliminary examination for the opposed trademark and during the legal opposition period, Umbro filed an opposition to the trademark and demanded that it not be approved. On October 14, 2009, the Trademark Office approved the trademark, holding that it was not similar to those held by Umbro.
Dissatisfied with the award, Umbro applied to the Board for the review. The Board then decided that the characters and image in the opposed trademark look the same or similar to those in the reference trademark when judged visually, which would be adequate to confirm them as similar trademarks. But, the opposed trademark would mainly be used on glasses, batteries, or charging equipment, which are different from the covered classes of clothing, footballs, and shoes covered by the reference trademark, a difference that is clarified by the main features of the product. For this reason, they are not similar products, and hence the opposed trademark does not constitute a similar trademark used on a same or similar class of goods as stated in Article 28 of the Trademark Law.
Furthermore, most of Umbro’s evidence used to prove the well-known status of the reference trademark developed after the application of the opposed trademark. Therefore, it cannot show the reference trademark’s reputation before the opposed trademark’s application date. Even if some of the evidence can demonstrate the claimed well-known status, it is still not enough to prove well-known as required by Paragraph 2 of Article 13 of the Trademark Law. For these reasons, the Board sustained the Trademark Office’s decision. After the transfer of the reference trademark, the assignee, Nike, filed an administrative lawsuit.
After the hearing, the Beijing No.1 Intermediate People’s Court (the “Beijing Court”) decided that the reference trademark’s image had high distinctiveness, and that the word UMBRO was created by its holder, which makes it unlikely that similar trademarks would be created by others. Additionally, the characters and image of the opposed trademark are the same as the reference trademark; the opposed trademark merely rearranged the characters and image of the reference trademark. Although the current evidence is not adequate to prove the reference trademark was a well-known trademark before the opposed trademark’s application, it can prove that the reference trademark had a certain level of recognition before the opposed trademark’s application through its use in China. The opposed trademark is used on products such as glasses and sunglasses, which are different in the Similar Products and Services Form from the clothing class covered by the reference trademark. Despite this, the products covered by the trademarks are linked to each other in use, sales place, and consumers. Under current market circumstances, it is rarely seen that the same brand of clothing and glasses are provided by the same operator, especially for well-known brands. Based on the above considerations, the co-existence of the opposed trademark and the reference trademark would lead consumers to mistakenly believe that the same operator provides the different products, or that they are linked with each other, and thus confusion or mistaking might occur. For this reason, the application of the opposed trademark in the class of glasses violates Article 28 in the Trademark Law. The Board’s decision was wrong and so the Beijing Court revoked the Board’s decision.
Dissatisfied with the first instance decision, the Board appealed to the higher court. The second instance court held that Article 29 of the Trademark Law regulates that:
“Where two or more applicants apply for the registration of identical or similar trademarks for the same or similar goods, the preliminary approval, after examination, and the publication shall be made for the trademark which was first filed. Where applications are filed on the same day, the preliminary approval, after examination, and the publication shall be made for the trademark which was the earliest used, and the applications of the others shall be refused and their trademarks shall not be published.”
When the court decides on whether products or services are similar, it must consider the function, purpose, manufacturer, and sales channels of the products. The International Classification Form of the Trademark Products and Services and Similar Products and Service Form can be the basis to decide the similar product or service. In the case, the glass and clothing covered by the opposed trademark and the reference trademark have close links in the above aspects. Therefore, the Board’s reasons for appeal cannot be supported, and the decision made in the first instance is sustained.