How did Lenovo Utilize Its Well-known Trademark to Defense against a “Free-Rider”?

图片1(By Luo Yanjie) Abstract: In today’s post, we will introduce a typical case discussing Lenovo’s defense against a “free rider” utilizing its well-known trademark. In this case, when Lenovo claimed cross-class protection for its Lenovo trademark, the court established two rules in its decision, which are as follows:

First, “misleading the public and causing injury to the interests of the registrant of a well-known trademark” is a legal basis for whether or not a well-known trademark may receive cross-class protection.

Second, in relation to whether the same or similar trademarks under different classifications are able to cause confusion among the relevant public when utilizing a well-known trademark, the burden of proof shall be on the subsequent trademark applicant.

On April 17, 2000, Shenyang Liangchuan Trading Co., Ltd applied for the“联想LianXiang” trademark, numbered 1573423 (the “disputed trademark”. Note: “Lianxiang” is the Pinyin Romanization for the “Lenovo” Company when written in Chinese) under classification 25 for clothes, shoes and hats.

Afterwards, Lenovo (Beijing) Company filed an application for objection against the registration of the mark with the Trademark Office within the statutory period, alleging that its “联想Lianxiang” trademark, numbered 520416 (the “quoted trademark”) under classification 9 for microcomputers and computer peripheral equipment, was determined to be a well-known trademark on January 5, 1999, well  ahead of the registration day for the disputed trademark, and that the disputed trademark is simply a copy and can constitute infringement and plagiarism pursuant to Article 13 of the Trademark Law.

The Trademark Office, upon review, rejected Lenovo’s objection and published the disputed trademark after a preliminary examination. Dissatisfied with the rejection handed down by the Trademark Office, Lenovo applied to the Trademark Review and Adjudication Board (the “TRAB”) for a reexamination. The TRAB, however, affirmed the Trademark Office’s decision and approved the disputed trademark for registration. Lenovo refused to accept the TRAB’s affirmation and instituted a legal proceeding with the Beijing No.1 Intermediate People’s Court.

The Beijing No.1 Intermediate People’s Court, after hearing the arguments presented by both sides, held that, where the quoted trademark is not a fabricated trademark, on the premise of the quoted trademark being a well-known trademark, the disputed trademark under classification 25 for clothes, shoes and hats may, however, be approved for registration with co-incidence or goodwill in accordance with evidence provided by the applicant. For this reason, because of the fact that the quoted trademark is a well-known trademark, registering the disputed trademark under classification 25 would lead one to reasonably presume that such use of Lenovo’s trademark would mislead the public and cause to public to incorrectly create a link between the two parties that does not exist. Taking into account the fact that this misleading of consumers would result in confusion and misunderstanding regarding the source of goods, the court repealed the TRAB’s affirmation and asked the TRAB to hand down a new decision. Although the TRAB appealed, the Beijing Higher People’s Court affirmed the decision in the first instance.

Lawyers Comments:

The key problems in this case are the scope of well-known trademark protection and the rules regarding the burden of proof in judicial practice.

1. Legal and Regulatory Foundation of the Judgment

Paragraph 2, Article 13 of the Trademark Law stipulates: Where a mark is a reproduction, imitation, or translation of a third-party’s famous trademark which has been registered in China and where the goods are not identical or dissimilar, which may mislead the public and cause injury to the interests of the registrant of the famous trademark, no registration shall be granted and the use of the mark shall be prohibited. This means, “misleading the public and causing injury to the interests of the registrant of the well-known trademark” is a statutory foundation for cross-class protection of a well-known trademark. According to the Trademark Review and Adjudication Standards, similar stipulations also exist, i.e., “the extension of the scope of protection for a well-known trademark for products that are not the same as or similar to those represented by the well-known trademark shall be subject to the precondition or likelihood of confusion or misconception.”

2. The Distribution of the Burden of Proof Set down in This Case

Despite determining standards as previous stated, in fact, the aforementioned determining standard has no corresponding objective standard in practice, because whether goods can be confusing in and of themselves is a subjective judgment; therefore, the court always utilizes well-known trademark recognition, goods association, and the “originality feature of trademark or applicant’s subjective states”, etc., to make a comprehensive decision.

Even within said factors, in practice, it is still difficult to determine, so similar cases are in prevarication. In this case, in order to avoid such prevarication, the first instance court established a distribution of the burden of proof that, if the applicant cannot approve the disputed trademark under classification 25 for clothes, shoes and hats registered with co-incidence or goodwill, the disputed trademark shall be determined as causing confusion by default; thus, the application for the disputed trademark shall be rejected. For these reasons, the court upheld that, in regard to whether a trademark with different classifications will cause confusion with the well-known trademark, the subsequent applicant should bear the burden of proof. In other words, the subsequent applicant must able to evidence its registration with goodwill and provide reasons as to why the subsequent registrants’ use of the mark will not cause confusion; otherwise, it will be rejected.

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