(By Luo Yanjie) Pursuant to Article 31 of the Trademark Law: anyone applying for trademark registration may not damage the existing rights of others obtained by priority, neither may it register, in advance, a trademark that has been used by others and has become influential. In practice, consumers apply a “name” to a product, which can then be considered a kind of “trademark” for the product itself. Is such passive use attributable to prior use? In regard to this legal issue, there are no actual legal provisions speaking to it in Mainland China. However, the answer in today’s post appears to be a resounding no.
Introduction to the case:
Liu Jianjia applied for the “索爱SuoAi” trademark (“disputed trademark”) to the National Trademark Office on March 19, 2003; It was approved for use in class 19 for DVD Players, microphones, cabinets for loudspeakers, and telephones on August 7, 2004. Sony Ericsson brought a complaint to the Trademark Review and Adjudication Board (“TRAB”) in order to revoke the disputed trademark, alleging that Liu Jianjia registered its own trademark maliciously. In China, the public had become accustomed to the nickname “索爱Suo Ai,” when referring to “Sony Ericsson”. After a thorough review of Sony Ericsson’s complaints, the TRAB made the decision to uphold Liu Jianjia’s registration of the disputed mark. Dissatisfied with the decision made by the TRAB, Sony Ericsson filed a lawsuit.
The Beijing No.1 Intermediate People’s Court heard the case in the first instance, and held that: where “索爱Suo Ai” has obtained more and more approval by the public and mass media, and has a role in distinguishing different goods of a natural or legal person and qualities of the trademark’s products, “索爱Suo Ai”, as yet unadvertised and publicized by Sony Ericsson, has achieved essentially the same effects as using, and is regarded as a trademark used in China and owned by Sony Ericsson. The court supported Sony Ericsson’s claims. Liu Jianjia appealed against its judgment.
The Beijing Higher People’s Court heard the case in the second instance, and noted that a maliciously registered trademark shall be the one that has been used by others and had become influential; in addition, the court held that such a malicious use of a trademark should benefit the legitimate owner of the mark, and that party should be allowed to use the mark in commerce. Concerning the fact that Sony Ericsson had not used “索爱Suo Ai” as a mark in any commercial use at the time of the hearing, the court in the second instance found that the judgment handed down by the lower court lacked a sound legal basis. The Beijing Higher People’s Court reversed the decision made by the court in the first instance, and upheld the decision made by the TRAB supporting Liu Jianjia’s registration of the disputed mark.
This case is a rather typical case in determining whether passive use is equivalent to prior use. The second instance court’s view is worth thinking about, specifically:
I. “Passive use” is not attributable to “prior use” pursuant to Article 31 of Trademark Law.
In this case, Sony Ericsson invoked Article 31 of Trademark Law as its main legal basis to revoke the registration of the disputed trademark. Article 31 of Trademark Law reads: “anyone applying for trademark registration may not damage the existing rights of others obtained by priority; neither may it register, in advance, a trademark that has been used by others and has become influential”. The first instance court interpreted the term “prior use” as consisting of consumers’ use, i.e., use of a mark in this manner is considered to be “prior use” of a trademark. While this interpretation is conducive to the construction of an environment that encourages a fair and competitive market, it also constitutes an expanded interpretation of these provisions in the Trademark Law. Pursuant to laws and regulations that “prior use” shall be considered as “have been used by others”, the “others” looking from the whole context of the law should only be considered the “applicants” themselves. Based on this analysis, the court in the second instance determined that Sony Ericsson would lose its suit.
II. Sony Ericsson could have taken another approach to protect its legal interests.
Considering the fact that Sony Ericsson lost its lawsuit because it had never actively use the trademark “索爱”, in the author’s opinion, Sony Ericsson could have taken another legal approach to prevent use of the mark “索爱 Suo Ai”. If represented by our lawyers, Sony Ericsson could have proposed that “索爱 Suo Ai” constituted a substantially similar trademark to that of “Sony Ericsson”, on the basis that Sony Ericsson actively uses the mark “Sony Ericsson” as both a trademark and as a corporate name.
Taking into account Sony Ericsson’s scale and popularity, no matter whether Sony Ericsson had registered the “Sony Ericsson” trademark, Sony Ericsson could still obtain protections within relevant classifications. If “Sony Ericsson” were registered earlier than the “索爱 Suo Ai” trademark, we could provide Article 28 of Trademark Law, which states “If an application has been made to register a trademark that is similar to another person’s trademark which has been already been registered, the Trademark Office shall reject the current application” for reference; If “Sony Ericsson” is unregistered, pursuant to Article 13 of Trademark Law, we could claim that “Sony Ericsson” is an unregistered well-known trademark, taking into account its scale and popularity, which would deserve protection within its class from the later registered trademark. Hence, if Sony Ericsson revoked the “索爱 Suo Ai” trademark on the basis of the mark being substantially similar to its own, we do believe Sony Ericsson would stand a good chance in the courts.