By Albert Chen

For the prior approval on the company name by the administration of industry and commerce as well as the preliminary examination by the trademark authority in China, no material checks on any conflict against first rights would be conducted. And that has resulted in the numerous conflicts between the trade name and trademark. In today’s post, you could see our opinions on the settlement of the conflict.

I. The administrative way

It is feasible to settle the trademark and trade name conflict through administrative way in China. By Opinions on Several Issues concerning the Settlement on the Conflict between Trademark and Trade Name (the “Opinions”) issued by the SAIC (the State Administration of Industry and Commerce), the conflict occurred within a province shall be settled as in charge of the provincial administration of industry and commerce, and those involves different provinces, shall be settled by SAIC.

Moreover, regarding the specific solution to the settlement of trademark and trade name conflict, the Opinions stresses the principle of “maintaining fair competition” and “protecting the first right holder”, and the latter principle is more valued in practices. In the meantime, I also notice the restriction set by the Opinions on the administrative settlement: 1) all the revolved trademarks or trade names shall be registered; 2) the application to the administration shall be made within 5 days after the registration of the trademark or trade name, including unsettled application, and yet excluding the malicious squatting. As to the punishments, they may be penalty, order of stop using, trademark cancellation and trade name change. However, the trademark cancellation or trade name change is rarely to be seen in practices.

II. The judicial way

In addition to the administrative method, currently the lawsuit is playing an important role in the conflict settlement. And the relevant litigations are mostly filed for the trademark infringement and unfair competition.

(1) The principle of the conflict settlement

Just like the administrative officers, the judges also emphasize the principle of “protecting first rights”, and yet further hold the principle of “good faith” and “inhibition on confusion”. That is to say the order of right acquisition will not be solely considered for the liability, the malicious intention and willing to free ride on other’s accumulated commercial reputation are also key in the judicial deliberation. Surely, once it could prove the reputation of the first right holder, the malicious intention and the possible confusion would be confirmed.

(2) The detailed standard of the judgment

As provided in Paragraph 1 of Article 1 of Interpretations on Several Issues on the Law Application in Civil Cases by the Supreme People’s Court:

“To use the identical or similar words to the registered trademarks in the identical or similar products in outstanding ways may lead to the public confusion”。

That shows to constitute liability of trademark infringement, it shall consider:

1) The identical and similar words with others trademark;

2) The trademark has been used in the identical or similar products;

3) It is used in the outstanding way;

4) Mistaking among the public.

Referring to the mistaking or confusion, it is also the main factor to be considered in the unfair competition.

According to Paragraph 3 of Article 5 in the Anti Unfair Competition Law:

“using, without authorization, the business name or personal name of the other person on his own goods, leading people to mistake them for the goods of the other person;” could lead to the unfair competition.

In other words, the “mistaking” is not only the common condition to judge the trademark infringement as well as the unfair competition, but also the sole standard in deciding the liability of unfair competition.

(3) Liabilities for trademark infringement and unfair competition

Once the liability of the trademark and unfair competition was established, the infringer has to face the penalty, compensation, trademark cancellation and name change. For the penalty, it usually counts for 3 times of the illegal business revenue, or the amount of no more than RMB 100, 000 yuan when such revenue is impossible to be calculated. And the compensation by law shall be no more than RMB 500, 000 yuan. For the administrative decision on the trademark cancellation, the party concerned may filed a review for it within the statutory period on the dissatisfaction to it. As to the trade name change, the trade name owner losing the lawsuit are generally cooperating the decision, or otherwise it may face the mandatory enforcement by the court.

Lawyer Contacts

You Yunting：86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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