Abstract: Approval from a reference trademark holder in supporting the registration of a subsequently registered similar trademark is one of the key elements taken into consideration by administrative organs and the People’s Court in deciding whether to grant trademark rights to the latter, based primarily on Article 28 of the Trademark Law.
(By Luo Yanjie) China’s Trademark Law adopts the “first to file” principle, and in general, when a later applied-for trademark appears to be substantially similar to a previously registered trademark, it will not be granted exclusive rights in the use of the mark. In the case introduced in this post, the latter applicant succeeded in its trademark application due to approval by a previously registered holder of a similar trademark. The details of the case are as follows:
Deckers Outdoor Corporation (“Company D”) filed for the trademark “UGG,” numbered 6379162 (“applied trademark”) in November 2007 with the Trademark Office of the State Administration of Industry and Commerce (“Office”), covering Class 35 imports and exports, commercial information services, etc. In the same class, the internationally registered trademark “UGG” numbered “G951748” (“reference trademark”) was filed by UNICREDIT S.P.A. (“Company U”), who owned priority rights in the mark since September 2007, slightly earlier than the applied trademark.
In January 2010, the Office refused the application of the applied trademark, its main reason being that the applied mark appeared substantially similar to the reference trademark, which had also been applied for in a similar class of goods. Company D then presented written approval from the rights holder of the reference mark to the Trademark Review and Adjudication Board (“Board”), showing that the reference trademark holder agreed with the application of the applied trademark. Regardless, the Board upheld its refusal to approve the application of the applied mark. Dissatisfied with the Board’s decision, Company D filed an administrative lawsuit to hear its case; the court in the first instance, however, upheld the Board’s decision. Company D then appealed the first instance court’s decision and brought the issue to a higher court.
According to the opinions given by the court in the second instance, the Beijing High People’s Court, written approval of Company D’s application for the applied trademark was evidence of Company U’s intent to dispose of its mark. Furthermore, the High People’s Court held that when no sufficient evidence existed to prove damage to the relevant consumer, a willingness on behalf of the reference mark holder to approve of a similar trademark should be respected. Based on these findings, the court in the second instance reversed the decision handed down by the court in the first instance.
1. Written approval is one of the key elements in determining the similarity of two marks .
As provided for in Article 28 of the Trademark Law, a subsequently applied-for trademark should have its application refused if the mark is substantially similar to a previously registered or applied-for trademark. This case is rather unique, because the reference trademark holder presented written approval of the applied mark’s registration. For this reason, in the second instance, the court held that in determining the similarity between two marks, a court should take into consideration written approval for registration of the similar mark by another holder of a similar prior registered trademark for the purposes of determining confusion between the marks. Based on these findings, the court denied that there would be similarity between the marks for the purpose of this analysis. The court’s opinion has provided an idea to prospective applicants; to be specific, when a trademark’s application has been refused by the Board, due to similarity to a previously registered mark or other reasons associated with refusal of trademark applications, it could pursue the holder of the previously registered mark in order to dispel the notion that the subsequently applied for mark was done so with ill intent. With such approval and agreement, a later applicant may very well succeed in registering a mark substantially similar to an already registered or applied for mark.
2. Would approval from a reference trademark holder necessarily lead to the acquisition of the later applied trademark?
Although the applicant in this case obtained rights in its mark primarily due to written approval from the previous applicant, it should be noted the reference trademark holder’s agreement did not singly allow the subsequently registrant to register its mark. Despite the trademark right being a kind of private right, because its function is primarily to assist consumers in their understanding regarding the origin of the product, this is a private right steeped with consideration for the interests of the public. If the granting of the applied mark in this case was simply a matter of referencing the agreement of reference mark holder, there would be no consideration as to the inevitable consumer confusion caused by such an act, notwithstanding serious damage to the interests of the consumer. In analyzing the support of the court in the second instance in this case, despite it support of the later applicant’s claims, it still accepted the written approval provided by the reference mark holder as only one element to be considered in its final determination. It was by no means the only element considered. Taking this into account, in cases where two trademarks are the same or substantially similar to each other, or where they are unlikely to be easily distinguished by the consumer, even written approval of the kind discussed in this case would be moot, and it would be nearly impossible for a court to grant trademark rights to a subsequent registrant under standard trademark theory.