By Dang Zhe and He Shijia King & Wood Mallesons’ IP group.
At the end of 2016, KWM’s IP Litigation Group obtained favorable judgements for its clients in “Ariston Case” and “John Deere Case”, two typical disputes concerning infringement of well-known trademarks by ordinary registered trademarks. The two cases are respectively included in the “Top 10 Cases Concerning IPR Judicial Protection Heard by Courts in Jiangsu in 2016” and the “Exemplary Cases in Terms of ‘Strengthening the Judicial Protection on IPR’” at the occasion of the 2nd anniversary of the Beijing Intellectual Property Court. Based on these two cases, this article introduces and explains the evolution and development of judicial interpretations and practice relating to the protection of well-known trademarks, and therefrom draws conclusions and trends about certain adjudication rules in China.
The court may directly accept and decide the dispute concerning infringement of a well-known trademark by a registered trademark
With respect to conflicts between two registered trademarks, the second paragraph of Article 1 of theProvisions of the Supreme People’s Court on Issues Concerning the Trial of Cases of Civil Disputes over Conflicts Relating to Registered Trademark, Enterprise Name and Prior Right (2008) (the “Interpretation on Conflict of Rights”) stipulated that, if a lawsuit is filed on the ground that a registered trademark used by another party on designated goods is identical or similar to the plaintiff’s prior registered trademark, the people’s court shall notify the plaintiff to apply with competent administrative authority for settling the issue. Subsequently, for strengthening well-known trademark protection, Article 11 of the Interpretation of the Supreme People’s Court of Several Issues Concerning the Application of the Law to the Trial of Civil Dispute Cases Involving Well-Known Trademarks (2009) (the “Interpretation on Well-known Trademark”) referred to the conflict between a later registered trademark and a well-known trademark, specifying that, “where a registered trademark used by the defendant is a reproduction, imitation or translation of the plaintiff’s well-known trademark and constitutes an infringement of the plaintiff’s trademark right under Article 13 of the Trademark Law, the people’s court shall, at the request of the plaintiff, order to prohibit the defendant from using such trademark according to relevant laws.” This provision is based on Article 13 of the Trademark Law, which says that “no application for its registration may be granted” and “its use shall be prohibited” in case a later trademark infringes the right of a well-known trademark. In view of such provisions, entitling well-known trademark owners to prohibit the use of a later registered trademark is in conformity with the legislative intention of the Trademark Law, i.e. providing greater protection to well-known trademarks.
However, with the promulgation of the Interpretation on Well-known Trademark, some courts were not clear about the relationship between the second paragraph of Article 1 of the Interpretation on Conflict of Rights and Article 11 of the Interpretation on Well-known Trademark in terms of application. We may observe the development of the courts’ position on such issue all through the first instance, second instance and retrial proceedings of Ariston Case. In this case, the plaintiff owns the highly popular registered trademark “” for “water heaters” and other goods, while the defendant registered trademarks “阿里斯顿” and “ALSDON” for using them on dissimilar goods such as “metal ceilings”. In the first instance judgement issued in April of 2013, the Nanjing Intermediate People’s Court (the “Nanjing Intermediate Court”) held that according to the second paragraph of Article 1 of the Interpretation on Conflict of Rights, the plaintiff shall apply with competent administrative authority for settling the issue. In the second instance, the Jiangsu Higher People’s Court (the “Jiangsu Higher Court”) ordered a retrial of the case. Then the Nanjing Intermediate Court made another first instance judgement in June of 2015 and upheld the plaintiff’s claim by recognizing the plaintiff’s trademark as well-known and determining that the use of the defendant’s registered trademarks constituted infringement. In December of 2016, the Jiangsu Higher Court upheld the first instance judgement and Ariston eventually won the case.
The Third Paragraph of Article 13 of the Trademark Law Also Apply to Cases Involving Identical or Similar Goods
In John Deere Case, the court also applied Article 13 of the Trademark Law and Article 11 of the Interpretation on Well-known Trademark to the conflict between the defendant’s later registered trademarks and the plaintiff’s well-known trademarks. Compared to the Ariston Case, the John Deere Case revealed another adjudication rule for the judicial protection of well-known trademarks, which is that the third paragraph of Article 13 of the Trademark Law (the “Article 13C”) may also apply to conflicts of rights between registered trademarks on identical or similar goods. In this case, the court determined that agricultural machinery, tractors and other goods for which the plaintiff’s trademarks were registered, and industrial oil for which the defendant’s trademarks were registered were similar goods. Despite this, the court recognized the plaintiff’s three registered trademarks including “JOHN DEERE” and “约翰.迪尔” as well-known trademarks and held that the use of the registered trademark “佳联迪尔” by the defendant constituted infringement by applying the Article 13C.
Is the Article 13C applicable to the disputes between trademarks on identical or similar goods? There was disagreement in opinion and judicial practice. The opposing view was based on two major grounds: (i) the Article 13C only refers expressly to “different and dissimilar goods” and cannot be extended to “identical or similar goods”; and (ii) in case of identical or similar goods, a right holder may make claim under Article 30 of the Trademark Law for protection instead of seeking recognition of well-known status. In fact, this issue is not new and has been explored in domestic and foreign judicial practices. Certain conclusions have been made:
1. Legislative and judicial practice in the EU
The EU legislation provoked discussion alike. Article 5.2 of the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (the “EU Trademarks Directive”) and the Article 8.5 and 9.1(c) of the Council Regulation (EC) No. 40/94 of 20 December 1993 on the Community trade mark (the “Community Trademark Regulation”) both granted protection to trademark which “has a reputation” against trademarks applied for or used for dissimilar goods without mentioning “identical or similar goods”, thus left different opinions in practice. In 2003, the European Court of Justice clarified such issue in its decision on Davidoff Case, stating that the foresaid articles cannot be given an interpretation which would lead to trademarks with a reputation having less protection where a sign is used for identical or similar goods or services than where a sign is used for non-similar goods or services. Therefore, the aforesaid articles also apply to the case involving identical or similar goods.
2. Legislative and judicial practice in the PRC
(1) The courts’ practice in trademark administrative cases
From 2008 to 2014, in the series cases of Texwood trademark administrative disputes , Angel Yeast trademark administrative dispute and Daohuaxiang trademark administrative dispute, the Beijing Higher People’s Court (the “Beijing Higher Court”) repeatedly pointed out that the second paragraph of Article 13 of the Trademark Law (2011) (the “Article 13B (2011)”) “should certainly apply to” (or “may also apply to” in some judgements) cases involving trademarks on identical or similar goods. And the Supreme People’s Court (the “Supreme Court”) confirmed such position in another Texwood’s trademark administrative dispute in 2011.
(2) The judges’ view
In 2014, Mr. Zhou Yunchuan, the then judge of the IP tribunal of the Supreme Court, and Mr. Chen Jinchuan, the then chief judge of the IP tribunal of the Beijing Higher Court made the same point in their books that: the essence of well-known trademark protection lies in the stronger protection to well-known trademarks. Based on the rule of “argumentum a maiore ad minus”, since well-known trademarks may be recognized and protected against ordinary trademarks used for dissimilar goods according to Article 13B (2011), in the cases of identical and similar goods, well-known trademarks may certainly receive better protection.
(3) The Supreme Court’s clear position in judicial practice and interpretations
The Supreme Court adopted the aforesaid opinion in P&G’s trademark administrative disputes  in 2016 by pointing out that, “owners of ordinary registered trademarks have the exclusive right to prohibit others from using identical or similar trademarks on identical or similar goods. In addition to such right, owners of well-known trademarks also have the right to exclude others from using identical or similar trademarks for different and dissimilar goods.” Based on this, the Supreme Court clearly stated that, “where a trademark of identical or similar goods is a reproduction, imitation or translation of other’s well-known trademark previously registered in China, the Article 13B (2011) may also apply.”
Subsequently, Article 14 of the Rules on Handling Several Issues About Administrative Cases Regarding Granting and Validation of Trademarks of the Supreme People’s Court issued in 2017 provides that, “where a party claims that the disputed trademark constitutes a reproduction, imitation or translation of its registered well-known trademark and that such trademark shall not be registered or shall be ruled as invalid, and the Trademark Review and Adjudication Board (the ‘TRAB’) rules to support the claim in accordance with Article 30 of the Trademark Law… if the disputed trademark has been registered for five years or more, the people’s court shall handle the case in accordance with the third paragraph of Article 13 of the Trademark Law.” Despite that specific wording of “identical or similar goods”in its 2014 Draft for Comments was not retained in the released final version, the overall context of this provision should be considered in conformity with Article 30 of the Trademark Law, i.e. involving identical or similar goods. There is no doubt that the aforesaid “shall handle the case in accordance with the third paragraph 3 of Article 13 of the Trademark Law” in case the disputed trademark has been registered for five years or more refers to the circumstances that designated goods of the disputed trademark and the cited trademark are identical or similar. That is to say, the Supreme Court has in fact confirmed in its judicial interpretations that the Article 13C applies to circumstances of identical or similar goods.
(4) NPC Legislative Affairs Commission’s consistent interpretation
The NPC Legislative Affairs Commission has held a consistent view regarding this issue. The 2001 and 2013 versions of its interpretation of the Trademark Law provide the same for the Article 13C (the Article 13B (2011)), that “a well-known trademark registered in the PRC should be protected against registration or use by any other party for goods or services that are identical or similar to those for which the well-known trademark is registered, and for different or dissimilar goods or services in the fields where the well-known trademark enjoys popularity, consistent with the principle of providing stronger protection to registered trademarks under the Trademark Law of the PRC.” That is to say, ever since 2001, the year in which the well-known trademark protection mechanism was introduced into the Trademark Law, the Legislative Affairs Commission has deemed without doubt that the protection to registered well-known trademarks under Article 13 has the implication of “prohibiting the registration and use by any other person for identical or similar goods”.
As may be observed from the aforementioned development and evolution in judicial interpretation and practice, basic consensus has been reached in the PRC legal practice, that is, based on the legislative intention of providing stronger protection to well-known trademarks, and the interpretation technique of “argumentum a maiore ad minus”, Article 13C may apply to cases involving identical or similar goods.
“Necessary recognition” principle is not only limited to “cross-class protection”
Given the alienation trend of well-known trademark protection, Article 2 of the Interpretation on Well-known Trademark (2009) established the “necessary recognition” principle by stipulating that “the people’s court shall, if it holds it indeed necessary, determine whether the trademark in suit is well-known or not…” The interpretation does not specify factors to be considered when applying such principle, and it’s generally agreed that “indeed necessary” refers to the circumstance where “cross-class protection” is required for safeguarding claimed rights in relation to registered trademarks. However, it’s easy to learn from the above discussion that, “cross-class protection” is not the only circumstance in which well-known trademark recognition is needed. According to explicit provisions of laws and judicial interpretations, besides “cross-class protection”, such recognition is at least necessary for (i) claiming against registered trademarks in trademark infringement cases (i.e. the situation stipulated in Article 11 of the Interpretation on Well-known Trademark); and (ii) not being bound by five-year time limit when claiming for trademark invalidation if the disputed trademark has been registered for five years or more (i.e. the situation stipulated in Article 45 of the Trademark Law). In addition to such circumstances, the “necessary recognition” principle may also be construed in the following way, as concluded from laws, judicial interpretations and practice.
1. Anti-trademark dilution—“misleading the public” vs. “causing confusion”
The protection of unregistered well-known trademarks granted by second paragraph of Article 13 of the Trademark Law is equal to the protection of registered trademarks, and therefore the second paragraph of Article 13 stipulates that the damages of the infringement to unregistered well-known trademarks shall be “being liable to cause confusion”; while in the third paragraph of Article 13, “misleading the public and being likely to impair the interests of the registrant of the well-known trademark” is considered as the damages caused by infringement to registered well-known trademarks. The first and second paragraphs of Article 9 of the Interpretation on Well-known Trademark explicitly distinguish such two infringement results. It is to say, the damage caused by the infringement upon registered well-known trademarks is different from the damages of the infringement upon ordinary registered trademarks and unregistered well-known trademarks (i.e. “causing confusion”).
According to the second paragraph of Article 9 of the Interpretation on Well-known Trademark, “misleading the public” refers to the fact of “being sufficient to cause the relevant sector of the public to believe that a trademark in suit and a well-known trademark are associated to a considerable extent”, obviously a broader interpretation compared to “causing confusion” .Meanwhile, it is specified in this paragraph that forms of “being likely to impair the interests of the registrant of the well-known trademark” include (1) “weakening the distinctive character of the well-known trademark” (i.e. “blurring”), (2) “tarnishing the goodwill of the well-known trademark in the market” (i.e. “tarnishing”), and (3) “taking advantage of the goodwill of the well-known trademark in the market”, collectively called “trademark dilution” in theoretical context. Compared to “causing confusion”, essential factor for determining infringement to ordinary trademarks, the threshold for infringement to well-known trademarks is relevantly lower. Therefore, well-known trademarks gain broader protection than ordinary registered trademarks. In practice, if an infringement act is likely to “mislead the public” and results in blurring, tarnishing or taking advantage of the goodwill of an earlier trademark in the market, but has not yet reach the degree of “causing confusion”, the well-known trademark recognition will be “necessary” to protect the infringed trademark.
2. Not necessarily similar—“reproduction, imitation, or translation” vs. “similarity test”
According to Article 13 of the Trademark Law, protection will be granted where a later registered trademark in dispute constitutes a “reproduction, imitation, or translation” of another person’s well-known trademark. The said “reproduction, imitation, or translation” should not be construed the same as the similarity test for registered trademarks. In Tony Boss trademark opposition case, the Beijing Higher Court pointed out that, there is difference in degree between the determination of “reproduction, imitation, or translation” relating to well-known trademarks and the similarity test for ordinary registered trademarks. In Volkswagen’s trademark invalidation case , one of the exemplary cases at the occasion of the 2nd anniversary of the Beijing Intellectual Property Court, the court also held that “the standard for determining a reproduction, imitation, or translation of another person’s well-known trademark is not the same as that for determining a similarity between ordinary trademarks. Given the high popularity and distinctive character of well-known trademarks, they should receive stronger protection compared to ordinary trademarks. In this case, the disputed trademark is composed of Chinese characters and figures. Despite that the Chinese characters should be considered as the most distinctive part of the trademark based on the reading habit of the relevant Chinese public, the figures of the disputed trademark is basically identical with Volkswagen’s well-known trademark. Therefore, the disputed trademark constitutes imitation of a well-known trademark.” This shows that, sometimes in practice, it’s necessary to apply the standard of “reproduction, imitation, or translation” for protecting well-known trademarks if the “similarity test” for ordinary trademarks fails.
3. Sufficient indemnification
In Exxon Mobil’s trademark infringement case , another exemplary case of the Beijing Intellectual Property Court, it was held that “based on the principle of necessary recognition of well-known trademarks, generally, if an ordinary registered trademark may receive protection equivalent to that granted to a well-known trademark in terms of identical or similar goods, the recognition of well-known trademark will not be considered necessary. When determining equivalent protection, at least the cease of infringement and the indemnification of damages should be taken into account.” According to Article 64 of the Trademark Law, the owner of a registered trademark may not be entitled to indemnification if the trademark is not actually used, even if an infringement claim has been upheld by the court. Therefore, in case a trademark owner succeeds in an infringement claim based on its ordinary registered trademarks against trademarks used for identical or similar goods, but could not claim for indemnification because of the lack of actual use of its own trademarks, such owner may need to seek judicial remedies by claiming protection of a well-known trademark registered for dissimilar goods.
Hence, at least the following factors are to be considered when determining whether well-known trademark recognition is “indeed necessary”:
- cross-class protection；
- claiming against registered trademarks;
- not subject to the time limit for declaration of invalidity (if the disputed trademark has been registered for five years or more);
- anti-“trademark dilution”;
- bypassing the similarity test;
- sufficient indemnification.
Choices of trademark owners and the court’s reaction
In practice, besides core trademarks for main products, trademark owners often possess some other “defensive trademarks” in various classes of goods. Core trademarks usually gain high popularity through abundant use, while defensive trademarks are normally not actually used. In case of infringement, if the infringed party owns a trademark registered for the identical or similar goods in dispute, will such party be entitled to claim infringement of another well-known trademark on dissimilar goods? And what if claiming for infringement of both ordinary and well-known trademarks?
In Texwood’s trademark opposition dispute, case no.13 of the Supreme Court’s representative IP cases report in 2009, the plaintiff claimed rights on both trademarks, one ordinary registered trademark for similar goods, and another well-known trademark for dissimilar goods. The Supreme Court held that review of trademarks shall be conducted with respect to both the ordinary and the well-known trademarks, and pointed out that “it’s not reasonable if a well-known trademark owner possessing other trademarks registered for goods that are identical or similar with those in dispute obtains less protection than in the case of only having a well-known trademark for dissimilar goods”. With the same position, in the aforesaid Exxon Mobil’s trademark infringement case, the court conducted review on both ordinary trademark registered for similar goods and well-known trademark registered for dissimilar goods based on the claim of the trademark owner, and granted the well-known trademark recognition according to the principle of necessary recognition. Meanwhile, Judge Zhou Yunchuan once indicated that, “trademark owners may dispose their rights and make choice, the TRAB and the court shall respect their choice. The TRAB and the court may not provocatively find out trademarks registered for similar goods that are not claimed by the owner nor refuse to grant protection to trademarks registered for dissimilar goods due to the existence of trademarks for similar goods.” 
It is learned from these judicial interpretations and judges’ views that, in case a right holder owns a trademark registered for the goods that are identical or similar with that of the infringing trademark (or disputed trademark) and another well-known trademark for dissimilar goods, such right holder may choose to make claim based on either or both trademarks. If the right holder chooses to make claim based on the right of the well-known trademark registered for dissimilar goods, the court may not provocatively review the other trademark unmentioned by the right holder, nor reject the right holder’s claim due to the existence of the other trademark; and if the right holder makes claim based on both of the trademarks, the court shall separately review each trademark and make decision based on the principle of necessary recognition.
In China, the judicial protection of well-known trademarks has undergone a change from “alienation” to “strict control”, and is now approaching the real legislative intention. In such a process, it’s inevitable that some inappropriate adjustments appeared from time to time. For example, at a time, the well-known trademark recognition was rarely applied, and the principle of “necessary recognition” was interpreted in an extremely strict way in practice, which makes the judicial protection mechanism of well-known trademark did not work in the right way. However, as Judge Chen Jinchuan said, that “the well-known trademark mechanism was designed for enlarging the protection against improper use and illegal registration which challenge the legal system. The mechanism has its value and would play an important role in the long term. Giving up such a mechanism just for fear of alienation is not a wise choice.”  We are pleased to see that, in recent years, courts in Beijing and across the country are exploring issues relating to the judicial protection of well-known trademarks in a practical way along with the increasing numbers of this kind of cases, and the Supreme Court is paying close attention to such issues and summing up experience. The rules and trends discussed in this article show the efforts made by judicial authorities to make the well-known trademark mechanism plays its due role. There is reason to believe that, with the continuing development of judicial interpretation and practice, Chinese judicial authorities will understand and implement such mechanism in a more comprehensive and accurate way, and provide proper and sufficient protection to trademark owners.
Su Min Zhi Zhong Zi No. 00211 (2015), M&B Marchi e Brevetti S.r.l and Ariston Thermo China Co. Ltd v. Jiaxing Alisidun Electric Appliance Co. Ltd and Jiang Aijun, for trademark infringement and unfair competition.
Jing 73 Min Chu No.93 (2016), Deere & Company and John Deere (China) Investment Co., Ltd. v. John Deere (Beijing) Agricultural Machinery Co., Ltd. and other two defendants, for trademark infringement and unfair competition.
Third paragraph of Article 13 of the Trademark Law (i.e. second paragraph of Article 13 of the 2001 Trademark Law): “Where the trademark of a different or dissimilar kind of goods is a reproduction, imitation, or translation of another person’s well-known trademark previously registered in China and it misleads the public so that the interests of the owner of the registered well-known trademark are likely to be impaired, no application for its registration may be granted and its use shall be prohibited.”
C-292/00 – Davidoff & Cie SA and Zino Davidoff SA v Gofkid Ltd.
Gao Xing Zhong Zi No. 266, 269-275 (2008).
Gao Xing Zhong Zi No. 271 (2011).
Gao Xing Zhong Zi No. 1705 (2014).
Zhi Xing Zi No.15 (2011).
See Page 203, Zhou Yunchuan: Rules and cases: Litigations involving the authorization and determination of trademark rights, Law Press·China, 2014 (first edition); Page 310, Chen Jinchuan: Judicial Review on the Grant and Validation of Trademarks, China Legal Publishing House, 2014 (first edition).
Zui Gao Fa Xing Zai No. 12, 13 (2016).
See Article 9 of the Rules on Handling Several Issues About Administrative Cases Regarding Granting and Validation of Trademarks of the Supreme People’s Court (2014 Draft for Comments).
Compared to the 2001 version, the 2013 version of the Trademark Law Interpretation only added “in the fields where the well-known trademark enjoys popularity”.
However, the damages caused by the infringement of a well-known trademark shall include “causing confusion”. Since the scope of “misleading the public” is broader than “causing confusion”, acts that “cause confusion” will also constitute “misleading the public”. In some cases, the courts held that the results of “causing confusion” and “misleading the public” may occur at the same time, e.g. Jing Zhi Min Chu Zi No. 143 (2014), Exxon Mobil’s trademark infringement case.
Gao Xing Zhong Zi No. 390 (2010).
Jing Zhi Xing Chu Zi No. 5098 (2015).
Jing Zhi Min Chu Zi No. 143 (2014).
Xing Ti Zi No. 3 (2009).
See Page 204, Zhou Yunchuan: Rules and cases: Litigations involving the authorization and determination of trademark rights, Law Press·China, 2014 (first edition).
See Page 290, Chen Jinchuan: Judicial Review on the Grant and Validation of Trademarks, China Legal Publishing House, 2014 (first edition).