By Lin Jiuchu, Zhang Jiaqi, King and Wood Mallesons

Case review

Our client, a Chinese garment enterprise, owns the registered trademark “DEICAE” and its corresponding Chinese trademark “迪赛(DiSai in Pinyin)”. DIESEL S.P.A, a famous Italian garment enterprise, filed an invalidation application against the Chinese trademark “迪赛” of our client, arguing that “迪赛” is similar to its prior trademark “DIESEL”, and thus the disputed mark “迪赛” shall be invalidated. Both China National Intellectual Property Administration (“CNIPA”) and Beijing IP Court supported DIESEL S.P.A ’s arguments on the following grounds:

  • The cited mark “DIESEL” of DIESEL S.P.A has obtained certain fame before the application date of the disputed mark “迪赛”.
  • A stable corresponding connection between the cited mark “DIESEL” and its Chinese transliteration “迪赛尔(DiSaiEr in Pinyin)” or “迪赛” has been established.
  • Relevant public and some media usually use the Chinese transliteration “迪赛” to refer to the cited mark “DIESEL”.
  • The disputed mark is same as or similar to the Chinese transliteration of the cited mark “DIESEL”. The co-existence of the cited mark and the disputed mark would easily cause confusion among the relevant public. Therefore, the disputed mark “迪赛” and the cited mark “DIESEL” constitute similar marks.

In the second instance of the said case, KWM represented our client and argued the followings:

  • The cited mark “DIESEL” is not similar to “迪赛尔/迪赛” in respect of compositions and visual effect of the marks themselves.
  • There is little evidence showing the use of “DIESEL” and “迪赛尔/迪赛” in combination form before the application date of the disputed mark “迪赛”. Even among the evidence as submitted, there is no single piece showing the initiative use by DIESEL S.P.A. itself but only the passive use of the trademark by consumers and the media.
  • Either consumers or the media choose the Chinese transliteration of “DIESEL” in random way, using not only “迪赛” but also many other options. Therefore, “迪赛” is not the sole corresponding Chinese transliteration of “DIESEL”.
  • The disputed mark “迪赛” is the corresponding Chinese transliteration of our client’s English trademark “DEICAE”. The application and registration of the disputed mark has reasonable ground.
  • The date when our client started to use the disputed mark “迪赛” is much earlier than when the cited mark “DIESEL” was started to be called as “迪赛”.
  • The disputed mark has already gained high fame through our client’s use and promotion. The disputed mark is distinguishable from the cited mark in market. Therefore, the co-existence of the disputed mark and the cited mark will not cause confusion among the relevant public.

Finally, Beijing High Court fully supported our arguments, overturning the judgment of the first instance and the sued decision rendered by the CNIPA.

Our comments 

The said case is of significant reference to apply for and protect the transliteration trademarks for both Chinese and foreign companies. For both foreign and domestic entities who conduct business in China, Chinese trademarks are very important. After all, they face consumers who are native Chinese speakers. As everyone knows, China has a large number of trademark applications each year. Therefore, good Chinese trademarks have become scarce resources.

Some of the famous foreign trademarks which have been well known by Chinese consumers before entering the Chinese market, are either transliterated randomly by Chinese consumers and the media themselves, or called in accordance with Chinese transliteration trademarks used in Hong Kong or Taiwan. It would be good for foreign entities to choose those Chinese transliteration trademarks which have been widely used as the corresponding Chinese trademarks of their famous English marks. Using such trademarks can not only succeed the gained reputation but also avoid the market loss suffered by the creation of a new Chinese trademark and the cost for promoting a new brand.

However, these Chinese transliteration trademarks used by the consumers and the media might either have been previously registered (such as the situation in the above said case), or have been maliciously squatted (for instance, “Kiehl’s” and “契尔氏 (QiErShi in Pinyin)”, “New Balance” and “新百伦 (XinBaiLun in Pinyin)” etc. ). As such, on one hand, it is advisable to lay out the strategy for Chinese trademarks applications as early as possible including applying for these Chinese transliteration trademarks which are corresponding to their foreign trademarks in China; on the other hand, it is also important for the foreign entities to have the initiative intention of using the Chinese transliteration trademark as the corresponding foreign mark during the actual business and promotion since some precedents hold that the passive use by the consumers and the media rather than the applicant itself is unable to create the protectable rights by the law (such as “Sony Ericsson” case). In addition, both foreign marks ​​and their corresponding Chinese trademarks should be put into actual use in order to establish a corresponding connection between the two trademarks, which would be good for the protection of trademarks.