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18 March 2019
In a recently published Gazette case, the Supreme People's Court (SPC) reaffirmed that the reputation that a prior mark has built up may be extended to a later mark of the same applicant. However, the court categorically denied that a trademark registration can be extended to other marks through any means other than a renewal.(1)
Spider King Group Co, Ltd (China Spider King) is a major Chinese footwear manufacturer, which has been marketing Spider King shoes since 1996. China Spider King is the owner of three registered trademarks in China (Figure 1).
However, in 1998 – before China Spider King registered its first spider device (Cited Mark 2 in the above table) – the US company USA Spider King Group Limited registered another spider device in China (Figure 2) in Class 25 for, among other things, baby clothes, shoes, swimsuits, neckties, scarves and headgear.
On 15 October 2004 USA Spider King Group Limited applied to register in Class 25 the device element of its prior mark, minus the Chinese characters 中吉 and the pinyin equivalent 'Zhongi' (Figure 3).
The application, which was later assigned to another US company, Spider Group Limited (USA Spider), was preliminarily approved on 6 May 2008.
On 28 November 2008 China Spider King filed an opposition against the applied-for trademark, citing its three prior registrations.
The China Trademark Office (CTMO) dismissed the opposition and approved the registration of the opposed trademark.
On 30 January 2011 China Spider King appealed to the Trademark Review and Adjudication Board (TRAB).
USA Spider argued that:
On 10 September 2012 the TRAB upheld the CTMO's decision, finding that:
Further, the TRAB found that the cited marks had acquired neither well-known status nor a level of influence sufficient to allow the opposition to succeed.
China Spider King appealed to the Beijing Number 1 Intermediate Court. On 30 December 2015 the court overruled the TRAB decision based on the similarities between the opposed trademark and Cited Marks 2 and 3.
The TRAB and USA Spider appealed to the Beijing High Court, which dismissed the appeal on 28 December 2016. The court found that:
Therefore, the coexistence of this mark with Cited Marks 2 and 3 did not justify the registrability of the opposed trademark.
USA Spider filed a retrial application with the SPC, arguing that the opposed trademark was an extension of its earlier registration.
On 22 December 2017 the SPC dismissed the retrial application, echoing the finding of the first-instance court and the court of appeal that the opposed trademark was similar to Cited Marks 2 and 3 in respect of identical or similar goods.
USA Spider's argument regarding the extension of a trademark registration prompted a clarification from the SPC on the difference between the extension of goodwill and the extension of a trademark registration.
As regards the extension of goodwill, the SPC affirmed that:
The goodwill built up by a market player in the course of business operation, may be, in a certain manner, shifted among or extended to a variety of carriers such as the trade name, trademark, packaging and decoration of goods of such market player, or any other signs that may serve as the source identifier of its goods or services. (Emphasis added.)
However, the SPC categorically denied the extension of a trademark registration (other than through trademark renewal), stating as follows:
Nevertheless,… where a new trademark that is associated with a prior registered trademark needs to be registered… (and it is necessary) to file a new application with the trademark administrative department, which shall review such application,… no matter whether the prior registered trademark has built up a certain reputation, or how the goods designated by the new trademark relate with that of the prior trademark, or what the relationship between the two marks is. The registrability of the Opposed Trademark shall be reassessed by the trademark administrative department, rather than being justified by its association with a prior registration. Other than trademark renewal, Article 38 of the Trademark Law provides no alternative form of trademark extension. (Emphasis added.)
Following the SPC's decision, the widely invoked practice of extending a trademark registration has become obsolete. The SPC is believed to be taking a tough stance against the practice – through which applicants attempt to exploit a prior registration in order to boost their chances of registering a later similar trademark – as it complicates the trademark prosecution procedure.
Still, the SPC acknowledged that the goodwill that a prior registration has built up may be extended, but this is not automatic. Given that USA Spider raised the argument of extending only a trademark registration in the retrial procedure, the SPC was not obliged to assess whether an extension of reputation was a viable argument in this case. The court of appeal ascertained that this case did not fit the following parameters, as set out by the SPC in its earlier decision in Bonneterie Cevensole SARL v TRAB & Foshan Mingshi Industrial Co, Ltd (2012 Xing Ti Zi 28) on the extension of reputation:
For further information on this topic please contact Jack Su or Aileen Wu at Wanhuida Peksung by telephone (+86 10 6892 1000) or email (firstname.lastname@example.org or email@example.com). The Wanhuida Peksung website can be accessed at www.wanhuida.com.
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