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August 06 2018
Article 10bis of the Paris Convention,(1) together with the Agreement on Trade-Related Aspects of Intellectual Property Rights, forms the cornerstone of China's legislative framework on the protection of commercial signs. This legislative framework comprises:
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. During the four drafts that followed, substantial changes were made concerning important issues such as the theft of trade secrets. However, as regards the principles set out in Article 10bis of the Paris Convention, most of the main concepts and principles of the original 1993 text have been maintained.
This update analyses Article 6(1)(2) of the new law from the perspective of Article 10bis of the Paris Convention and, by way of a comparison with the corresponding provisions of the Trademark Law, examines how the new law will redefine the legal landscape for protecting commercial signs in China.(2)
Article 6(1)(2) addresses the conflict between company names, which may lead to confusion with regard to business entities. The original "Regulations on the Registration and Administration of Company names" (promulgated in 1991, revised in 2012) set out a fundamental principle that business names are governed geographically and that within a certain geographical area, duplicate names are not allowed.
In this sense, a company name does not need to have a certain influence in order to invoke protection. An application for a new company name will be approved if there is no prior name that is either identical or similar to it.
This practice works provided that companies with identical or similar names run their business within their own geographical areas, but what if such geographical boundaries change as a result of business growth? Without a mechanism that allows for the search and registration of company names to be managed at a national level, it is necessary to rely on the Anti-unfair Competition Law to fend off copycats, provided that the company name has acquired a certain influence through use.
During the revision process, it was expected that the new Anti-unfair Competition Law would introduce a sub-paragraph corresponding with Article 58 of the Trademark Law, which covers the use of another party's trademark as a trade name and refers to the Anti-unfair Competition Law. The 2016 draft and the 2017 first and second drafts contained a sub-paragraph addressing the conflict between trademarks and trade names, but this was deleted in the final text.
The absence of any explicit provisions in the new Anti-unfair Competition Law on the conflict between trademarks and trade names, means that it is necessary to rely on Article 6(1)(4).
EU trademark legislation does not take prominence of use as a relevant criterion; as a rule, as long as the sign is used on goods or services (no matter if it is used as a trademark or a company name), the act is prohibited.
The new Anti-unfair Competition Law also covers the abbreviation and trade name of company names, which corresponds with the provisions of Article 6 of the Judicial Interpretation on Unfair Competition and has been reaffirmed by the Supreme People's Court in Tianjin China Youth Travel Service Co, Ltd v Tianjin Guo Qing International Travel Agency (Case 29, Tianjin High Court, 2012 Jin Gao Min San Zhong Zi 3).
Previously, when an operator was ordered to change its name for illegally using the trademark of another party, the effective enforcement of such an order was problematic. However, the new law provides a solution to facilitate the enforcement of such an order and states that if the operator does not change the name within a prescribed time "the enterprise registration authority shall replace such name with a uniform social credit code".
The notion of 'name' under Article 6(1)(2) is not equivalent to 'name right' as provided in the General Provisions of Civil Law. The latter is an inherent right of a person, while the names protected by the Anti-unfair Competition Law are those benefiting from the reputation of an individual through long-term or extensive use that have generated a certain influence.
The criteria of protection are basically the same under the Anti-unfair Competition Law and the Trademark law. In the "Provisions on Several Issues Concerning the Hearing of Administrative Cases Involving the Granting and Affirmation of Trademark Rights" (Judicial Interpretation on Trademark Administrative Litigation, 2017), the Supreme People's Court indicated that the name must have "a certain reputation and has established a stable corresponding relation with the natural person so that the relevant public uses such name to refer to that person".
In the famous Michael Jordan v Qiao Dan Sports Co, Ltd case, a sports goods manufacturer registered the name of both Jordan and his two sons as trademarks. The court found that, although '乔丹' is not the only transliteration of 'Jordan', given that a stable association has been established between the name Jordan and this particular transliteration in respect of basketball sports goods and sports apparel, this registration was scarcely a coincidence and was invalidated.
In general, two people sharing the same name is acceptable unless one benefits from the other's reputation and breaches the principle of good faith, which constitutes unfair competition. In such a case, an amateur writer changed his name to Wang Yuewen (a renowned Chinese writer) and published a book under a title similar to the latter's signature work. The Changsha Intermediate Court found that such an act constituted unfair competition and awarded damages.
For further information on this topic please contact Hui Huang or Paul Ranjard at Wanhuida Peksung by telephone (+86 10 6892 1000) or email (email@example.com or firstname.lastname@example.org). The Wanhuida Peksung website can be accessed at www.wanhuida.com and www.peksung.com.
(1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.
(2) Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.
(3) The following in particular shall be prohibited:
1. all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor;
2. false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor;
3. indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.
(2) This update is part of a series that examine the new Anti-unfair Competition Law in view of Article 10bis of the Paris Convention and the Trademark Law. For previous updates in the series, please see "Relationship between new Anti-unfair Competition Law and Paris Convention: general principles", "Relationship between new Anti-unfair Competition Law and Paris Convention: misleading consumers" and "Relationship between new Anti-unfair Competition Law and Paris Convention: uniqueness".
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