In 2015, two intellectual property cases in China provoked widespread attention.
The first concerned infringement of the ‘Xin Bai Lun’ (‘New Balance’ in Chinese) trademark. In 1994, plaintiff Zhou Lelun applied to register ‘BaiLun’ (trademark no. 865609) to protect “clothing, shoes, hats, socks” in class 25, and obtained the trademark in 1996. In 2004, the plaintiff also applied for ‘Xin Bai Lun’ (trademark no. 4100879) in respect of “clothing, shoes, etc” in class 25, receiving the trademark registration in 2008.
US company NewBalance’s affiliate in China, ie, the defendant in this case, New Balance Trading (China), has sold more than RMB 1 billion ($164,000) worth of Xin Bai Lun sports shoes in China since July 2011. In the trial of first instance, the Intermediate People’s Court of Guangzhou City held that New Balance had used the similar mark in a way that would cause market confusion and disorder, so it had infringed the plaintiff’s trademark rights.
Case two dealt with the refusal to register the trademark ‘Wechat’. In November 2010, TrunkbowAsia Pacific (Shandong) applied for ‘Wechat’ (trademark no. 8840949) in respect of the services “message sending, telecommunication information, communications by telephone, etc” in class 38. On January 21, 2011 (later than the date of application for the ‘Wechat’ mark), internet service provider Tencent launched its Wechat instant messaging service.
In November 2014, users of Tencent’s Wechat service had exceeded 800 million and it has become a very popular mobile phone tool in China.
The Beijing Intellectual Property Court, which ordered that the ‘Wechat’ trademark (no. 8840949) is refused, said its decision was due in part “to maintain the cognition already formed by the huge group of Wechat users and avoid great social costs likely to be incurred by change of such cognition”.
"It is not difficult to conclude that under China’s current trademark system protecting the private interests of trademark owners’ prior applications and registrations is a general principle."
Why was the earlier applied-for and registered trademark protected in the case of Xin Bai Lun, while the prior trademark application was invalidated by the court in the case of Wechat? The similar case facts and different results show different levels of protection for private and public interests by Chinese trademarks.
Public v private interests
The case of Xin Bai Lun demonstrates the general principle of protection for private interests by Chinese trademarks. The ‘principle of prior application’ is implemented for Chinese trademarks. A trademark applied for and registered earlier can withstand the same trademark or similar trademarks used for the same or similar goods later.
For example, in the case of Xin Bai Lun, the scale of the defendant’s use of ‘Xin Bai Lun’ exceeded that of the trademark registrant, ie, the plaintiff. Consumers actually had closely associated ‘Xin Bai Lun’ with the defendant’s sports shoes, and reverse confusion had occurred in the market. However, in consideration of the need to protect the trademark owner’s private interests and follow the principle of prior application, the defendant’s act should still be recognised as infringement.
The case of Wechat demonstrates the principle of exception for protection of public interests by Chinese trademarks. In the case of Wechat, Trunkbow applied for the trademark first and Tencent used the mark later. However, the particularity of this case is that although Tencent used ‘Wechat’ after Trunkbow’s application for the term, the use was on an exceptionally large scale and the nature of it not only related to the individual interests of Tencent or Trunkbow, but also bears on the economic, political and cultural life of hundreds of millions of Chinese consumers. Unlike the ‘Xin Bai Lun’ mark, which involves only private interests, the ‘Wechat’ trademark has gone beyond the scope of private interests and entered the domain of public interests.
In weighing protection of public and private interests, the court chose to protect public interests and refused registration of Trunkbow’s trademark ‘Wechat’.
By comparing the above two cases, it is not difficult to conclude that under China’s current trademark system protecting the private interests of trademark owners’ prior applications and registrations is a general principle, and protecting public interests related to trademarks is an exceptional principle. The precondition of the exceptional principle is that the scale of trademark use is huge and the trademark relates not only to its user’s private interests but also to the public’s common interests. The ‘Wechat’ trademark in this case is an example.