Similarity Based upon Reputation and Bad Faith Supreme Court's Jud gments concerning Click here to view image and Click here to view image.

China’s Supreme Court has showed a positive attitude in this case that the evidence LACOSTE submitted at the stage of retrial may be taken into consideration.

The litigious device trademark Click here to view image. No. 3150675, designating clothing, swimming suits and layettes etc., was filed on April 18, 2002 and registered on October 28, 2003. Afterwards, it was transferred twice and its current owner is FRANCE CROCODILIAN SHIRT GROUP LIMITED, a company registered in Hong Kong.

On October 23, 2007, WAN HUI DA represented LACOSTE to file an application for invalidation before the TRAB, against the litigious trademark, based upon Article 28 (similarity), Article 13.2 (registered well-known trademark) and Article 41 (fraud or other unfair means). On May 10, 2010 the TRAB ruled that the registration of the litigious trademark should be cancelled for clothing, shoes, leather belts etc. but that it should be maintained for "swimming suits and layettes". The TRAB agreed that the litigious trademark Click here to view image. is visually similar to LACOSTE's cited trademark  Click here to view image. but considered that "swimming suits and layettes" are not similar to the designated goods of the cited Trademark.

Both CROCODILIAN SHIRT GROUP LIMITED and LACOSTE were dissatisfied with the TRAB's Decision and the case was brought to the Beijing First Intermediate People's Court for judicial review. The Intermediate Court maintained the TRAB's Decision in the first instance in 2010 and the Beijing Higher People's Court maintained the Intermediate Court's Judgments in the second instance in 2011.

LACOSTE submitted the case to the Supreme People's Court, for a final review and on December 2011, the Supreme Court decided to retry the case.

LACOSTE supplemented five pieces of evidence when applying for retrial: (1) The 10th edition of "Classification of Similar Goods and Services"; and (2) An administrative judgment of Beijing First Intermediate People's Court, both of which proving that "swimming suits and layettes" and "clothing" have been recognized as similar goods.  LACOSTE also submitted (3) an Administrative Penalty Decision issued by Chizhou AIC of Anhui Province; (4) an Administrative Penalty Decision issued by Quanzhou AIC; and (5) various documents showing the actual use of the litigious trademark. The above three evidence proved the bad faith of CROCODILIAN SHIRT GROUP LIMITED who had transformed the trademark in use and made it much more similar to LACOSTE's crocodile device registrations.

During the retrial, LACOSTE supplemented another decision made by the CTMO in 1994 on the opposition to the trademark application “EXING”【(1994) Shang Biao Yi Zi No.368】to prove that LACOSTE’s cited trademark had been well-known since 1994.

On December 8, 2014, the Supreme Court issued its Judgments overturning the Judgments of the two instances and the TRAB's Decision, and the TRAB was ordered to issue a new Decision. The Supreme Court confirmed that the remaining goods "swimming suits and layettes" should be considered as similar to clothing etc. especially considering the great market awareness and influence of LACOSTE's device trademark and the bad faith of CROCODILIAN SHIRT GROUP LIMITED.

Comments

China's trademark classification bible "Classification of Similar Goods and Services" went through an overhaul in 2012. It rectified some inconsistencies, such as "swimming suits and layettes" and "clothing" not being similar. The target consumers, functions and sale channels of those goods are indeed closely connected and at the same time many cases proved that the old dissimilarity caused many infringement problems in the market. Although the SPC did not directly comment on this new classification, it showed a positive attitude that the evidence LACOSTE submitted at the stage of retrial may be taken into consideration and the 2012 classification presumably played an important role in this case.

As to the other supplementary evidence filed in the retrial procedure, it is observed that they were admitted by the SPC as corroborative evidence, which finally contributed to a favorable judgment for LACOSTE.  In particular, it is worth noting that the acceptance of the decision (1994) Shang Biao Yi Zi No.368 has moved the time when LACOSTE’s cited trademark was judicially recognized well-known up to 1994. This will have positive effect on the future LACOSTE cases. In this regard, the brand owners are encouraged to file any decisive new evidence in any stage of the judicial review procedures.