Jiang Nan Qin Huimin January 23 2023 Beijing High Court elaborates its position on continuation of trademark registration in Mona Lisa feud Wanhuida Intellectual Property | Intellectual Property - China Jiang Nan, Qin Huimin Intellectual Property IntroductionFactsTRABFirst-instance courtBeijing High CourtRetrial courtCommentIntroductionOn 14 June 2022, the Beijing High Court rendered its final decision in a trademark dispute administrative retrial proceeding surrounding the registration of a disputed mark, featuring a stylised letter "M" and the text "MONALISA" in class 11 (Figure 1).Figure 1: disputed markThe retrial court revoked the decisions of the trial court and the court of appeal, upholding the Trademark Review and Adjudication Board's (TRAB's) decision to partially revoke the registration of the disputed mark. The retrial decision puts an end to a decade-long trademark dispute that went through the TRAB, two court proceedings, a rare procuratorial protest by the Supreme People's Procuratorate (SPP) and a retrial proceeding, exhausting almost every possible remedy available in the toolbox.FactsThe retrial proceeding stems from a trademark dispute procedure instituted on 30 March 2012 by Guangzhou Monalisa Building Supplies Ltd (Monalisa BS) and Guangzhou Monalisa Bath Ware Ltd (Monalisa BW) before the TRAB, challenging the registration of the disputed mark owned by Monalisa Group Ltd (Monalisa). Citing a prior trademark owned by Monalisa BS, registered in class 11, which featured the words "MonaLisa" in English and Chinese (Figure 2), Monalisa BS and Monalisa BW jointly alleged that the disputed mark and the cited mark were similar trademarks registered on similar goods, which violated article 28 of the Trademark Law 2001.Figure 2: cited markTRABOn 25 November 2013, the TRAB sided with the petitioners and revoked the registration of the disputed mark on "cooking utensils, pressure cooker (electric pressure cooker), bathroom (flush toilet), toilet" (emphasis added). The TRAB sustained the registration of the mark on the rest of the goods.First-instance courtMonalisa initiated an administrative litigation before the Beijing No. 1 Intermediate Court, seeking to reverse the revocation decision in respect of "bathroom (flush toilet), toilet".As well as arguing that the disputed mark and the cited mark were not similar, Monalisa employed a new defence strategy in the administrative suit. It introduced a prior trademark that featured an identical stylised letter "M" and the text "MONALISA", registered in class 19 (Figure 3), and provided evidence on the well-known trademark (WKTM) status of that trademark for "ceramic tiles".Figure 3: prior registered markMonalisa contended that the prior mark's reputation extended to the disputed mark so as not to cause confusion with the cited mark.The particulars of Monalisa's disputed mark and prior registered trademark, as well as the cited mark of Monalisa BS, are as follows. Disputed mark No. 4356344 (Figure 1)Cited mark No. 1558842 (Figure 2)Prior registered mark No. 1476867 (Figure 3)RegistrantMonalisaMonalisa BSMonalisaApplication date10 November 200428 December 199912 July 1999Registration date14 July 200721 April 200121 November 2000Class111119Designated goods"Light, cooking utensils, pressure cooker (electric pressure cooker), bathroom (flush toilet), toilet, fan (air conditioning), faucet, water purifying apparatus and machine, heater" (emphasis added)."Steam bath facility, sauna installation, bath fittings, portable hammam, facial sauna (steam bath), steam generator, shower installation, gas water heater, electric water heater, shower stall" (emphasis added)."Non-metallic floor tiles, ceramic tiles, non-metallic wall tiles for building, mosaics for building" (emphasis added). In February 2015, the first-instance court ruled in favour of Monalisa. The rationale behind the decision was as follows:The prior registered mark was a WKTM, which had been endorsed by both the administrative agency and the courts.The prior registered mark was identical to the disputed mark, and their designated goods – "tiles" and "bathroom (flush toilet), toilet" – were similar due to their strong association in function and usage and shared sales channels and consumer groups.As a result, the reputation of the prior mark extended to the disputed mark. Further, the holistic visual difference between the disputed mark and the cited mark made them distinguishable. The court therefore concluded that the cited mark would not hinder the registration of the disputed mark for the goods "bathroom (flush toilet), toilet".Beijing High CourtMonalisa BS, Monalisa BW and the TRAB appealed the first-instance court's decision before the Beijing High Court, which dismissed the appeal in June 2016.The Beijing High Court found that the designated goods of the disputed mark ("bathroom (flush toilet), toilet") were not similar to the designated goods of the cited mark ("bath fittings"). The Court also echoed the findings of the first-instance court on the dissimilarity between the disputed mark and cited mark.Most importantly, the Court found Monalisa's new defence tenable. The Court held that with respect to trademarks registered by the same registrant in succession, the later registered mark is not necessarily the extension of a prior mark. However, where a prior registered trademark has acquired a certain reputation through use, the reputation of the prior mark may be extended to the later trademark. This is because the relevant public not only associates the same registrant's later registered identical or similar marks in terms of identical or similar goods with such prior registration, but also draws the conclusion that the goods to which the two marks are attached both originate from or have a certain association with the registrant in question.The Court found that the WKTM recognition of Monalisa's prior mark on tiles corroborated the fact that the mark had gained a remarkable market share and that stable correspondence had been established between the mark and Monalisa among the relevant public. The Court further found that "tiles" (of the prior mark) and "bathroom (flush toilet), toilet" (of the disputed mark) constituted similar goods for their association in respect of usage, production sector, sales channel and consumer group, and that the two marks shared similar components and holistic visual appearance. The Court also concluded that the reputation of the prior mark could extend to the disputed mark and the public would identify Monalisa as the source of the "bathroom (flush toilet), toilet" products. The public would be able to distinguish the disputed mark from the cited mark and would be unlikely to misconstrue or misidentify the source of origin of the goods to which the marks were attached.Retrial courtMonalisa BS and Monalisa BW jointly filed for trial supervision before the Beijing Municipal Procuratorate, which referred the case to the SPP. The SPP lodged a procuratorial protest before the Supreme People's Court (SPC), which remanded the case to the Beijing High Court for a retrial.The retrial court reassessed the merits of the case and expounded its view in an array of matters, including how to perform similarity assessments of trademarks and goods and continuation registrations.The retrial court weighed in on the shared components of the trademarks and the identical Chinese pronunciation of the disputed mark and the cited mark. Factoring in the reputation of the two marks, the retrial court concluded that the similarity of two marks could be established. The retrial court also found that the contentious goods of the disputed mark and the cited mark constituted similar goods, considering that they:were sanitaryware offered for sale in the same sales area or in proximity to each other;targeted the same group of consumers; andwere categorised under the same subclass by the International Classification of Goods and Services for Filing Trademark Applications.What is particularly intriguing is the retrial court's position on trademark continuation registrations. First, the retrial court reiterated the independence of the exclusive rights as conferred on a single trademark registrant by different registered trademarks, clarifying that trademarks registered by the same registrant in succession do not naturally make the later mark a continuation registration of the senior or prior one.The retrial court then analysed whether a cited mark registered by a third party chronologically in between a prior registered mark and a later applied-for mark of the same registrant or applicant may become an obstacle for the registration of the later mark. "In between" means the registration date of the cited mark falls between the registration date of the prior mark and the application date of the later mark. The retrial court opined that where such a cited mark is identical or similar to the later mark and has acquired a certain reputation by means of its continuous use, the later mark shall not be approved for registration, provided that the applicant of the later mark fails to prove that its prior mark has been used or has acquired reputation through use insofar as it is unlikely to create confusion among the relevant public.The retrial court reasoned that Monalisa's prior mark had been recognised as a WKTM as of 16 October 2006. However, the application date of the later (disputed) mark was 10 November 2004. Therefore, at the time Monalisa filed for the disputed mark, there was no evidence to prove that its prior mark had been known by the relevant public and had acquired a remarkable reputation. The prior mark was registered in class 19, yet the cited mark and the disputed mark were designated to be used on goods in class 11. The reputation of a trademark registered in class 19 cannot necessarily extend to goods in class 11. Again, the evidence adduced by Monalisa failed to prove that the reputation of the prior mark in respect of tiles:sufficed to distinguish the disputed mark from the cited mark, when the former was used on the goods "bathroom (flush toilet), toilet"; andwould not cause confusion or misidentification among the relevant public.The retrial court therefore threw out Monalisa's continuation registration argument.CommentThe retrial court's decision boils down the matter to the extension of reputation, rather than the continuation of the mark.In 2017, the SPC categorically rejected the concept of trademark continuation registration (except through registration renewal).(1) The applicants had attempted to leverage their prior registration to boost the chances of registrability of a later similar trademark. However, while the SPC acknowledged that reputation built up on a prior registration may be extended, it held that this is not automatic.In Monalisa v Monalisa BS et al,(2) Monalisa contended that its mark (the prior mark in this case) in class 19 should be granted protection in class 11 such that Monalisa BS's use of its mark (the cited mark in this case) constituted trademark infringement of its prior mark. The SPC dismissed this argument on the ground that the application date of the cited mark predated the date on which the prior mark had reached WKTM status.The Beijing High Court and the SPC have thus reached a consensus: where a registrant's prior mark fails to prevent the trademark of a third party in another class, the same registrant's later mark in the same class as the third party's registration may be challenged by the third party.For further information on this topic please contact Nan Jiang or Huimin Qin at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email ([email protected] or [email protected]). The Wanhuida Intellectual Property website can be accessed at www.wanhuida.com.This article was first published by LexisNexis.Endnotes(1) Spider King Group Co, Ltd v TRAB and USA Spider Group Limited.(2) (2017) Zui Gao Fa Min Zai No. 80.