Sun Ruirui February 13 2023 LVMH Swiss successfully blocks copycat application incorporating its shield device in China Wanhuida Intellectual Property | Intellectual Property - China Sun Ruirui Intellectual Property FactsDecisionCommentFactsBased in Switzerland, LVMH Swiss Manufactures Sa (LVMH Swiss) is a wholly owned subsidiary of the LVMH group, offering luxury Swiss watches. TAG Heuer is a watchmaking pioneer and one of the eight brands under LVMH Swiss's houses in the watches and jewellery sector.LVMH Swiss owns trademark registrations for the following in class 14, among others:a shield device trademark featuring the stylised words "TAG HEUER" (Figure 1);a shield device in black (Figure 2); anda shield device in white (Figure 3).Figure 1: LMVH Swiss's shield device combination markFigure 2: LMVH Swiss's shield device in blackFigure 3: LMVH Swiss's shield device in whiteOn 15 December 2020, a natural person, Xiaohui Cai, situated in Guangdong, China, filed an application to register the trademark shown in Figure 4 in class 14 in China.(1)Figure 4: Xiaohui Cai's applied-for trademarkAfter its publication on 20 May 2021, LVMH Swiss filed an opposition against the mark before the China National Intellectual Property Administration (CNIPA).DecisionThe CNIPA disapproved the registration of the opposed mark on all designated goods because the goods of the opposed trademark were similar to those covered by the opponent's prior trademarks. Considering the high reputation of the cited prior trademarks and their similarity with the opposed trademark in respect of word arrangement, design and overall visual effect, the coexistence of both parties' marks could mislead consumers as to the origin of the goods. Thus, the opposed mark and the cited marks constituted similar marks on similar goods, which violates article 30 of the Trademark Law.The CNIPA's 2021 Trademark Examination and Adjudication Guidelines states as follows with respect to assessing the similarity of combination marks:If the device parts of two trademarks are identical or similar, which may cause confusion among the relevant public as to the source of the goods or services, the two marks shall be deemed as similar trademarks. However, in case the devices in the trademarks are commonly used patterns on the designated goods, or mainly serves as an ornamental or background element in the whole trademark so that the device parts are of weak distinctiveness, and the overall meaning, pronunciation or appearance of the two trademarks are obviously different insofar as it is unlikely to cause confusion among consumers, the two trademarks shall not be deemed as similar trademarks.In this case, the opposed mark incorporated the same shield device as LVMH Swiss's prior trademarks, but the word part, "英吉纳 INKINO", was markedly different from "TAG HEUER". The opposition would not stand if the examiner found the shield device to be a pure background feature or decorative element in the whole mark and referred to the above rule to rebut the similarity argument.In order to make a strong case, LVMH Swiss presented the following arguments in the opposition:The shield device was an original creation and special design of LVMH SWISS. It is highly distinctive.Although the shield device had been incorporated in the combination mark (Figure 1), the device had also been registered as a standalone mark and had been widely used by Tag Heuer on the bezel, the crowns and wrist straps of many watches as well. Both the combination mark and the shield device had obtained a high reputation among consumers.The adverse party lacked a genuine intention to use the opposed trademarks. Online searches revealed that the applicant had been offering more than 50 trademarks for sale.The CNIPA found the arguments tenable and disapproved the registration of the opposed mark.CommentIn trademark prosecution practice, trademarks that combine word and device elements have increasingly fallen victim to trademark squatting. By separating a device from a combination trademark and incorporating a different word mark, the trademark squatter creates an inconspicuous copycat mark that may slip through the CNIPA's examination if the victimised device mark is deemed to be purely an ornamental or background element.As a countermeasure, brand owners are strongly advised to proactively register devices that are intrinsically distinctive as standalone trademarks. If possible, brand owners should extensively use such devices on the designated goods, the product packaging and in various business settings.As well as citing article 30 of the Trademark Law, LVMH Swiss also raised a prior right argument (article 32) before the CNIPA, based on its copyrighted work of the fine arts over the shield device in black (Figure 2). Although the CNIPA dismissed the copyright claim in the subject case, this option may offer an alternative if the device of a brand owner's combination mark meets the originality requirement for copyrighted works.For further information on this topic please contact RuiRui Sun at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email ([email protected]). The Wanhuida Intellectual Property website can be accessed at www.wanhuida.com.An earlier version of this article was published by WTR.Endnotes(1) No. 52166954.