Zhu Zhigang October 4 2021 Protection of foreign GIs in China Wanhuida Intellectual Property | Intellectual Property - China Zhu Zhigang Intellectual Property IntroductionGIs as geographical names known to the publicSui generis GIsGIs as collective trademarksOther remediesCommentIntroductionIn China, two different legal systems are used for the protection of geographical indications (GIs):the trademark system established by the China Trademark Office, now under the China National Intellectual Property Administration (CNIPA); anda sui generis protection system.The sui generis protection system itself is two-pronged:the regulation promulgated by the General Administration of Quality Supervision, Inspection and Quarantine, now being revised by the CNIPA, which concerns GI products in general; andthe regulation promulgated by the Ministry of Agriculture, now the Ministry of Agriculture and Rural Affairs (MARA), which applies only to agricultural GIs.The numbers of GIs registered in China are published periodically.As of the end of 2020, the total number of GIs registered as trademarks (collective trademarks or certification trademarks) was 6,085. The number of GI products registered in China was 2,391. On 1 March 2021, the CNIPA announced the protection of 96 additional GIs from Europe, pursuant to a bilateral agreement signed between the European Union and China.By June 2020, MARA had registered 3,090 GIs (exclusive of the aforementioned trademarks or GI products), none of which were foreign.China has provided a wide protection to GIs for a long time.GIs as geographical names known to the publicArticle 10(2) of the Trademark Law 2019 provides that names of administrative divisions at or above the county level and foreign place names that are known to the public may not be used as trademarks.This basic principle is often used for the protection of GIs.CIVC v Victoria's SecretFactsIn CIVC v Victoria's Secret (2019), the Interprofessional Committee for Champagne Wine (CIVC), which owns the collective trademark CHAMPAGNE in China, registered in Class 33 (wines) in 2013, opposed a trademark application filed by Victoria's Secret for the registration of the trademark VICTORIA'S SECRET CHAMPAGNE GLOW, designating the goods "cosmetic preparations for skin care; bath preparations, not for medical purposes; perfumes; etc" in Class 3.Because the goods designated by CIVC's collective trademark and those designated by Victoria Secret's application were different, the CIVC could not base its opposition on its collective trademark registered in Class 33. Therefore, the CIVC cited article 10(2) of the Trademark Law.DecisionThe CNIPA found that "Champagne" is a foreign geographical name which is well known to the public and considered that, since it had no other meaning than the name of the place in the opposed trademark, the trademark violated the provisions of article 10(2) of the Trademark Law. The trademark was thus refused.CIVC v "Petit Champagne"FactsIn CIVC v "Petit Champagne" (2019), the CIVC filed a complaint to the Tianjin Municipal Administration for Market Regulation (AMR), alleging that Hedong had been selling carbonated drinks named "Petit Champagne" and that such use infringed the registered collective trademark CHAMPAGNE.DecisionThe AMR held that the goods fell under the category of non-alcoholic beverages in Class 32 and, therefore, that the sale of such goods did not constitute trademark infringement. However, the AMR considered that the above act violated article 10(2) of the Trademark Law and, pursuant to article 52 of the Trademark Law, ordered Hedong to stop selling drinks named "Petit Champagne".Sui generis GIsArticle 16 of the Trademark Law provides as follows:Where a trademark has a geographical sign of the designated goods which do not originate from the place where the geographical sign indicates and is likely to mislead the public, such a trademark shall not be allowed for registration and shall be forbidden from practical use. However, where such a trademark has been approved and registered out of goodwill, it shall continue to be valid.In practice, sui generis GIs, regardless of whether they are registered in China, can benefit from the protection offered by the Trademark Law.CIVC v Seven Star Champaign FactsIn CIVC v Seven Star Champaign (2015), the CIVC sued a company, Beijing Sheng Yan Yi Mei Trade, which was selling bottles of red and white wine known as "Seven Star Champaign", before the Beijing First Intermediate People's Court in 2011.In 2011, the CIVC did not own any trademark registrations for the name "Champagne". The CIVC tried several arguments, including article 16 of the Trademark Law.The defendant argued that, in the absence of registration, the provisions of Chapter 7 of the Trademark Law (providing for the enforcement of registered trademark rights) could not apply.DecisionThe Court held that since article 16 of the law provides not only that a sign containing a geographical name cannot be registered if the goods do not originate from the place in question, but also that such name is prohibited from use, the enforcement of such a prohibition is, therefore, implied in the law.The Court thus ruled in favour of the CIVC and ordered the defendant to stop selling the infringing products.INAO (Romanée Conti) v Wu LipingFactsIn INAO (Romanée Conti) v Wu Liping (2019), Wu Liping applied for the registration of the trademark 罗曼尼康帝 (the "disputed trademark"), which is the transliteration of "Romanée Conti", designating the goods "aperitif, wine, etc" in Class 33. The mark was registered on 14 November 2017.The National Institute of Origin and Quality (INAO) filed an application for the invalidation of the disputed trademark on the grounds of the following articles of the Trademark Law:article 7 (bad faith);article 10(1)(7) (deceptive mark as to the place of origin);article 10(1)(8) (disruption of the social order);article 10(2) (foreign place name known to the public); andarticle 16 (GIs).The CNIPA rejected the INAO's application. The INAO appealed to the Beijing IP Court.DecisionRegarding article 16 of the Trademark Law, after reviewing the evidence produced by the INAO, the Beijing IP Court was satisfied that "Romanée Conti" was a GI as defined by article 16 of the Trademark Law, and that "罗曼尼康帝" was the transliteration thereof, known to the public in China. Regarding the CNIPA's argument that "Romanée Conti" had not been registered as a collective or certification trademark, and therefore was not entitled to protection, the Court affirmed that registration as a collective trademark or certification trademark is not a prerequisite for the protection of a GI.GIs as collective trademarksThe protection of collective trademarks follows the same general principles as for "ordinary" trademarks. There are abundant favourable decisions in which GI collective trademark holders have successfully opposed or invalidated copycat trademark applications and registrations.However, the enforcement, especially civil and criminal, of GI collective trademarks, remains rare. Two landmark cases are worth mentioning.CIVB v Yantai LarkIn CIVB v Yantai Lark (2019), the Shandong High Court upheld a first-instance judgment rendered by the Yantai Intermediate Court in favour of Conseil Interprofessionnel du Vin de Bordeaux (CIVB), the owner of the BORDEAUX GI collective mark in a civil suit. Both courts found that:the defendant's unauthorised use of "Bordeaux" infringed CIVB's collective trademark;the defendant, by using "Bordeaux" as an appellation of controlled origin on its products, had forged the origin of the product. This false advertising (claiming that all of its products were imported from France) constituted unfair competition; andtaking into account the reputation of the BORDEAUX collective trademark and the circumstances of the defendant's infringement, the defendant had to pay 500,000 yuan as damages.This case was selected as one of the Shandong High Court's top 10 IP cases in 2019.CIVB v Shanghai Feitong Trading Company and Zhuge RuiyongIn CIVB v Shanghai Feitong Trading Company and Zhuge Ruiyong (2020), the Shanghai Pudong People's Court handed down a judgment in a criminal proceeding, which found Shanghai Feitong Trading Company and its actual operator Zhuge Ruiyong to be criminally liable for counterfeiting the collective trademark BORDEAUX. Zhuge Ruiyong was sentenced to imprisonment for one-and-a-half years with probation (a lenient decision based on his voluntary indemnification of CIVB's losses). The Court:imposed a fine of 100,000 yuan on Shanghai Feitong and 50,000 yuan on Zhuge Ruiyong;confiscated the counterfeit "Bordeaux" wines; andprohibited Zhuge Ruiyong from engaging in food production and distribution business until the end of his probation.In practice, the criminal enforcement of the BORDEAUX collective trademark has been somewhat difficult in China. Some of the difficulties are the result of the requirement to submit, as a reference, an authentic product. In the case of the BORDEAUX collective trademark, there are many authentic samples, hence the difficulty to satisfy the requirement.This case was selected as one of the Shanghai Pudong Court's top 10 IP cases in 2020 and one of the CNIPA's top 10 trademark administrative enforcement cases in 2020.Other remediesIn some cases, the law enforcement agencies protect GIs from different perspectives.CIVB v Yueyang MengyanIn CIVB v Yueyang Mengyan, the Yueyang AMR ascertained that the Bordeaux and Margaux GIs were registered in China and enjoyed GI protection. Yueyang Mengyan's unauthorised use of "Bordeaux" and "Margaux" was in violation of article 5(4) of the Measures for the Punishment of Acts Harming Consumers' Rights and Interests, which provides that: "Business operators shall not have the following behaviors: (4) Sales of forged or fraudulent use of product quality signs (GI, BIO, etc.)".Based on the above, the AMR ordered Yueyang Mengyan to immediately cease using the Bordeaux and Margaux GIs and imposed a fine of 70,000 yuan.CommentForeign GIs are protected even if they are not registered in China, as shown by CIVC v Seven Star. Article 16 of the Trademark Law allows the holder of a GI to request a people's court to order an infringer to stop the production and sale of a product bearing an infringing name or labelling. Further, articles 10(1)(7) and 10(2) of the Trademark Law offer other remedial approaches to oppose applications, obtain invalidations or stop the illegal use of a trademark that is identical or similar to a GI.However, being registered as a collective trademark enables GI holders to benefit more from enforcement – when registered, the entire arsenal of trademark law, customs regulations and criminal law is available. GI holders not only may seek administrative actions against an infringer, but may also obtain financial compensation. The cases cited in this article prove that the protection is effective, even if obtaining satisfactory results requires a significant effort from the GI holder. It is thus preferable to register a GI as a collective trademark in China.For further information on this topic please contact Zhigang Zhu 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.This article was first published by LexisNexis.