34 May. 2016
China's Supreme People's Court heard "Jordan" case...............................................................2
Wexin changes not only lives but also the rules of game.........................................................................3
Re-analysis of "PRETUL" retrial case in terms of infringement judgment criterion..............................4
Brand transliteration: how to translate and protect your brand for the Chinese market................................7
Article 30 of the Chinese Trademark Law A doubleedged sword in trademark examination and opposition ..............................................................10
Trademark Enforcement in China .....................................................................13
Do new patent infringement trial rules really benefit design protection in China?.................................16
From the Editor
This issue focuses specially on the colorful trademark domain of China, which is full of various cases and discussions for years. Among them are the recent "Jordan" cases which are still pending before China's Supreme People's Court and relate to conflict of registered trademarks with prior name rights, and the "Weixin" case, for which the final decision has been made by the Beijing High People's Court.
China is well known for its manufacturing power. OEM, i.e. original equipment manufacturer, is always taken as an engine for prompting the country's economic development. In Pretul case before the Supreme People's Court, at issue was whether OEM for a legitimate trademark holder abroad constitutes use of a tradeamrk in China. Our attorney looked at the case from a different perspective.
We further scrutinized how to transliterate a foreign trademark in China. Examples show that a company successful in foreign countries shall have a great Chinese tradeamrk before they can recapture success in China. Besides, we looked into the application of Article 30 of the Chinese Trademark Law and effective enforcemt of trademarks in China.
Finally, we discussed the newly issued Judicial Interpretation (II) of the Supreme People's Court in connection with design protection in China. The Supreme People's Court clarified some pending issues in the Judicial Interpretation (II), but do they really benefit the right holders as announced by the Court?
2016 INTA Annual Meeting: CCPIT Reception and Meeting Invitation
A team of attorneys from CCPIT Patent and Trademark Law Office will be attending the 2016 INTA Annual Meeting in Orlando. We will have meetings with our clients and friends in a hospitality suite. The operation time and location of our hospitality suite are:
May 23, Monday 9:00 am - 4:30 pm May 24, Tuesday 9:00 am - 4:30 pm May 25, Wednesday 9:00 am - 4:30 pm Salon 1 (Mezzanine Meeting Rooms) Rosen Centre Hote, 9840 International Drive, Orlando, FL 32819
Our clients and friends are also cordially invited to our cocktail reception featuring live Chinese folk music and dance. The details of our reception are:
Date: Time: Venue:
May 24, Tuesday 6:00 pm - 9:30 pm Grand A-B (Ground Floor) Rosen Centre Hotel, 9840 International Drive, Orlando, FL 3281
1. China's Supreme People's Court heard "Jordan" cases
Michael Jordan is the retired NBA superstar and is also well known in China. Qiaodan Sports Co. is a sportswear company in Jinjiang, Fujian province of China. Qiaodan Sports registered trademarks for "Qiaodan"- a Chinese transliteration of "Jordan", "Qiaodan" in Chinese Pinyin and their various combinations with a figure in a shadowy design showing only a silhouette.
Qiaodan Sports started to use the Chinese transliteration "Qiaodan" as its trade name since 2000. Qiaodan Sports took "Qiaodan" (in Chinese) and the figure in a shadowy design showing only a silhouette as the main registered trademark and registered various defensive trademarks during the years (below shows one of the trademarks).
In 2012, claiming that the registered trademarks by Qiaodan Sports had, among others, infringed his name right, Michael Jordan filed requests with the Trademark Review and Adjudication Board (TRAB) of the State Administration for Industry and Commerce for revoking the related trademarks registered by Qiaodan Sports. The TRAB found that as that Jordan is a common family name in Anglo-American world, it is difficult to identify the corresponding relationship between the family name Jordan and Michael Jordan as a matter of course, and thereby rejected Michael Jordan's requests. Michael Jordan appealed.
Both the Beijing First Intermediate People's Court and the Beijing High People's Court upheld the TRAB's decisions. Michael Jordan requested retrial of 68 cases with the Supreme People's Court. In December 2015, the
Supreme People's Court issued certiorari to 10 cases by finding that Beijing High People's Court missed one of appeal causes asserting that the registered trademarks violate Michael's name rights and don't comply with Article 31 of the Chinese Trademark Law (2001).
In the morning of April 26th, 2016, the Supreme People's Court of the P.R.C. heard the cases jointly.
The point in dispute during the oral hearing of the retrial is whether the registration of the trademarks violate Michael Jordan's name rights. The attorneys of Michael Jordan asserted that, the Chinese transliteration "Qiaodan" of Jordan and the corresponding Pinyin are identifiers of Michael Jordan, as Jordan enjoys extremely high reputation in China, marketing of commodities under the trademarks for "Qiaodan" will absolutely be regarded as authorized by Michael Jordan himself, and thus infringes the relevant rights and interests of Michael Jordan. The TRAB argued that Michael Jordan shall be barred from enforcing his rights due to laches upon requesting revocation after 12 years of registration of the trademarks in dispute and the asserted high reputation of "Qiaodan" is created by Qiaodan Sports rather than by Michael Jordan.
The panel didn't announce their decisions after the oral hearing but suggested that, in light of the limited trial time, each side may submit written opinions within seven working days of the oral hearing. It is expected that decisions will be made by the Supreme Court very soon.
(below is a franchise house of Qiaodan Sports Co. Ltd.)
2. Weixin changes not only lives but also the rules of game
On April 20, 2016, the Beijing High Court made the finial judgment on the Weixin (Wechat in English) trademark opposition case, upholding the decision of the Trademark Review and Adjudication Board (TRAB), which refused registration of the trademark application for Weixin by a Chinese company Trunkbow Asia Pacific (Shandong) Co. The judgment essentially hints that Tencent Inc. owns the Weixin trademark and can continue using the Weixin trademark for its instant messaging service initiated in earlier 2011, which by the end of the third quarter of 2015, had obtained 650 millon monthly active users (for both Weixin and Wechat). Trunkbow applied for registration of Weixin trademark on November 12, 2010, about two months earlier than the initiation of Weixin instant messaging service by Tencent, on computer software and communication services.
The trademark application was rejected by the China Trademark Office (CTO) on August 27, 2011, as a third party Xinhe Zhang, possibly a strawman of Tencent, filed an opposition against it. The rejection was upheld by the TRAB. Trunkbow appealed.
The Beijing IP Court upheld the decision of the TRAB on the ground that, besides complying with the first-to-file rule of trademark registration, the public interests as well as the stable market order which has already been formed shall also be taken into consideration in this case. When conflict arises, the court shall strike a balance in view of the actual market and the facts of the case. The court held, in this case, it is more justifiable to protect the public interests than the interests of the applicant.
The Beijing IP Court's judgment triggered an earthquake in the trademark domain where the first-to-file rule has been taken as a headstone.
Trunkbow appealed the judgment to the Beijing High Court, which rejected the appeal and upheld the first instance judgment and the TRAB's decision, but on a different ground.
The Beijing High Court found that the Weixin trademark itself has no inherent distinctiveness. In particular, the Court found the Chinese character for "Wei" means "micro" or "little", when being used on communication services in combination with the Chinese character "Xin" which generally means communication, the relevant publics are likely to regard it as a kind of communication method which is shorter and more convenient than email and short message. In this case, Weixin is not likely to be a mark for identifying the source of services and therefore lacks inherent distinctiveness.
The Beijing High Court handled down the case in a smarter way than the first instance decision when denying the first-tofile rule since the inherent distinctiveness of Weixin is more difficult to argue. Yet no one had doubted the distinctiveness of Weixin since it was put into the market.
Elsewhere, Weixin has acquired secondary meaning by intensive use through the instant messaging services provided by Tencent and is now associated with Tencent. The big communication giant shall appreciate the leniency of the judges when it took such a dangerous strategy throughout the case.
Re-analysis of "PRETUL" retrial case in terms of infringement judgment criterion
Author: Xiaomeng Dong
Brief introduction of "PRETUL" retrial case
fulfillment of the source indicator function of the trademark.
The plaintiff (hereinafter "FOCKER") was the owner of the registered mark "PRETUL" in China. It alleged that the defendant (hereinafter "YAHUAN", a Chinese company) had infringed its trademark rights by using same or similar mark "PRETUL". The "PRETUL" branded padlocks manufactured by YAHUAN were all entrusted by "TURPER" (a Mexican dealer) and all its manufactured padlocks were only for exportation to Mexico. On November 26, 2015, the China's Supreme People's Court ("SPC") rendered a civil judgment on this retrial, affirming that the OEM manufacturer's act of using the trademark in issue did not constitute trademark infringement because it did not qualify as trade mark use in the sense of article 48 of the Trademark Law (2013 version). The
The Court should base its finding on whether trademark infringement is constituted on whether the source identifying function of the trademark is fulfilled or undermined. There is no practical significance in judging that there is a likelihood of confusion where the trademark involved fails to fulfill its identifying function and does not constitute trademark use in the sense of trademark law......Since the padlocks manufactured by YAHUAN were not for distribution in the Chinese market, the PRETUL marks did not fulfill the trademark function of `distinguishing the origin of the commodities' in China. Therefore, such marks were unlikely to cause confusion and misidentification among the relevant public in China between the products to which they were
affixed and the source of the goods
There is no practical significance in judging that there is a likelihood of confusion where the trademark involved fails to fulfill its identifying function and does not constitute trademark use in the sense of trademark law...
manufactured by FOCKER".
There is a voice in Chinese intellectual property circle that the PRETUL retrial case has great guiding significance to OEM infringement cases in China. Some people
hold the view that "PRETUL" case has the
SPC overruled the finding of trademark infringement in the first
function to confirm that "trademark use in the sense of
instance (Intermediate Court of Ningbo) and in the second
trademark law" is the precondition of trademark infringement
instance (High court of Zhejiang).
judgment in China. This article intends to re-analyze "PRETUL"
In the retrial, the SPC held that "The primary function of a trademark, which the Trademark Law intends to protect, is to
retrial case in terms of Chinese infringement judgment criterion.
be a source indicator. When determining whether the act of I. Is it rational to take "trademark use in the sense of
using an identical trademark on identical goods, or a similar trademark law" as the precondition of trademark
trademark on identical goods or an identical or similar trademark on similar goods, is likely to cause confusion, the Court shall base its finding on the fulfillment or possible
infringement judgment in China?
Though in "PRETUL" retrial, the immediate ground for the SPC
to deny the infringement complaint is "the trademark in issue did not qualify as trade mark use", it is too early to simply draw a conclusion from this case that "trademark use in the sense of trademark law" is the precondition of trademark infringement judgment in China.
First, there is no provision in the laws under which "trademark use in the sense of trademark law" is an essential factor in determination of trademark infringement.
Second, currently in China, if a mark is used in OEM process, such use evidence will be regarded effective in maintenance of the mark against non-use cancellation request.
Third, whether "trademark use in the sense of trademark law" is a precondition in finding trademark infringement is controversial in theory and practice. Objectors such as Graeme B. Dinwoodie and Mark D. Janis hold that "trademark use in the sense of trademark law" lacks strong basics of law. Boosters such as Stacey L. Dogan and Mark A. Lemley hold that "trademark use in the sense of trademark law" sits at the heart of trademark law, which is a necessary tool to maintain integrity of trademark law. It is not fabrication by imagination.
II. Re-analysis of "PRETUL" retrial case in terms of infringement judgment criterion in China.
According to Art. 57 of the Trademark Law, any of the following constitutes an infringement of the exclusive right to use a registered trademark: 1) Using a trademark that is identical with a registered trademark in connection with the same goods without the authorization of the owner of the registered trademark; 2) Using a trademark that is similar to a registered trademark in connection with the same goods, or that is
identical with or similar to a registered trademark in connection with the similar goods, without the authorization of the owner of the registered trademark, which may cause public confusion.
According to Art. 16 of TRIPS, the owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making available on the basis of use.
Like provisions of TRIPS, "likelihood of confusion" criterion is adopted in China on trademark infringement issues. Namely, in case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed, while in the other cases, whether infringement should be confirmed will depend on whether there is a likelihood of confusion.
For "likelihood of confusion" criterion, most countries use "Multi factor detection method". Normally, four factors are considered in determining whether there is trademark infringement, i.e., trademark factor, goods/services factor, consumer factor and others. In "PRETUL" case, the four factors could be analyzed as below:
Trademark factor: Though the mark used by the defendant and the plaintiff are similar, on the external packing and directions of the products in issue, the illustrations "Importer:
TURPER" in Spanish could all be found. In addition, the contact channels of TURPER, including telephone numbers and website, were also shown on products. Hence, no matter for Mexican or Chinese consumers, they could quickly realize that the products in issue are from TURPER, not FOCKER.
Goods/services factor: The products in issue by the defendant were 100% exported to Mexico, while, the goods of the plaintiff were used in mainland China since there was no contrary evidence proving its goods were exported out of China. The goods of both parties were used in completely different marketing channels and facing totally different consumers. The goods of the plaintiff and defendant are not similar considering the aforementioned.
Consumer factor: All the padlocks manufactured by YAHUAN were exported to Mexico. The consumers of these products are all foreign consumers. But, the plaintiff's consumers are in mainland China. The two brands face different consumers.
First, the "PRETUL" branded padlocks manufactured by YAHUAN were all entrusted by "TURPER" (a Mexican dealer) and all the padlocks were exported to Mexico. "TURPER" had registered `PRETUL' mark No. 770611 in class of 6 in Mexico on November 27, 2002.
Second, YAHUAN submitted a lot of evidence proving TURPER company's PRETUL mark had high reputation through wide use, but there's no evidence proving the FOCKER company's PRETUL mark had certain influence.
Third, what's more, there are sufficient evidence to testify that the plaintiff's PRETUL mark was filed in plagiarism of the defendant's marks and the plaintiff's mark was obtained against Honesty and Credibility Principle.
In conclusion, considering the trademark, goods, consumers and other factors, no confusion likelihood exists for use of the trademark in issue in this case. Based on "confusion likelihood criterion", it is reasonable to affirm the OEM manufacturer's act of using the trademark in issue did not constitute trademark infringement.
III. How to correctly treat the function of "trademark use in the sense of trademark law" in trademark infringement cases?
"Trademark use in the sense of trademark law" is not an independent factor. It is just one factor of possibility of confusion judgment. "Trademark use in the sense of
"Trademark use in the sense of trademark law" is not an independent factor. It is just one factor of possibility of confusion judgment.
trademark law" is internalized in judgment of infringement process. In "PRETUL" retrial case, the SPC cracked problem from the angle of "Trademark use in the sense of trademark law" based on case details, which has reflected its extreme high judicial wisdom. But in essence, the spirit of this retrial judgment has followed "likelihood of confusion principle criterion" and based on such criterion, the same conclusion could be achieved, that is, OEM manufacturer's act of using the trademark in issue did not constitute trademark infringement.
Brand transliteration: how to translate and protect your brand for the Chinese market
Author: Hongyan Wang
When entering the Chinese market, in addition to registering their Latin trademarks in China, foreign companies must select a corresponding Chinese trademark and register it in a timely manner, in order to connect with Chinese consumers on the one hand and protect their trademark rights fully and comprehensively on the other. e complexities of the Chinese language can make this a challenging task. is article explains how to translate and protect your brand in the Chinese market.
Translating your brand
e most remarkable feature of Chinese characters is that they do not directly indicate a pronunciation, but rather combine shapes and meanings. Each Chinese character can be marked with Mandarin Chinese pronunciation through Chinese pinyin. One Chinese character may have different pronunciations, while different Chinese characters may have the same pronunciation;
and many Chinese characters have similar pronunciations but different tones.
When translating a trademark, the corresponding Chinese mark should conform to the requirements of the Trademark Law. Among other things, it should:
not directly indicate the functions and features
of the goods or services; and
not violate the prohibitions set out in the Trademark Law.
From the linguistic perspective, the trademark should follow grammatical rules, have a clear pronunciation and be succinct and easy to remember. From the advertising and marketing perspective, the trademark should be novel, convey a pleasant rather than unpleasant meaning, be attractive to consumers and align with the business features and market orientation.
Foreign trademarks typically, Latin trademarks are often
translated into Chinese in the following ways.
If a foreign trademark has a practical meaning, the
corresponding Chinese characters with the same meaning
may be used as the Chinese trademark. For instance, the
corresponding Chinese trademark of APPLE is `
GUO); SHELL is `
' (QIAO PAI), and VOLKSWAGEN is
` '(DA ZHONG). However, Chinese trademarks which are
directly translated according to their Chinese meaning
account for only a
small proportion of all trademarks; most foreign trademarks have no practical meaning. Moreover, in certain circumstances, a foreign trademark may have a corresponding Chinese meaning, but the company may opt not to use the literal translation because it lacks a clear pronunciation or for some other reason.
Transliteration is an approach by which the corresponding
Chinese characters are selected to form a Chinese trademark
that echoes the pronunciation of the foreign trademark. Most
Chinese trademarks designed in this way have no specific
meanings. For example, the corresponding Chinese
trademark of CADILLAC is `
' (KAI DI LA KE), ARMANI
' (A MA NI), HILTON is `
' (XI ER DUN),
BOEING is `
' (BO YIN), SONY is `
"'(SUO NI) and
SIEMENS is `
' (XI MEN ZI).
Some foreign trademarks have no practical meaning, but are translated into Chinese characters or phrases with a practical meaning that reflects their features; these translations are creative, imaginative and impressive.
For instance, BMW has no practical meaning and is hard to translate into Chinese according to its pronunciation. The
corresponding Chinese trademark is ` ', whose Chinese pinyin is BAO MA, meaning `precious horse'. In ancient China, the horse was an important mode of transport. `Precious horses' were rare beasts said to be able to cover 1,000 miles in a single day; there are many ancient Chinese poems in praise of them. These connotations, which reflect Chinese culture and will resonate with Chinese consumers, make the use of this mark for automobiles very appropriate.
Combination of transliteration, literal translation and adaptation
In practice, most Chinese trademarks are selected through a combination of transliteration, literal translation and adaptation.
For instance, the corresponding Chinese trademark of
STARBUCKS is `
' (XING BA KE). The first character
is the literal translation of `star', and the last two are the
transliteration of `buck'.
One important feature of the Chinese language is the
prevalence of homonyms. Different characters have the same
pronunciation and probably dozens of Chinese characters
have similar pronunciations, but different tones. Many Chinese
trademarks on the market are chosen through a judicious
combination of transliteration and adaptation. the most typical
example is the COCA-COLA trademark. the corresponding
Chinese trademark is `
', whose Chinese pinyin (KE
KOU KE LE) is similar to the pronunciation of COCA-COLA and
may thus be regarded as a trademark selected through
transliteration. However, the individual Chinese characters
lend an added dimension to the mark: `
' means `tasty'
or `delicious', while `
' means `pleasing'. At the same
time, the mark KE KOU KE LE as a whole is a fanciful term with
no meaning in Chinese and does not directly indicate the
functions or features of the goods; thus, it is distinctive as
required under the Trademark Law.
Other good examples can be found in the cosmetics sector.
the corresponding Chinese trademark of ESTEE LAUDER is
` ' (YA SHI LAN DAI); the corresponding Chinese
trademark of CHANEL is `
' (XIANG NAI ER); and the
corresponding Chinese trademark of LANCOME is ` ' (LAN
KOU). All of the selected Chinese characters relate to beauty,
elegance, poetry, flowers, perfume or similar; all marks are
similar to the Latin trademarks in pronunciation; and all are
easy to read. Once again, the Chinese trademarks as a whole
are fanciful terms with no specific meaning in the dictionary.
Thee selection of Chinese trademarks is often determined
through a combination of transliteration, translation and adaptation,
while also factoring in the features of the goods, consumer psychology and market effects. Only through such meticulous translation and design can a trademark be selected that corresponds closely to the foreign trademark and has a clear pronunciation, impressive meaning and high level of consumer recognition.
When selecting Chinese trademarks, it is important to carry out trademark searches for the marks under consideration, to ensure that they do not conflict with the prior rights of others, whether registered or pending registration.
Protecting your brand
A carefully selected Chinese trademark can play an important role in the success of your brand and your business. e Trademark Law enshrines the principle of prior application; where two or more applicants apply to register identical or similar trademarks in respect of the same or similar goods, the Trademark Office will approve for publication the mark with the earliest application date and reject the other trademark applications. us, foreign companies would be well advised to select their corresponding Chinese trademarks before entering or upon entering the Chinese market.
The case of the CASTEL trademark is a good example of the importance of a timely application. French Chateau Castel, the largest vintner in Europe, has registered the CASTEL
trademark in respect of wine in China, but has not registered
the corresponding Chinese trademark. It entered the Chinese
market in 1998 and began to sell high volumes of wine marked
with the Chinese trademark `
' (KA SI TE) from 2006.
This became one of the most popular wines in China, with
annual sales of several hundred million renminbi. However, Li
Daozhi, a Spanish natural person, applied to register the
Chinese trademark `
' which is the transliteration of
CASTEL in respect of wine in 1998. In 2005 French Chateau
Castel unsuccessfully applied to cancel this registration based
on non-use for three consecutive years. Afterwards, Li Daozhi
and Shanghai PANATI Wine Co, Ltd, which was authorised by
Li Daozhi to use the trademark `
', filed suit against
French Chateau Castel for infringing their exclusive right to use
the registered trademark `
'. In July 2012 the court of
final instance ordered French Chateau Castel and its
distributors to cease using the trademark `
' and pay
Rmb33.73 million to Li Daozhi and Shanghai PANATI Wine Co.
China has adopted the Nice Classification of Goods and Services. The appropriate classes in which to register the trademark should thus be considered. For instance, for a trademark that is mainly used on garments, protection should be sought not only in Class 25, but also for bags in Class 18, cosmetics in Class 3, eyeglasses in Class 9 and sales services in Class 35. Moreover, the Trademark Office sub-divides the goods and services in each class into different sub-classes, depending on their materials, functions, purpose of use, sales channels and target consumers. Goods and services in different sub-classes are generally deemed dissimilar. For example, shoes and hats are in different sub-classes in Class 25. erefore, when applying for trademark registration, you should also consider the related goods and services in different sub-classes.
Top tips for protection
In order to effectively protect your brand, attention should be paid to the following points:
Apply in a timely manner to register the foreign
trademark in China, translate your brand into Chinese, design a corresponding Chinese trademark, conduct trademark searches and apply to register the Chinese trademarks in China for the purpose of use and protection.
Simultaneously apply to register several alternative Chinese trademarks in case one or more of them is rejected.
When applying for trademark registration, consider all
related goods, classes and sub-classes so as to avoid omissions.
Once used on the market, except for special reasons, the Chinese trademark should not be changed arbitrarily, in order to ensure its stability.
Retain evidence of use of the trademarks in case of possible non-use cancellations, oppositions, invalidations or infringement cases.
Conduct trademark watches to identify identical or similar applications and file oppositions or invalidations against them in a timely manner.
Given the features of the Chinese language and the Chinese market, the careful selection and timely registration of Chinese can ensure the protection of your brand and lay a solid foundation for its marketing, promotion and success in China.
Article 30 of the Chinese Trademark Law A double-edged sword in trademark examination and opposition
Author: Hui Gao and Xi Chen
Article 30 of the Chinese Trademark Law plays different roles and achieves different effects in trademark examination and opposition procedures. By analyzing the different applicable circumstances of this article in trademark examination and opposition procedures, the authors hereby put forward their suggestion to perfect Article 30 of the Trademark Law.
Article 30 of the Trademark Law provides that "Where a trademark application does not comply with the relevant provisions in this Law or is identical with or similar to a registered trademark used in connection with the same or similar goods, its registration shall be refused by the Trademark Office after examination and the mark shall not be published."
As the purposes and protected legal interests in official active examination are different from those in concerned party's opposition cases, Article 30 of the Trademark Law thus becomes a double-edged sword in trademark examination and opposition procedures and plays different roles in different procedures.
I. While applying Article 30 of the Trademark Law in trademark examination procedure, literal interpretation shall be used
When examining a trademark, the Trademark Office may, pursuant to Article 30 of The Trademark Law, cite any article of The Trademark Law to refuse a trademark application. For instance, Article 50 is currently cited by the Trademark Office to refuse a trademark application under the ground that the trademark cannot be approved within one year since the expiration of the validation period of the prior similar mark. Article 50 of the Trademark Law provides that "where a registered trademark has been cancelled, invalidated or has not been renewed upon expiration, the
Trademark Office shall not approve any application for the registration of a trademark that is identical with or similar to the said trademark for a period of one year from the date of cancellation, invalidation, or the date of expiration."
The legal basis on which the Trademark Office cites Article 50 of the Trademark Law to refuse a trademark application is the provision of Article 30 of the Trademark Law that "Where an application for registration of a trademark is not in compliance with the relevant provisions of this Law...the Trademark Office shall refuse to accept the application and shall not publish the same." While applying Article 30 of the Trademark Law in trademark examination procedure, literal interpretation shall be used. That is to say, the Trademark Office may cite any article of the Trademark Law to refuse a trademark application.
When examining trademarks, the Trademark Office exercises the rights afforded under the law for the purpose of protecting public interests and preventing confusion. Therefore, the rights endowed by law to the Trademark Office to refuse a trademark application that "is not in compliance with the relevant provisions of this Law" are in conformity with the original intention of trademark examination set up by law and are in conformity with the legislative objectives of protecting public interests.
II. In opposition cases, restricted interpretation shall be applied to Article 30
Article 33 of the Trademark Law provides that "Any holder of prior rights, or interested party may, within three months from the date of publication, in violation of the provisions of Article 13 Paragraph 2, Article 13 Paragraph 3, Article 15, Article 16 Paragraph 1, Article 30, Article 31, or Article 32, or any person may, in violation of the provisions of Article 10, Article 11, or Article 12, file to oppose a trademark application that has been published after a preliminary
examination and approval. Where no opposition is filed after three months, the application shall be approved for registration, a certificate of registration shall be issued, and the mark shall be published."
Article 30 of the Trademark Law provides that "Where a trademark application does not comply with the relevant provisions in this Law or is identical with or similar to a registered trademark used in connection with the same or similar goods, its registration shall be refused by the Trademark Office after examination and the mark shall not be published."
In consideration of the above two articles, some people hold that the prior right owner or any interested party may file an opposition against a trademark application in accordance with any provisions of the Trademark Law. It means that the prior right owner or interested party may file an opposition not only in accordance with the absolute reasons specified in Article 33 of the Trademark Law, namely Article 10, Article 11 and Article 12, but also in accordance with other articles of the Trademark Law, for instance Article 4 and Article 7.
In our opinion, restrictive interpretation shall be given to Article 30 in Article 33 of the Trademark Law. That is to say, Article 30 in Article 33 of the Trademark Law only refers to "Where a trademark application is identical with or similar to a trademark of another party that has been registered or accepted in respect of identical or similar goods, the Trademark Office shall refuse to accept the application and shall not publish the same", not including "Where an application for registration of a trademark is not in compliance with the relevant provisions of this Law ... the Trademark Office shall refuse to accept the application and shall not publish the same". The authors hereby elaborate the above claim from the following aspects.
a. The above conclusion may be made by the method of system interpretation.
Article 33 of the Trademark Law provides that any person may file an opposition against the application for registration of a trademark with the Trademark Office if he finds that the application stands in violation with the provisions of Article 10, Article 11, or Article 12 of this law. In this article there is an expressive explanation by sample mode about the absolute reason for raising an opposition, namely one may only raise an opposition based on the absolute reasons in Article 10, Article 11 or Article 12. This means that the
reason based on which the prior right owner or any interested party may file an opposition in accordance with Article 30 as specified in the first half of Article 33 does not include other provisions concerning absolute reasons that may be contained in the contents "not in compliance with the relevant provisions of this Law" in Article 30. The explicit and sample-mode provision on absolute reason for opposition in Article 33 of the Trademark Law has already excluded the rights of the opponent to file an opposition based on other absolute reasons.
b. The above conclusion may also be made by way of historical interpretation.
The provision about opposition in the Trademark Law 2001 edition is in Article 30, namely "Any party may, within three months from the date of the publication, file an opposition against the trademark that has, after examination, been preliminarily approved." This means any party may raise an opposition by any relative or absolute reason.
Article 33 of the amended Trademark Law provides that "the prior right owner or any interested party" may file an opposition in accordance with Article 30 and "any party" may file an opposition in accordance with the provisions of Article 10, Article 11, or Article 12. The purpose of this revision is to confine the qualification of the opponent who files an opposition based on relative reasons and to confine the legal provisions cited by any party who files an opposition based on absolute reasons so that opposition in bad faith be constrained, trademark registration process be speeded up, and the private-right remedy nature of opposition system be returned in consideration of the monitoring role of social public over trademark examination.
Every revision of legal provisions is by no means just a revision of wording. It contains fundamental legislative attempt in itself. Therefore, restricted interpretation of Article 30 appearing in Article 33 of the Trademark Law shall be used from the point of view of historical interpretation method.
c. Trademark Laws of other countries have restrictions on the qualifications of opponents and reasons for oppositions.
Trademark Laws of other countries have strict restrictions on the qualifications of opponents and reasons for oppositions. The restrictions on opponent's reasons for opposition and qualifications of opponent specified in the Trademark Laws of other countries prove that opposition procedure are mainly used as private-right remedy
methods. Therefore, to make restricted interpretation of Article 30 appearing in Article 33 of the Trademark Law of China is in conformity with the major trend of international practice.
d. Under the circumstance of restricted interpretation of Article 30 of the Trademark Law in an opposition, how to explain the decision made by the Trademark Office not to approve the opposed trademark in accordance with Article 7 of the Trademark Law?
After the implementation of the amended Trademark Law, there is the circumstance that the Trademark Office makes decisions not to approve the registration of opposed trademarks in accordance with Article 7 of the Trademark Law, which provides that "any application or use of a trademark shall abide by principles of honesty and credit." Though Article 30 is also cited in its decision, the Trademark Office did not make judgment on similarity of trademarks and likelihood of goods in the decision. This means that the Trademark Office made the decision not to approve the registration of the opposed trademark by citing Article 7 under the right empowered to him to examine a trademark in accordance with any provisions in the Trademark Law. The Trademark Office also played a role of trademark examiner in the opposition procedure and therefore could make the decision not to approve the registration of the opposed trademark pursuant to Article 7.
Opposition procedure is an effective supplement to trademark examination of the Trademark Office, providing the Trademark Office with a chance of reexamination to remedy the omissions in the examination by the Trademark Office. As in the opposition procedure the Trademark Office also functions as a trademark examiner, the Trademark Office may apply Article 4 and Article 7 and so on to make a decision not to approve the registration of an opposed trademark. This is not in contradiction to the conclusion herein that restricted interpretation shall be given to Article 30 appearing in Article 33.
III. Suggestions on revising legal provisions concerning opposition in the Trademark Law
Hegel said that "the clearer a law is enacted, the easier to implement its provisions". This means that literal interpretation is the most explicit and straight forward in legal interpretation methods. Though Article 30 is a doubleedged sword in trademark examination and opposition, if Article 30 and its referencing provisions could be amended
to some extent, social public may use the most straight forward method of literal interpretation to correctly understand and apply the law. For this purpose, the authors hereby suggest that Article 30 and Article 33 be revised as follows:
Article 30 of the Trademark Law:
Where an application for registration of a trademark is not in compliance with the relevant provisions of this Law, the Trademark Office shall refuse the application and shall not publish the same.
Where an application for registration of a trademark is identical with or similar to a trademark of another party that has been registered or accepted in respect of identical or similar goods, the Trademark Office shall refuse the application and shall not publish the same.
Article 33 of the Trademark Law:
The prior right owner or any interested party may, within three months from the date of publication, files an opposition against an accepted and published application for registration of a trademark, if he finds that the application stands in violation of the provisions of Article 13, paragraph two or three, Article 15, paragraph one of Article 16, paragraph 2 of Article 30, Article 31 or Article 32 of this law, or any party finds that the application stands in violation with the provisions of Article 10, Article 11, or Article 12 of this law. If no opposition is filed within the specified period, the trademark shall be registered, a certificate of registration shall be issued, and the registration shall be published.
Article 30 of the Trademark Law is a double-edged sword in trademark examination and opposition procedure, which may not only save the limited resources of administrative examination of trademarks to raise the efficiency of trademark registrations, but also give play to social public in monitoring the examinations of the Trademark Office to protect social public interests.
Trademark Enforcement in China
Author: Bing Zhang and Lei Fu
Since the enactment of China's Trademark Law (2013 Amendment), protection of trademark rights has been further enhanced in the country. The amended trademark law has a stronger deterrence effect on acts which infringe on trademarks.
Trademark protection in China has specific Chinese characteristics, including the twin-track approach, which means that both administrative and judicial protection can be applied to trademark protection. It is clearly regulated in the trademark law that the trademark registrant could file litigation in court or file a complaint with the local Administration for Industry and Commerce (AIC) office when trademark infringement disputes arise. In view of the current IP protection environment, this twin-track protection system guarantees the efficiency of trademark protection as well as the fairness and justice of law. Through administrative protection, the infringing acts could be stopped as soon as possible and an administrative penalty would be imposed on the infringer. Through judicial protection, the trademark proprietor would have a chance to obtain sufficient compensation for the damage caused by the infringer's trademark infringement acts.
Trademark proprietors could choose either the administrative or judicial track to protect their registered trademarks while taking into consideration the details of the specific cases and the characteristics of administrative and judicial protection. The characteristics of the administrative and judicial protection are as follows:
1. Administrative protection has high efficiency as the raid action against the infringer can be arranged within a few days from the date of AIC's acceptance of the complaint led by the trademark proprietor;
2. It is cost effective. Conducting raid actions against trademark infringement is one of the functions and the power of the AIC as granted by laws and regulations.
Therefore, though raids against trademark infringement conducted by the AIC are based on the complaint led by the trademark proprietor, there will be no official fee for the raid action;
3. As regulated in the laws and regulations, the AIC could conduct on-site inspection of the place where the party concerned is suspected of engaging in activities which infringe upon the right to exclusively use a registered trademark of others and examine items relating to infringement;
4. The AIC could impose administrative punishment on the infringer. If the AIC handling the dispute determines that an infringement is constituted, it shall order immediate cessation of infringement, confiscate and destroy the infringing goods and the tools mainly used for manufacturing the infringing goods. If the amount of illegal business revenues reaches Rmb50,000 (US$7,730), the AIC may impose a fine of no more than five times of the illegal business revenues. If there is no illegal business revenue or the amount of illegal business revenues is less than Rmb50,000, a fine of no more than Rmb250,000 (US$38,660) could be imposed. If the trademark infringement has been committed twice or more within five years, a heavier punishment shall be imposed;
5. If the trademark infringement act is suspected of constituting crime, the AIC shall transfer the case to the judicial authority timely for infringer's criminal liabilities; and
6. The AIC could monitor and supervise the suspected infringer's business operation during routine market inspections. Thus, the infringer raided by the AIC is not likely to resume the trademark infringement acts.
1. Complicated trademark disputes, trademark infringement caused due to similarity of trademarks and controversial cases could be solved in judicial way;
2. The court could rule that the infringer bears civil liabilities including stopping the infringement, eliminating negative influence, compensating for losses, etc;
3. The amount of damages for trademark infringement shall be determined according to the actual losses suffered by the trademark proprietor. When it is difficult to determine the actual losses, the amount of damages may be determined according to the profits acquired by the infringer. When it is difficult to determine the trademark proprietor's losses or the profits acquired by the infringer, the amount of damages may be a reasonable multiple of the royalties. When it is dif cult to determine the actual losses of the trademark proprietor, the pro ts acquired by the infringer, or the royalties of the registered trademark, a people's court may award damages of no more than Rmb3 million (US$464,000) according to the circumstances of the infringement;
4. The trademark proprietor could le an application for pre-action behavior preservation, property preservation or evidence preservation in order to stop the infringement timely and to keep the property that could be enforced;
5. A supporting judgment will have positive influence on different law enforcement authorities for trademark proprietor's future trademark protection activities through different channels;
6. The trademark proprietor could, in accordance with the judgment, file application for compulsory enforcement if the infringer refuses to pay the compensation.
Through judicial protection, a trademark proprietor could have a chance to obtain sufficient compensation, and the risk for infringers to conduct trademark infringement is increased. Moreover, judicial protection attracts more attentions from news media so that it could have a strong
warning and deterrent effect on the infringers. At present, more and more foreign trademark proprietors are intended to protect their trademarks through the judicial route. We would like to briefly introduce the relevant issues involved in trademark infringement litigation, including jurisdiction, evidence collecting, preservation, trial time limit, execution of the judgment, the recognition of well-known trademarks and requirements for the power of attorney.
The first instance of trademark infringement cases is generally handled by a basic people's court. One exception is that the first instance of "major foreign-related" intellectual property related cases is handled by an intermediate people's court. The term "major foreign-related cases" refers to cases involving a large amount of subject, cases with complicated circumstances, cases where one side consists of a large number of parties, and other cases having a major impact. Litigation initiated against trademark infringement shall be under the jurisdiction of the people's court at the place where the infringement act occurs or at the domicile of the defendant. The "place where the infringement act occurs" includes the place where the infringing act is committed and the place where the result of the infringement occurs. For online infringement acts, the "place where the infringement is committed" shall include the place where the computer and equipment used to commit the alleged infringement are located. In online infringement cases, the "place where the result of the infringement occurs" shall include the domicile of the right owner. In practice, to avoid any possible negative influence of initiating litigation at the defendant's domicile and to change the jurisdiction of court, the purchase of the infringing products would be conducted at large cities other than the defendant's domicile.
The plaintiff has the burden to provide evidence for its claims; otherwise it shall bear the legal consequences for
lack of evidence. The time limit for providing evidence in the first instance will be no less than 15 days. If more time is required, an application may be led with the people's court. The people's court will not accept evidence provided by a party beyond the time limit due to gross negligence. The exception to this is that if the evidence is related to the basic facts of the case, it shall be deemed admissible by the court, but the court can impose an admonition or a fine on the party. For evidence that is unable to be collected by a party for objective reasons, the party can apply in written to the court for investigation and collection before the expiration of the time limit.
The plaintiff could file an application for preservation before initiating the trademark infringement litigation. The applicant shall provide security and the amount of security shall equal to the amount of property relating to the preservation. After accepting the application, the people's court must issue a ruling within 48 hours, and if it rules to take a preservative measure, the measure shall be executed immediately. If the applicant fails to initiate litigation or apply for arbitration in accordance with the law within 30 days after the people's court takes a preservative measure, the court shall remove preservation. The preservative measure could stop the infringement acts without delay, but the plaintiff shall bear the risk that if the application for preservation is initiated improperly, the plaintiff shall compensate for the damages caused. Therefore, before filing the application for preservation, it is necessary to have an assessment on the specific case. If the chance of success is not high, the application for preservation shall be taken with prudence.
The people's court shall complete the trial of a case in first instance within six months after the case is docketed. If the party is not satisfied with the judgment of the first instance, it shall file an appeal within 15 days upon receipt of the judgment. For foreign-related trademark infringement litigation, the party could file the appeal within 30 days upon receipt of the judgment. In the meantime, there is no specific regulated trial time limit for a foreign-related trademark infringement case; therefore we can only estimate the trial time based on the above mentioned trial time.
The judgment shall be enforced by the people's court of first instance or the same level people's court at the place where the property under enforcement is located. The period for applying for enforcement shall be two years. The plaintiff and defendant could discuss and reach settlement
during the enforcement. If the party subject to enforcement fails to perform the obligation determined in the judgment, the people's court shall impose punishment on the party and add the party into the list of dishonest parties subject to enforcement. If through investigations it is found out that the party does not have any property for enforcement, the people's court could render a ruling to terminate this enforcement procedure. Once the applicant for enforcement finds that the party subject to enforcement has any property for enforcement, the applicant may reapply for enforcement. The new application shall not be restricted by the time limit for applying for enforcement.
In some cases, the trademark proprietor requests the people's court to recognize its trademark as a well-known trademark in China in order to broaden the protection scope of the relevant trademark. Documents shall be submitted to people's court to prove that its trademark is already famous at the time of occurrence of the trademark infringement or unfair competition. The documents shall include the market share, marketing regions, profits, taxes of the goods bearing the trademark; the duration of the continuous use of the trademark; the manner, duration, extent, money input, and geographical scope of publicity or promotion of the trademark; the records that the trademark has ever been protected as a famous trademark; the market reputation of the trademark and other related factors that could prove the famous status of the trademark.
When a foreign entity entrusts a Chinese agent to proceed with the trademark infringement litigation, the power of attorney shall be legalized by a notary office in its home country and authenticated by the Chinese embassy or consulate stationed in that country. If the representative of a foreign entity signs a power of attorney to retain an agent to initiate a civil action as witnessed by the judge of the people's court, the court shall recognize the power of attorney. If the representative of a foreign entity signs a power of attorney within the territory of China to retain an agent to initiate a civil action, and the power of attorney has been legalized by a notary office in China, the people's court shall also recognize it. However, the representative of the foreign entity shall file to the people's court the certification proving that he has the right to represent the said foreign entity to participate in the litigation, and the certification shall be legalized by a notary office in its home country and authenticated by the Chinese embassy or consulate stationed in that country.
Do new patent infringement trial rules really benefit design protection in China?
Author: Xiaojun Guo
On March 21, 2016, China's Supreme People's Court issued the Interpretation on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Cases (II) (hereinafter referred to as "the Judicial Interpretation (II)"), which has come into force as of April 1, 2016. The Judicial Interpretation (II) is being implemented in an environment where patent infringements continue growing quickly, and many legal issues in patent disputes touch on the kernel of the patent system which shows significant influence on economic development and innovations. The enactment of the Judicial Interpretation (II) is a response to the above status quo and aims at enhancing patent protection in China.
The Judicial Interpretation (II) clarifies several pending legal issues regarding design patent infringement, including the "degree of design freedom," construction of the protection scope of a patent for designs of products in set, of a patent for design of a complicated product and of a patent for a design with variant states. Although the Supreme People's Court, when issuing the Judicial Interpretation (II), made an announcement that it would enhance patent protection in China and would balance the interests of rights owners and
the public, we are reluctant to say that these aims may not be fully-justified by the Judicial Interpretation (II).
Degree of Design Freedom
Article 14 of the Judicial Interpretation (II) reads: "When determining the level of knowledge and discriminability of an ordinary consumer to a design, the people's court shall normally consider the design space of the products in the same or similar category as the patented design at the time of infringement. Where the design space is relatively large, the people's court may determine that it is usually unlikely for an ordinary consumer to notice the minor differences between the compared designs; where the design space is relatively small, the people's court may determine that it is usually more likely for an ordinary consumer to notice the minor differences between two compared designs."
According to Article 8 and Article 11 of the Interpretation on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Cases (I) (hereinafter Judicial Interpretation (I)), the people's court shall take the "overall visual observation and comprehensive judgment" to decide whether the accused design is identical with or similar to
the design patent and therefore infringes the design patent. Pure functional features, materials and internal constructions of the products shall not be considered. Design features that are easily observed in normal use of the products and design features that differ the design patent from prior designs normally weigh more in assessment of infringement.
Article 10 of the Judicial Interpretation (I) further provides that, the subject in deciding whether one design is identical with or similar to the design patent is the ordinary consumer, who is an imaginary man with a level of knowledge and discriminability between the designer and the actual consumers of the product. Under the "overall visual observation and comprehensive judgment" test, the assessment of similarity between the compared designs requires a consideration of the overall visual impression they each create.
In such assessment, it is normally necessary for the court to divide the patented design into discrete features and assess against the prior designs, giving greater protection to features where there is a limited degree of design freedom. The court will identify the similarities and differences for each feature and attach a weight to each of them while excluding the influence of the pure functional features, materials and internal constructions, etc. The court will then consider all of the features together and assess whether the accused design produces a different overall visual impression from the patented design.
Said design space or degree of design freedom essentially introduces, in deciding design patent infringement, a threeway comparison among the patented design, the accused design and the prior designs. But it shall be noted that the design space is used in the assessment of the design features instead of the assessment of the overall visual impression in Chinese design practices.
By taking into consideration of the design space or degree of design freedom, a more appropriate protection may be imparted to a design patent. The Supreme People's Court introduced the "design space" as one factor in determining the level of knowledge and discriminability of an ordinary consumer to a design in the Wanfeng motorcycle wheel case (Xing-Ti-zi No. 5/2010) in 2010. In this case, the Supreme People's Court articulated that there is less degree of design freedom for products with developed designs; a minute change of the designs may produce a profound impression on the ordinary consumer. On the
other hand, there is a higher degree of design freedom for new products; the format and style may be diverse, and a minute change will normally not attract the attention of the ordinary consumer. So, for a very new product, generally, a broader protection shall be imparted to it as compared to a traditional product in the context of design patent protection.
This article also provides that the timing for defining the design space is the time of committing the design patent infringement.
Designs of Products in Set
Article 15 of the Judicial Interpretation (II) reads: "For a patent for designs of products in set, where the accused design is identical with or similar to one of the designs, the people's court shall determine that the accused design falls within the protection scope of the patent."
According to Article 31 of the Chinese patent law, an application for a patent for design shall be limited to one design, two or more similar designs for the same product, or two or more designs which are incorporated in products belonging to the same class and being sold or used in set; each of these may be filed as one application. Said products belonging to the same class and being sold or used in set are usually referred as "products in set."
Article 15 of the Judicial Interpretation (II) simply affirms the current practice regarding the construction of the protection scope of a patent right for designs of products in set, which essentially defines a bundle of rights that are independent from each other. Just because one of the designs of the products in set is invalid doesn't mean that others are invalid; the patentee can sue an infringer on the basis of any one of the designs.
Surprisingly, the Judicial Interpretation (II) doesn't mention the multiple design patent which includes two or more similar designs for the same product. Possibly, the Supreme People's Court takes it as self-evident that the designs in this type of multiple design patent are also independent from each other.
Design of a Complicated Product
Article 16 of the Judicial Interpretation (II) reads: "For a design patent of a complicated product with a unique assembly relation among the individual components, where the accused design is identical with or similar to the design
of the complicated product in its assembled sate, the people's court shall determine that the accused design falls within the protection scope of the patent.
"For a design patent of a complicated product with no assembly relation or with no unique assembly relation among the individual components, where the accused design is identical with or similar to the designs of all the individual components of the complicated product, the people's court shall determine that the accused design falls within the protection scope of the patent; where the accused design lacks the design of one individual component of the complicated product or is neither identical with nor similar to the design of one individual component, the people's court shall determine that the accused design doesn't fall within the protection scope of the patent."
As regards the design of a complicated product, the Supreme People's Court defines two scenarios here: 1) design of a complicated product with unique assembly relation among the individual components; and 2) design of a complicated product with no assembly relation or with no unique assembly relation among the individual components. In whichever scenario, only one single right can be obtained.
An example of a complicated product with unique assembly relation is an electric iron consisting of an iron body and an iron base. The court considers that the value of the design of this type of product lies in its assembled state and therefore only the assembled state of the product shall be protected. In other words, it is possible that a person who misappropriates the design of one component of the product would not be accused of design patent infringement.
Meanwhile, for a complicated product with no assembly relation or with no unique assembly relation among its individual components, such as a chess set, building blocks or poker, the court considers that the value of the design lies in the overall designs of the individual components; since there is no assembled state or the assembled state is uncertain, protection of the design shall be centered on each of the components. So, only when the design of each component of the accused product is found to be identical with or similar to a design of a component of the design patent can infringement be established. Article 16 requires a one-to-one identity or similarity between the corresponding components of products incorporating the compared
The above provisions seem contrary to the protection of innovations of designers.
First, if an applicant files separate design applications for the individual components of a complicated product with or without unique assembly relation, can the applicant obtain effective patents? The answer is yes. Actually, when a design of a component is filed in a design application, the component is taken as a separate product. It is obviously not rational to deny protection of the designs of the components of a complicated product when they are collectively filed in one design application.
Second, it has been commonly acknowledged that a design patent right imparts protection to a design other than the product incorporating the design, though the category of the product might affect the protection scope of the design patent. It seems as if the Supreme People's Court forgot this and equates products with designs.
Design of a Product with Variant States
Article 17 of the Judicial Interpretation (II) reads: "For a patent for design of a product with variant states, where the accused design is identical with or similar to the patented design in all its use states as shown in the relevant views, the people's court shall determine that the accused design falls within the protection scope of the patent; where the accused design lacks or is neither identical with nor similar to the design in at least one of its use states, the people's court shall determine that the accused design doesn't fall within the protection scope of the patent."
An example of the type of product with variant use state might be foldable strollers. According to the provision of this article, should the design patent cover a foldable stroller and illustrate the variant use states of the foldable stroller while the accused stroller is not foldable, the latter might not be infringing. This is weird and obviously doesn't conform to the purpose of encouraging innovation.
The Judicial Interpretation (II) is a law which all levels of courts shall comply with. Any person who is seeking design patent protection in China shall keep the above provisions in mind so as to find an effective way of proceeding.
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