Introduction

On 30 July 2018 the Supreme People's Court confirmed the Trademark Review and Adjudication Board's (TRAB's) decision to invalidate the pre-emptive registration of the trademark  美图秀秀 MEITUXIUXIU in Class 3. The court's verdict has put an end to the invalidation proceedings instituted by Xiamen Meitu Technology Co, Ltd against the disputed trademark and confirmed the well-known status of the cited trademark  美图秀秀 in Class 9.

Facts

On 24 July 2015 Meitu filed an invalidation request with the TRAB against Bei Rongxiong's trademark  美图秀秀 MEITUXIUXIU, which was registered in Class 3 (application date: 19 April 2013; registration date: 28 September 2014), citing its prior trademark  美图秀秀 , which was registered in Class 9 (application date: 8 December 2008; registration date: 14 October 2010). The cited trademark needed to be recognised as well known in order for Meitu's request to succeed.

TRAB decision

On 1 August 2016 the TRAB ruled in Meitu's favour, finding that:

  • the cited trademark had obtained well-known status in respect of Class 9; and
  • the disputed trademark was identical to the cited trademark and thus violated Article 13.3 of the Trademark Law.

Court decisions

On 24 January 2017 the Beijing IP Court confirmed the TRAB's decision. Subsequently, on 25 September 2017 the Beijing High Court upheld the TRAB's decision.

The High Court elaborated on why the cited trademark was well known. In particular, it specified that although Meitu had earned a low net profit between 2010 and 2013, such indicator was only one of the parameters that should be used to assess public awareness of the cited trademark and its reputation. In addition, the courts should consider:

  • the public awareness and distinctiveness of the mark with regard to the designated goods; and
  • the fact that software development and marketing expenses may outweigh short-term yields in the internet industry.

The appeal court was satisfied that through extensive and continuous promotion and use, the cited trademark had become well known prior to the disputed trademark's application date.

The Supreme People's Court also affirmed the well-known status of the cited trademark. It found that the term  美图秀秀  is intrinsically distinctive; therefore, if the two trademarks were to coexist in the market, this would likely mislead consumers.

Further, the Supreme People's Court held that trademarks relating to the internet industry cannot be compared with those which relate to traditional industries. The profit and loss of an enterprise at a certain stage may serve only as a point of reference in recognition of a well-known trademark. As such, the courts should consider a trademark owner's industry background, business model and causes for deficit when assessing the mark's well-known status. A deficit caused by substantial investment in order to gain a market share in the internet industry does not equate to a deficit caused by outdated technology, insufficient productivity or poor management in traditional industries.

For further information on this topic please contact Li Jie or Zhang Han at Wanhuida Peksung by telephone (+86 10 6892 1000) or email (lijie@wanhuida.com or zhanghan@wanhuida.com). The Wanhuida Peksung website can be accessed at www.wanhuida.com and www.peksung.com.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.