The China Supreme People’s Court’s 2017 Regulations are expected to bring a more flexible and comprehensive approach when assessing whether there is a conflict between two trade marks, yet their implementation by the Chinese courts has proven to be slow.

The Beijing Intellectual Property Court has recently handed down its judgment [1] on the appeal filed by Sichuan Airlines against the Trade Marks Review & Adjudication Board’s decision to refuse the application to register the airline’s logo , which prominently features a flying bird.

On 18 April 2016, Sichuan Airlines filed its trade mark application for technical research, quality assessment, computer programming etc. in Class 42. When the China Trade Mark Office examined the airline’s application, it found that the logo was similar to the three earlier marks , and

, which all comprise silhouettes of birds together with some wavy and horizontal lines, and designate services in Class 42. Consequently, the China Trade Marks Office raised an objection to the airline’s trade mark in accordance with Article 30 of the China Trade Marks Law on the ground that it was similar to the 3 prior marks.

In the China Trade Marks Law, the term ‘likelihood of confusion’ appears in Articles 13.2 (protection of unregistered well-known trade mark) and 57.2 (trade mark infringement) but no reference is made to ‘confusion’ in Article 30.

Article 30 simply provides that trade marks, which are identical or similar to a prior trade mark, and designate identical or similar goods to those of such prior trade mark, may not be registered. In absence of specific provisions on the likelihood of confusion, the China Trade Marks Office, in practice, usually bases its findings on two criteria only: (1) the similarity between the marks, and (2) the similarity between the goods and services. If there is no similarity between trade marks or goods and services, the China Trade Marks Office would have no objection to the registration of the mark.

The Judicial Committee of the China Supreme People’s Court has issued a set of new ‘Regulations on Several Issues Concerning the Trial of Administrative Cases Involving the Granting and Confirmation of Trademark Rights’ (‘2017 Regulations’), which became effective on 1 March 2017. These new regulations include the Supreme People’s Court’s guidance on how to assess the ‘likelihood of confusion’ under Article 13.2 of the China Trade Marks Law in administrative lawsuits.

The courts should assess not only the degree of similarity of the trade marks and the goods and services, but also the degree of distinctiveness and reputation of the trade mark requesting protection, the degree of attention of the relevant public and other pertinent factors. For example, the Supreme People’s Court has highlighted that other factors include taking into consideration the intention of the trade mark applicant and evidence of incidents of actual confusion.

Although this provision of the 2017 Regulations does not specifically mention Article 30 of the China Trade Marks Law, where likelihood of confusion is not even mentioned, the Supreme People’s Court made it clear that the method defined for Article 13.2 should also apply to Article 30.

In the course of the lawsuit, Sichuan Airlines argued that its trade mark can be distinguished from the prior marks due to its different graphical features, and it had applied to register its logo in other classes where the China Trade Marks Office did not raise objections against the logo. For the sake of consistency, the China Trade Marks Office should have applied the same examination criteria and approved its logo in Class 42.

Sichuan Airlines further argued that it has had a history of using its trade mark for more than 30 years and submitted evidence of use to the Court to support this claim including materials which showed its logo applied on the airline’s aircrafts. The airline stressed that due to the nature of its services, consumers would pay more attention when choosing a brand compared to other categories of fast-moving goods. Therefore, there should be no risk of confusion, if the logo was registered as a trade mark.

In its decision, the Court acknowledged that Sichuan Airline’s logo and the three cited marks contained bird graphics and wavy or horizontal line patterns, but noted that some details of the marks were indeed different. Nevertheless, the Court held that there was no obvious and definite difference between the design elements, the style, the bird’s silhouettes and the meaning of the applied-for mark and the cited marks. In the absence of any verbal features, the airline’s mark could not be distinguished verbally from the prior marks and the public would mistakenly believe that the applied-for mark and each cited mark constitute a series of marks or associated marks.

While the Court noted that the airline had applied its logo to aircrafts, it found that not all use qualified as trade mark use or in relation to the services relevant in this case.

Under these circumstances, the Court decided to dismiss the airline’s lawsuit and maintain the refusal of the mark.

The decision of the Beijing IP Court shows that the Court has not followed the Supreme People’s Court’s guidelines and omitted to give weight to certain details of the case in accordance with those guidelines. If the Plaintiff appeals the IP Court’s judgment, it is hoped that the judges of the appeal instance will adopt a more comprehensive approach when they examine Sichuan Airline’s trade mark. Since the three prior marks, which all include evidently similar images of birds, peacefully co-exist, it is difficult to comprehend that Sichuan Airline’s logo should not be acceptable for registration as a trade mark in China.

While the present verdict does not serve as a model decision for the implementation of the Supreme People’s Court’s guidelines, trade mark practitioners and their clients, who are looking to register their marks in China, have welcomed these new standards as a progressive move in the development of the Chinese trade mark law.