In August 2014 the Zhejiang High People’s Court published the second instance decision in the case between Dsquared2 TM SA and Bier Bulasi Ltd. The decisions states that Dsquared2 TM SA, a company established and owned by Dean and Dan Catens, shall cease the infringement upon the trademark DSQUARED No. 3849642 owned by Bier Bulasi Ltd.

In April 2014, while the judges were drafting the decision, DSQUARED2 was celebrated as the special guest of the most important fashion event in China, the Shanghai Fashion Week.

Please click on view original to view the image.

In the jungle of the trademark system in China, where IP owners fight for survival against squatters and counterfeiters, such a decision would not be surprising, if not for the fact that it totally overturnsthe first instance decision which had -on the contrary- declared that Dsquared2 TM SA did not infringe upon Bier Bulasi’s trade mark.

The trademark No. 3849642 (TM ‘642 - see herein) was filed with Chinese Trade Mark Office on 2003-12-17 by an individual named Zhao Ban Hua and registered on 2007-02-14. The mark was subject to several assignments until it reached Zhejiang Nuohe Garment Co. Ltd. (“Nuohe”). Bier Bulasi Ltd. was the owner of TM ‘642 at the time of filing the case. Opposition, non-use cancellation and bad faith cancellation, filed by Dsquared2 TM SA against TM ‘642,at the current stage have not succeeded in eliminating the trademark from the register. 

Nuohe is not apart from dark shadows. Beside the suspect DSQUARED line of business, Nuohe has interests in distribution of other fashion brands, suchas ICE ICEBERG and CNC. Once again, the distribution apparently is not authorizedby the internationally reputed owners,and shielded by dubious trademarks adjudications.

Reading the first instance decision, it results that the trademark ‘642 was not used before 2011 and since then it was used by Nuohe in the exact form of the trademark owned by Dsquared2 TM SA (same logotype). Beside using the same logotype as the trademark registered abroad by Dsquared2 TM SA, Nuohe also uses several elements which are characteristic and link to Dsquared2 TM SA:the twin designers names, the year in which they were born “1964”, the Canadian flag,the label position of the front zip puller cover and the entire store decoration. 

Please click on view original to view the images.

Dean and Dan Caten and DSQUARED2 TM SA

In 1964 Dean and Dan Catens, twin brothers, were born in Canada. In early ‘80s they moved to New York where they studied and initiated their career in the fashion industry. In 1991 they moved to Europe, first in Italy and later in UK, for better developing their new brand D2 DSQUARED2. And indeed they succeeded: in 1994 they launched the first DSQUARED2 collection in Milan which soon became famous. D2 DSQUARED2 is nowadays present in many countries of the world and loved by many stars, such Lenny Kravitz, Justin Timberlake, Ricky Martin, Nelly Furtado, and –last but not least - Robbie Williams.

The trademark D2 DSQUARED2 was first filed in China in 2004-03-19 via Madrid with the number 3968186 (TM ‘186). Such application was rejected for all goods of class 25, except for raincoats due to the prior presence of TM ‘642. The trademarks D2, D2 DSQUARED2, DSQUARED2 are filed and registered in many classes (such as 3, 9, 18, 25, 35, etc.) in China and many other countries of the world.

Background of the case

In the late 2011, Bier Bulasi Ltd. sent several warning letters to store selling DSQUARED2 goods originated from the Italian DSQUARED2 requiring them stop using the trademarkin China.

In early 2012, as reaction to the warning letter sent to retailer, Dsquared2 TM SA, launched a civil litigation against Bier Bulasi Ltd. with the Hangzhou Intermediate People’s Court seeking a declaration of non-infringement. Moreover, Dsquared2 TM SA initiated a second litigation seeking for recognition of unfair competition because of the use of several elements which copy the identity and reputation of DSQUARED2 TM SA (the name of designers, the Canadian flag, the year 1964, the decoration of the stores, the position of the label on the front zip of jeans, etc.).

The first instance decision

The Court recognized that from visual perspective Click here to view image is similar to Bier Bulasi’s registered trademark Click here to view image. They share the same letters in the same order and that is enough. Anyway, the Court concluded that there is no risk of confusion and therefore infringement in the in the light of the following considerations:

  • Bier Bulasi’s“Click here to view image” consists of letters with special font. There is difference of overall visual effect between the two trademarks.
  • The basic function of a trademark is to distinguish products or services from different sources. Bier Bulasi’s didn't use their trademark as exactly registered, Bier Bulasi is acting to create confusion with others.
  • Dsquared2 TM S.A. used “DSQUARED2” in China since 2004 and didn’t have the intention to seek association to Bier Bulasi’s trademark.

Unfortunately the Court did not accept the claim based on unfair competition based on the reasoning that the (copied) elements are not particular name/shape of famous goods (art. 5.2 Anti-Unfair Competition Law) since they do not reach and pass the minimum reputation threshold to be protected as not registered distinctive elements. 

The second instance decision

The appeal court agreed that from visual perspective there is similarity between the two signs and concluded that there is risk of confusion and infringement for the following reasons:

  • "DSQUARED" is not a regular English word, but a creation. Therefore Bier Bulasi’s trademark enjoys high distinctiveness.
  • Although there is some difference in the logotype,the overall impression is that the two trademarks are similar.
  • The court holds no matter how a registered trademark is actually used in the market, the exclusive right grants the owner to right to exclude others from using the registered trademark on the approved goods.

Our comment:

  • The trademark DSQUARED should have been adjudicated to Dsquared2 TM SA which had created, launched, used and made it famous first abroad and then in China. The TM ‘642 should have been cancelled.
  • The Zhejiang High P. Court has not recognized relevance to the fact that in 2003 - date of filing the mark DSQUARED ‘642 - was already famous,even if predominantly outside of China. By allowing a company securing the right only in China, the trademark law allowsunjust separation and creates a monopoly wrongly allocated.
  • The Zhejiang High P. Court has not recognized relevance to bad faith in using the mark as the first instance judge and to the fact that the risk of confusion is mainly caused by imitation of several elements perpetuated by the prior registrant.