Can the use of a trademark on certain designated goods maintain the registration of the trademark on similar goods? How to define “similar goods” in non-use cancellation actions?

These two questions are the essential points in many non-use cancellation actions. In the recent adjudication made by the Supreme People’s Court No. (2017) Zui Gao Fa Xing Shen No. 8597, the Court provides clear guidelines for these two questions.

The case is between our client “Sunpower Corporation” and a local company. In 2014, Sunpower Corporation filed a partial non-use cancellation against the trademark registration No. 3476490 “maxon” on “batteries, battery chargers and chargers”.

During the examination, the registrant submitted only evidence of use on “cellphones”. No any qualified evidence of use of the trademark on “batteries, chargers” was submitted. Therefore, the non-use cancellation request was supported by the Trademark Review and Adjudication Board.

Not satisfied with the decision, the registrant filed an appeal at Beijing IP Court. After the first instance examination, Beijing IP Court made the adjudication that “cellphones” and “batteries” are “similar” goods, therefore, the use of the trademark on “cellphones” can be regarded as the use on “batteries”.

This decision is not acceptable to Sunpower Corporation. So Sunpower Corporation lodged the appeal of second instance examination before Beijing High People’s Court on the grounds (1) “cellphones” and “batteries” are not similar goods according to the Nice Similar Goods/Services Classification as adopted by the China Trademark Office; (2) “cellphones” and “batteries” are not similar goods in terms of functions, usages, target consumers and marketing channels. Sunpower Corporation argued that the use of the trademark on “cellphones” could not maintain the registration of the trademark on “batteries”.

The Court accepted the arguments of the Sunpower Corporation and held that in non-use cancellation cases, the examination of “similarities of goods/services” should follow the Similar Goods/Services Classification strictly due to the nature of such cases. The valid evidence of use of a trademark on certain designated goods can only prove the use of the mark on goods which are also designated by the trademark and fall into the same sub-class. In non-use cancellation cases, not like opposition or invalidation actions, the judgement on the similarities of goods should be based on the Nice Similar Goods/Services Classification as adopted by the China Trademark Office.

Not satisfied with the decision made by Beijing High People’s Court, the adverse party filed an application for re-examination before the Supreme People’s Court. After examining the evidences of use as filed, the Court is of the opinion that even though “batteries, chargers” are necessary parts of a cellphone, they are independent commodities which have independent functions. The use of the trademark on cellphones cannot be extended to “batteries, chargers”. In sum, the decisions made by Beijing High People’s Court is correct.

This adjudication provides a clear and definite guideline for non-use cancellation actions of similar natures and factors. Owners of registered trademarks shall always follow the gist of the case to keep their registered trademark valid.