I. Key Issues
- Coexistence agreement becomes more and more acceptable in China practice.
- Even if there is a coexistence agreement, the key criteria is whether registration of a mark will have prejudice effect to the public’s interest.
II. Typical Cases
- A Logo
Avago Technologies General IP (Singapore) Pte. Ltd. (hereinafter referred to as “Avago”), successfully obtained registration for its core trademark (A Logo) (Registration No. 5226289, red color designated) in China in January 2010.
The application for registration of the A Logo is filed in the name of Argos Acquisition Pte. Ltd. (hereinafter referred to as “Argos”) in 2006 (the A Logo was later assigned to Avago in 2009). In 2008, the A Logo was rejected by the Chinese Trademark Office (CTMO) on the ground that it shall be deemed similar to the prior registered trademark (International Registration No. 789052) in terms of similar goods. Avago filed a rejection appeal before the TRAB.
In the appeal, Avago argued that the two marks are dissimilar in overall appearance. More importantly, Avago submitted a certified and legalized copy of coexistence agreement entered by Argos and Areva Societe Anonyme A Directoire Et Conseil De Surveillance (hereinafter referred to as “Areva”). In the agreement, Areva agreed that Argos, including the assignees of its trademark right, registers and uses the A Logo and marks including A Logo in semi-conductors, etc. and Areva will not oppose registration or use of the A Logo.
In January 2010, the Trademark Review and Adjudication Board (TRAB) supporting Avago’s arguments and the evidence Avago submitted. The TRAB holds the view that there exists no conflict of rights because Areva and Argos had entered into a coexistence agreement and the agreement was legalized and certified. Moreover, the TRAB supported that the marks are different in design and could be differentiated in overall appearance. Finally, Avago obtained registration for the A Logo.
The trademark UGG (No. 6379162) was rejected by the CTMO due to the prior similar mark UCG (International Registration No. 951748). The applicant Deckers Outdoor Corporation (hereinafter referred to as “Deckers”) appealed with the TRAB and further appealed with Beijing First Intermediate Court (the first instance court). In the court appeal, Deckers submitted the legalized and certified copy of the consent letter executed by the owner of the prior mark UCG (International Registration No. 951748). The first instance court held that the consent letter did not rule out the likelihood of confusion among the relevant public consumers, therefore, the trademark shall not be registered.
However, Beijing High Court (the second instance court) held a different view from the first instance court. The second instance court held that the legalized and certified coexistence agreement shall be taken into consideration when deciding the likelihood of confusion, and there was no evidence that the coexistence agreement will prejudice public interests. In addition, the second instance court also took into consideration that the trademark UGG in Class 25 was recognized as a well-known trademark by the CTMO.
- Molecular Designed Trademark
The CTMO rejected the application for registration of the design trademark (Application No. 7358249) filed by Scino Pharm Taiwan, Ltd.’s mark. Scino Pharm Taiwan, Ltd. appealed with the TRAB and subsequently went through two instances of court appeals.
Beijing High Court as the second instance court took into consideration of the legalized and certified coexistence agreement. However, it also held that the design consists of molecular structure which is generic in the field of chemical industry. Molecular structure constitutes publicly-owned resources. Therefore, the registration of the design will lead to monopoly of public resources and prejudice to the public interests. Therefore, the design trademark shall not be registered.
4. RAGE with Design
Trademark Application Cited Prior Trademark
The RAGE with Design mark (Application No. 8533178) was rejected by the CTMO due to the prior mark RAGE (Registration No. 6100838). The applicant ID Software LLC (hereinafter referred to as “ID Software”), appealed through Beijing High Court.
In the appeals, ID Software submitted a co-existence agreement. However, the courts held that registration of the RAGE with Design mark will likely cause confusion among the relevant public. Thus, registration of the RAGE with Design mark was not approved
III. Analysis and Comments
- Laws and Regulations
Article 30 of the Chinese Trademark Law 2013 states that where a trademark registration is not in conformity with the relevant provisions of this Law, or is identical with or similar to the trademark of another person that has, in respect of the same or similar goods, been registered or, after examination, preliminarily approved, the CTMO shall reject the application and shall not publish the said trademark.
Rule 8 of Rules of the Trademark Review and Adjudication stipulates that during the review and adjudication, an interested party shall have the right to dispose of, according to law, his trademark right and the right relating to trademark review and adjudication. Provided that public interests and a third party’s rights will not result in prejudice, and interested parties may reach an amicable settlement agreement in writing by themselves or by mediation. The TRAB may close a case or render a decision provided an amicable settlement agreement is reached by interested parties.
- Whether the coexistence agreement shall be considered and the roles it plays when deciding registrability of the trademarks
In the event that the marks are highly similar and a consent letter is executed by the owner of the prior mark or a coexistence agreement is reached, the consent letter or coexistence agreement shall be taken into consideration when deciding the registrability of the mark. The reasons and the roles the agreement plays are as follows:
First, the purposes and principle for Article 30 of the Chinese Trademark Law 2013 are 1) to protect private interests of owners of the prior registrations/applications to avoid conflicts of trademark rights; and 2) to protect public interests, i.e. to avoid confusion among the relevant consumers or to avoid other prejudice to the public interest such as monopoly of the public resources.
Second, from the perspective of avoiding conflicts of trademark rights, trademark right as a private right may be disposed of according to the will of owners of trademark registrations/applications. A coexistence agreement reached by interested parties through friendly negotiation reflects that the owners of the prior registrations/applications agree to the registration and use of a similar trademark in connection with identical or similar goods or services. The coexistence agreement also indicates that both parties will not free ride and the parties have good faith to differentiate from each other when using the marks. In this case, the coexistence agreement shall be taken into consideration because it eliminates conflicts of trademark rights between former and latter registrations/applications. Otherwise, it will be unreasonable.
In the above cases of A Logo, UGG, and the Design, the TRAB and the courts considered coexistence agreement reached by the interested parties. For example, the TRAB held that considering the coexistence agreement for the A Logo was reached, and the agreement was certified and legalized, the applicant of the A Logo and owner of the cited trademark do not have conflict in their rights.
Third, protecting the public interests is another purpose and principle for Article 30 of the Chinese Trademark Law 2013. When deciding registrability of the marks, it shall also consider whether any confusion among the relevant public is likely to be caused, or whether registration of the trademarks will bring other prejudice to the public interest such as monopoly of the public resources. Accordingly, the factors to be considered are as follows: 1) similarity between the goods/services of the trademarks, similarity between the trademarks; and 2) fame of the trademarks.
In its decision for the mark UGG, Beijing High Court decided that two marks are highly similar. However, it further explained that “the possibility of confusion among the relevant public is a presumption made by trademark authorization administrative organs or the people’s courts from the perspective of the relevant public. However, a coexistence agreement is concluded by directly-interested parties. The judgment for these parities corresponds more to the actual market. Thus, the consent letter is a powerful evidence to rule out the possibility of confusion unless there are other obvious factors indicating that likelihood of confusion probably exists.”
Moreover, Beijing High Court also considered the fact that mark UGG was once recognized as a well-known trademark by the CTMO in trademark administrative cases.
In the case of the design trademark, although a certified and legalized coexistence agreement was submitted, the court held that the molecular structure is public resource. Registration of the trademark will damage interests of the public and monopolize public resources. Thus, the design trademark shall not be registered.
Forth, obtaining a coexistence agreement does not guarantee overcome of rejection by the CTMO / the TRAB. In the event that the trademarks are identical and the designated goods/services are also the same, even if a coexistence agreement is reached, the TRAB or courts will presume there exists a possibility of confusion, thus it will not accept the coexistence agreement. Accordingly, the mark will not be granted registration.
In summary, coexistence agreement becomes more and more acceptable in China practice. It is a powerful evidence to overcome conflicts of private rights. But obtaining a coexistence agreement does not guarantee registration of the mark because public interest can be another decisive factor.
- Legal requirements for a coexistence agreement to be accepted for registration of a trademark
- Format: certified and legalized. To be considered, a certified and legalized copy of the coexistence agreement is required.
- Contents: In contents, it shall include statements where the interested parties believe that no confusion will be caused among relevant public; and that the interested parties agree to the registration and use of the trademark in connection with some specific products/services.
In the event that a trademark is rejected by the CTMO due to prior trademarks and the mark is the core trademark of a applicant, we would usually suggest the applicant to file a rejection appeal with the TRAB as the applicants who finally obtained the trademark registration.
In the meantime, if the trademarks are highly similar and the owners of the prior trademarks are foreign entities who are more likely to agree to the registration and use of a applicant’s trademark than a Chinese entity does, the applicant may actively seek a coexistence agreement or a consent letter from the owners of the prior trademarks.
The coexistence agreement or the consent letter shall include where the interested parties believe that no confusion will be caused among relevant public, and the interested parties agrees registration and use of a specific trademark in connection with some specific products/services. In addition, the applicant shall file for certification and legalization of the coexistence agreement or the consent letter.
 Beijing High Court Decision (2012) Gao Xing Zhong Zi No. 1043