On September 29 2016 the Supreme People’s Court finally ended a decade-long trademark dispute by ruling on YKK Corporation’s trademark opposition retrial petition (Supreme People’s Court (2016) Zui Gao Fa Xing Zai No 67 Administrative Judgment).
The Supreme People’s Court affirmed that the evidence submitted by YKK Corporation proved that, before the application for the opposed trademark, the trademark YKK used on zippers had become well known in China. Thus, according to the law, the opposed trademark should be rejected for “upholstery for vehicles”, and the ruling of the Trademark Review and Adjudication Board (TRAB) and the first and second-instance decisions were incorrect.
The Supreme People’s Court made clear in its judgment that “the scenario of the prior cited two cases are basically the same as those of this case, and the evidence about the well-known state of trademark in the case is also basically the same. To persist with the principle of applicable standards consistency, cross-class protection of the well-known trademark of YKK should also be given in the present case. Each case differs, and it is reasonable to abide by the case-by-case principle in examination, but it is unacceptable to give distinctively opposite judgment just taking the case-by-case principle as an excuse in similar cases. Otherwise, it will be difficult to guarantee the clarity and predictability of application of trademark laws”.
The opposed trademark was filed on March 23 2004 for goods including “air pump (vehicle accessory), upholstery for vehicle, car, etc” in Class 12. YKK Corporation filed an opposition, considering the applied-for mark to be a reproduction of its YKK trademark, which was registered for goods including “plastic zipper, and metal zipper” in Class 26 as early as 1979, and thus claimed that registration should be denied.
In December 2009 the China Trademark Office ruled against YKK. It held that although YKK Corporation’s YKK trademark used on zippers had a relatively high reputation, the goods of the opposed trademark were distinctively different in terms of function and use, and thus the registration and use of the opposed trademark would cause no confusion as to the source of the goods. It further held that YKK Corporation had not provided sufficient evidence to prove the claimed well-known status of the YKK trademark in China before the filing date of the opposed mark.
YKK Corporation appealed to the TRAB, which in March 2011 ruled against YKK and approved registration of the opposed trademark. YKK Corporation then appealed to the Beijing No 1 Intermediate People’s Court, which on December 18 2012 ruled that the goods on which the opposed trademark would be used were different from the zippers bearing the YKK trademark in terms of function, use, production department, sales channels and consumers. The first-instance court found that when seeing the opposed trademark, the relevant public would not associate it with the YKK mark owned by YKK Corporation, and therefore the public would not be misled and the interests of YKK Corporation would not be damaged.
YKK Corporation further appealed to the Beijing High People’s Court, which rejected its claims. The second-instance court held that: “For a well-known trademark already registered in China, its scope of protection shall depend on the level of its well-known state. Where the goods on which the well-known trademark is used and the goods on which the opposed trademark is used are so different that the protection of this well-known trademark may not be extended that far. The evidence of YKK Corporation can prove that its trademark ‘YKK’ had had very high reputation in respect of zippers in China before the application of the opposed trademark. However, the goods of the opposed trademark are so different from the goods of YKK in terms of function, use, production department, sales channel and consumers, etc., that relevant public would not associate the opposed mark with the YKK mark used on zippers.”
YKK Corporation then filed a retrial petition with the Supreme People’s Court. Following trial, the Supreme People’s Court ruled in favour of YKK Corporation, holding as follows:
- The evidence provided by YKK Corporation proved that its zippers could be applied to vehicle upholstery (which the TRAB also admitted).
- ‘YKK’ was a coined word and had relatively strong distinctiveness. As the YKK mark was highly reputed for zippers, and the goods “upholstery for vehicles” were closely related, the use of the opposed mark would mislead the public.
In addition, before the second-instance judgment the Beijing High People’s Court had affirmed that the YKK mark had become well known in two cases: Gao Xing Zhong Zi (Case No 1236 (2012)) and Gao Xing Zhong Zi (Case No 482 (2013)). The facts of the two cases were basically the same as those of the case at hand, as was the evidence provided about the mark’s well-known status. Therefore, the second-instance decision provided corresponding cross-class protection based on the well-known status of the YKK mark.
Principle of necessity of recognition of well-known trademarks
The Supreme People’s Court provided, in Article 2 of the Judicial Interpretation on Protection of Well-Known Trademarks (Fa Shi  No 3, Interpretation of the Supreme People’s Court on the Issues Concerning the Application of Law in Trial of Civil Dispute Cases Involving the Protection of Well-Known Trademarks), that where a party takes the well-known state of a trademark as fact and the people’s court considers that it is necessary based on the circumstances of a case, the people’s court will affirm whether the trademark at issue is well known. The Supreme People’s Court again made clear in the trademark opposition retrial against the JUHUA mark (Supreme People’s Court (2014) Zhi Xing Zi No 112 Administrative Decision) that the trial of trademark administrative cases will also follow the principle of necessity of recognition of well-known trademarks. The Supreme People’s Court considered that the three conditions for the application of Article 13.2 of the Trademark Law in administrative cases are that “the opponent’s trademark has been a well-known trademark in China, the opposed trademark constitutes a reproduction, imitation or translation of this well-known trademark, and the registration of the opposed trademark would likely cause confusion or mislead the public, and thus impair the opponent’s interests”. The reputation of the cited trademark should be taken into consideration, but this does not mean that it is necessary to investigate and recognise the well-known status of a mark in all cases where the opponent claims well-known trademark protection. How well known the mark is will affect how badly the opposed mark would mislead and confuse the relevant public; but whether a trademark is well known is not necessarily the first issue to be affirmed in a trial where Article 13.2 of the Trademark Law is claimed to be applied.
In the case involving the HONGDA mark (Supreme People’s Court (2015) Zhi Xing Zi No 254 Administrative Decision) the Supreme People’s Court ruled that the goods governed by the opposed mark (“steel products, etc” and the goods covered by the cited HONDA mark (“car and motorcycle, etc”) owned by Honda Corporation were quite different. The evidence submitted by Honda Corporation proved the reputation obtained by the HONDA mark in respect of “car and motorcycle, etc” before the application for the opposed trademark, but this influence was not strong enough to mislead the public to associate the opposed mark with HONDA. Therefore, the Supreme People’s Court rejected the claim that HONDA enjoyed protection as a well-known mark.
Article 10 (Sequence of Application of Important Conditions in Article 13) of the Provisions on Issues Concerning the Trial of Administrative Cases of Trademark Authorisation and Confirmation (Opinion-Soliciting Draft), promulgated by the Supreme People’s Court in 2014, states that “For application of Article 13.2 or 13.3 of the Trademark Law, the People’s Court shall firstly confirm whether the trademark requesting protection has reached well-known state or not; where it could be affirmed, the People’s Court shall then affirm whether the opposed trademark constitutes the reproduction, intimation or translation of the well-known trademark, and whether this opposed trademark would easily confuse or mislead relevant public, and possibly impair the benefits of the well-known trademark owner”. However, this article was excluded from the Provisions on Issues Concerning the Trial of Administrative Cases of Trademark Authorisation and Confirmation implemented in 2017. Thus, where trademark protection in requested under Article 13 of the Trademark Law, the court will continue to apply the principle of necessity of recognition. If an opposed trademark does not constitute a reproduction, imitation or translation of another party’s well-known trademark, or the goods are too distant to cause confusion or mislead the public, there is no need to provide cross-class protection for the well-known trademark. In such case, there is also no need to investigate the well-known status of the cited mark, as in the JUHUA and HONGDA cases.
In the case at hand, the opposed trademark was exactly the same as the opponent’s YKK mark, which had relatively strong inherent distinctiveness. Further, it was proved that the registration and use of the opposed trademark on the goods “upholstery for vehicle” would result in damages to the owner of the well-known mark. YKK Corporation won the case by employing two important litigation strategies to make clear the relevancy of goods. First, YKK Corporation gave up the items which were most distant from its products – namely, “air pump (vehicle accessory), etc” – and focused on the most relevant goods (“upholstery for vehicle; car”). Second, it provided evidence proving that the YKK zipper was used in the production of vehicle upholstery. Based on the evidence, the Supreme People’s Court affirmed that zippers and upholstery for vehicles were relevant, and that the registration and use of the opposed trademark would mislead the relevant public. The Supreme People’s Court overturned the judgment of prior proceedings, and affirmed that YKK constituted a well-known trademark used on zipper goods and should be granted cross-class protection. For the first time, the YKK mark was affirmed as a well-known trademark by the Supreme People’s Court.
Persisting with principle of consistent law application standard
The Supreme People’s Court ruled that it is important to examine each trademark dispute on a case-by-case basis, in view of the unique situation of each case, but distinctively opposite judgments should not be given in similar cases. This would make it difficult to guarantee the clarity and predictability of the trademark rules. The YKK mark, owned by YKK Corporation, was affirmed as a well-known trademark and provided with cross-class protection in two Beijing High People’s Court decisions. On December 7 2012 the Beijing Higher People’s Court issued Gao Xing Zhong Zi (No 1236 Administrative Judgment (2012)), holding that the use of the opposed mark on “electric scissors” would mislead the public as such goods and YKK zippers were used in clothing manufacturing, and thus registration of the opposed mark for “electric scissors” was denied. On September 30 2013 the Beijing High People’s Court issued Gao Xing Zhong Zi (No 482 Administrative Judgment (2013)), refusing registration of the opposed mark on the goods “yarn and textile line, etc” as such goods and YKK zippers were used in clothing manufacturing.
The Supreme People’s Court also confirmed in an administrative review of a trademark application for GAP UNDERWEAR (Zui Gao Fa Xing Zai No 7 Administrative Judgment (2016)) that: “It’s necessary to consider the situations of individual cases in trademark review and judicial examination procedures, but the basic evidence of examination is the provisions of the Trademark Law and other relevant laws, and the uniformity of law enforcement standards by the reason of individual case examination should not be neglected.” In 2010 the Supreme People’s Court promulgated the Provisions on Case Guidance Work (Fa Fa  No 51) and established a case guidance system. At times, the legislation can barely keep up with innovation. The combination of the blurry lines of legislation and the differences between judges’ decisions indirectly leads to the expansion of judges’ discretionary power. The Supreme People’s Court, as judicial policy maker, holds responsibility for unifying judges of different levels in order to avoid injustice stemming from deviations in the understanding of the law and to guarantee the predictability of laws and strengthen the transparency of law enforcement.
The Supreme People’s Court’s decision in the YKK case has again emphasised the principle of necessity of recognition of well-known trademarks, as well as the principle of applying consistent legal standards. This decade-long trademark suit also witnessed the development of China’s IP rights legislation and court judgments.
This article first appeared in IAM. For further information please visit www.IAM-media.com.