Fluid trademarks are gaining popularity in China, but a number of grey areas remain
The concept of fluidity enables rights holders to make significant and continual changes to their registered trademarks in order to attract and retain customers. Arguably the world’s most striking fluid trademark is the ‘Google Doodle’. Google changes the trademark on its homepage almost daily; however, the altered logo is still recognisable as Google’s. In China, this approach has been adopted by online players in particular, such as Baidu, China’s leading search engine, and QQ, China’s most popular online chat forum.
Due to their changing nature, variants of a trademark are not recognised under Chinese trademark law. The protection of fluid trademarks is therefore a controversial legal issue. China is a first-to-file country, not first-to-use. The use of fluid trademarks in commerce is a relatively new concept among Chinese enterprises and the authorities; therefore, there are grey areas regarding the legal protection of fluid marks.
Even though fluid trademarks have no legal standing under Chinese trademark law, the following laws provide that rights holders can use variations of their mark without the danger of losing registration, provided that the variants do not harm the distinctive character of the underlying mark:
- Articles 9, 44 and 52 of the Trademark Law (2001);
- Article 39 of the implementing regulations of the Trademark Law (2002);
- Article 20 of the Opinions of the Supreme People’s Court on Certain Issues Concerning the Trial of Administrative Cases of Trademark Authorisation Confirmation (2010);
- Article 9 of the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Civil Cases Involving Trademark Disputes (2002);
- Article 2 of the Copyright Law (2012); and
- Article 6 of the implementing regulations of the Copyright Law (2013).
Article 9 of the Trademark Law provides that a trademark for which registration is sought must have distinctive features, must be easily distinguishable and must not conflict with pre-existing lawful thirdparty rights. However, in accordance with the examination standard of the China Trademark Office (CTO), if variations of a registered mark are filed by the same applicant, registration may be granted, even though the variants are similar to prior applications or registrations by the same rights holder.
Article 44.1 of the Trademark Law provides that the CTO shall order rectification within a specified time period or cancel a registration if the registered mark is altered without authorisation after registration is granted. This provision indicates that the registrant must use the trademark exactly as it was registered, which directly leads to the impossibility of obtaining registration for variants.
Furthermore, in accordance with Article 44.4, if a trademark has not been used for three consecutive years, the rights holder may face a non-use challenge and risk cancellation of its registered mark. Cancellation will be ordered by the CTO at the request of an interested party. In other words, if a rights holder uses variations instead of its mark exactly as registered, the mark becomes vulnerable to a nonuse cancellation action three years after registration.
In 2010 the Supreme Court issued the Opinions of the Supreme People’s Court on Certain Issues Concerning the Trial of Administrative Cases of Trademark Authorisation Confirmation, according to which the principle of using static marks is flexible. In this opinion, the Supreme Court stated that “despite the nuanced difference between a trademark in actual use and an officially registered trademark, if the distinctiveness thereof is not altered, it can be deemed as use of a registered trademark”. This opinion makes room for rights holders to retain the rights in their registered mark, provided that any variations do not alter its distinctiveness.
The main reason for establishing the opinion was to provide the courts with a legal basis on how to apply the ‘use’ provision as laid down in Article 44 when dealing with non-use cancellation actions. However, the opinion fails to clarify the term ‘nuanced difference’.
Due to the split between the Supreme Court on one side and the CTO, Trademark Review and Adjudication Board (TRAB) and local administrations of industry and commerce on the other, interpretations may vary. Such differences in interpretation leave rights holders facing a dilemma regarding whether unregistered variants have the same legal standing as the registered mark. Judicial decisions have final legal effect, which means that rights holders may go through both the prosecution and the judicial procedures in order to obtain a favourable result.
In VERSUS v VERSAS ITA the CTO and the TRAB held that the two marks were different since VERSAS ITA contained three additional English letters, while the VERSUS in the reference mark had a fixed meaning. However, the Supreme Court ruled that the two marks were similar based on its opinion that the factors mentioned by the CTO and the TRAB were insufficient to have a distinguishing function and the relevant public would find it difficult to differentiate between the two marks.
According to Article 52 of the Trademark Law, use of a trademark that is identical or similar to another registered mark for identical or similar goods constitutes trademark infringement.
Article 9 of the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Civil Cases Involving Trademark Disputes considers marks to be ‘identical’ when the alleged infringing mark and the registered trademark do not appear to be different on visual comparison.
Further, this article considers trademarks to be ‘similar’ if, on comparison of the marks, any of the following components is liable to cause the relevant public to misidentify the source of the goods concerned or mistakenly believe that the source has a particular connection with the goods bearing the registered trademark:
- the composition, pronunciation or meaning of the words contained in each;
- the composition and colours of the devices contained in each;
- the three-dimensional shapes or colour combinations contained in each; or
- a combination of the above elements.
Further, in civil litigation, if the cited trademark is a well-known mark and the court acknowledges that the subject mark is similar to the cited mark, then a broad criterion will be applied to the determination of similar goods. The recognition of similarity between marks is critical in civil litigation.
SNOW is a well-known trademark in China in relation to beer. In W!nSnow v SNOW the defendant used W!NSNOW for identical goods. The court found the two trademarks to be similar because ‘W!n’ is not an English word and ordinary consumers generally would render no interpretation from it. Therefore, the court deemed ‘snow’ to be the most distinctive part of the trademark. The defendant was found to have infringed the plaintiff’s trademark by using W!NSNOW as its trademark for beer.
This case suggests that even in the absence of registration of every variation of a registered mark, the different variations might be granted protection based on their connection with the registered mark, provided that the distinctive character of the mark is not altered from its registered form. A third party can neither register nor use the altered form, provided that the variant shares the same distinctive characteristics as the registered mark.
Slogans are widely used by companies for marketing and product promotion, to convey their business philosophy and foster their image. The review standard for the registration of slogans as trademarks is strict. Slogans must be distinctive and should not be generic sentences.
Examination criteria issued by the CTO state that “original and nonpopular [phrases or sentences] or those combined with other elements thus gaining distinctiveness as a whole” can be registered as slogan marks. Further, according to the CTO, unoriginal phrases or sentences that indicate the features of a product or service and thus lack distinctiveness cannot be registered as slogan marks. Thus, slogans must be original, should not be descriptive and should not have been popularised, which sets a high threshold for the assessment of distinctiveness and thereby greatly increases the difficulty of obtaining slogan mark registration in China.
In trademark prosecution practice, even if an application is rejected by the CTO during substantial examination, the applicant has the opportunity to prove the distinctiveness of the slogan through submitting use evidence to the TRAB during the review-of-refusal procedure. The TRAB may subsequently support the application.
A slogan may be granted trademark registration in one class and be refused registration in another. The “Share moment, share life” slogan mark was registered in Class 40 (photographic film development), but was rejected in Class 1 (photographic paper) on the grounds of lacking distinctiveness in Class 1.
Copyright is an alternative way to protect fluid trademarks or slogans. An unregistered variant or slogan can be protected under copyright law, which has no continuous-use requirement. Compared with trademark registration, copyright recordal is more efficient and entails no substantial examination.
The term ‘works’ refers to original intellectual creations in the literary, artistic and scientific domains, which are capable of being reproduced in a tangible form. A ‘literary work’ refers to a work that is manifested in text form, regardless of its length or format. Provided that it is original, it can be protected under copyright law. Variations of a registered trademark and slogan are, in principle, not excluded from copyright protection, provided that they are original. However, copyright law fails to define ‘original’.