General Mills Asia, owner of the trademark WANCHAI FERRY (in Chinese characters), obtained a victory against a trademark squatter before the Beijing Higher Court. The court affirmed the well-known status of the cited trademark for dumplings and adopted the dilution theory to reject the bad-faith applications of the opposed trademarks.
Wanchai Ferry is a leading brand of frozen food (eg, dumplings and tang yuan) owned by General Mills Foods Asia Limited. On December 21 1998 General Mills Asia applied to register the trademark WANCHAI FERRY (in Chinese) and a device mark (Figure 1, the 'cited mark') in respect of "dumplings, meat pies, flour products, etc" in Class 30 in China, and obtained the registration on August 7 2002.
On May 25 2010 Chinese company Zhengzhou Tangming Trading Co, Ltd applied to register the trademarks WANCHAI FERRY (in Chinese) and WANZAIMATOU (the pinyin equivalent to the Chinese name, Figure 2) (the 'opposed marks') in respect of:
- "cleaning preparations, cosmetics, dentifrices, incense, etc" in Class 3;
- "containers, not of precious metal, for household or kitchen use, glassware, toothpick holders, not of precious metal, thermally insulated containers for food, etc" in Class 21; and
- "freighting, car transport, storage of goods, booking of seats, etc" in Class 39.
In May 2011 General Mills Asia raised oppositions, but these were dismissed by the China Trademark Office (CTMO). General Mills Asia appealed to the Trademark Review and Adjudication Board (TRAB) in September 2012 but the appeal was dismissed. The CTMO and the TRAB held that the goods and services covered by the opposed marks were different from those covered by the cited mark in terms of functions, uses and target consumers, and the evidence was insufficient to prove that the cited mark was well-known before the filing date of the opposed marks.
General Mills Asia filed an appeal before the Beijing No 1 Intermediate Court, claiming that after extensive use and advertising, the cited mark had achieved well-known status before the filing date of the opposed marks, and the opposed marks duplicated its trademark, which violated Article 13.2 of the Trademark Law 2001. Tangming responded that the name 'Wanchai Ferry' was a geographical name and the evidence produced was insufficient to prove the well-known status of the cited mark.
In May 2016 the Beijing No 1 Intermediate Court ruled in favour of General Mills Asia, ordering the TRAB to reissue its decisions based on the following reasons:
- The evidence submitted by General Mills Asia proved that the cited mark had been used on dumplings in China since 1998, and the products bearing the cited mark enjoyed a leading position in respect of sales, market share and ranking. Moreover, the products bearing the cited mark were extensively advertised on national scale, and had received several awards. Therefore, the cited mark was widely known by the relevant public before the application date of the opposed marks, and the cited mark was recognised as a well-known trademark for dumplings.
- The opposed marks contained the term 'Wanchai Ferry' (in Chinese) and was therefore highly similar to the cited mark in terms of appearance, pronunciation and meaning. Thus, the opposed marks copied and imitated the cited mark.
- Although the goods and services covered by the opposed marks in Classes 3, 21 and 39 were dissimilar to the dumplings designated by the cited mark, the relevant public for such good and services overlapped. The use of the opposed marks was likely to mislead the relevant public to associate the opposed marks with the cited mark and misconstrue the origin of goods and service. Therefore, the opposed marks would weaken the distinctiveness of the cited mark, take advantage of the market reputation of the cited mark and harm the legal interest of General Mills Asia, constituting the circumstances set out in Article 13.2 of the Trademark Law.
Both the TRAB and Tangming appealed to the Beijing Higher Court, claiming that the evidence submitted by General Mills Asia was insufficient to prove the well-known status of the cited mark, and that the goods and services designated by the opposed marks are quite different from the goods of the cited mark, so the opposed marks would not damage the interests of General Mills Asia.
In October 2016 the Beijing Higher Court rejected the appeal and maintained the first-instance judgments. The Beijing Higher Court affirmed that the evidence was sufficient to prove the well-known status of the cited mark and found that in light of the fact that Tangming used to be an authorised agent of the Wanchai Ferry brand, it had hardly acted in good faith when applying to register the opposed marks.
Along with the constant increase of trademark applications in China, brand owners are facing increasing challenges from bad-faith applications, especially those sought in respect of dissimilar goods and services. In recent years, when the goods covered by the conflicting trademarks were considered to be remotely related, the CTMO and the TRAB were more flexible and active in rejecting bad-faith applications. They held that the goods were similar, even against the official classification, or they used the general clause of "unhealthy consequences" as an absolute ground. Nevertheless, when the goods and services of the involved trademarks are really dissimilar, the brand owner must still seek recognition of a well-known mark.
This case showcases the application of the dilution concept, described by the Beijing High Court in its Several Legal Issues Needing Attention in Current IP Hearing issued in May 2016, diluting the unique connection between the mark and the goods.
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