18 May 2017
Two recent decisions of the Supreme People's Court in China have allowed, for the first time, similar marks to co-exist on the Register in respect of similar goods, on the basis of a coexistence agreement or consent letter (共存协议) entered into between the parties. Edward Chatterton and Horace Lam, both Partner and Co-head of Intellectual Property Technology, Asia, at DLA Piper made the following comments:
The Trademark Review and Adjudication Board (TRAB) held that Google's Marks are similar to the Prior Mark in respect of similar goods, and refused them for registration.
On appeal to the court, Google submitted a co-existence agreement during the court appeal of the first instance. As is typical, the court upheld the TRAB's decisions, and held that even where the parties have agreed to co-existence, if two marks are identical or similar and in respect of identical or similar goods, the latter shall be refused registration to maintain market order and avoid consumer confusion. On second appeal, the TRAB's decision was upheld a second time. However, on appeal to the Supreme People's Court, the decisions were overturned, and Google's Marks were permitted to proceed to registration. The court commented that when considering refusing a trademark application on the grounds of a prior mark, a consent letter issued by the holder of the prior mark is an important factor to be considered. Implications
In China, there is no codified or statutory basis setting out how the TRAB and the courts should treat any consent or co-existence agreement between the parties.
Before these two cases, when the TRAB and the courts were considering the impact of prior marks on an applied-for mark, their general practice was not to give great weight to co-existence agreements. This position is in contrast with jurisdictions such as Hong Kong or the United Kingdom, where "consent is King", and justifies registration of an identical or similar trade mark for the same or similar goods or services sold in the same market. These decisions of the Supreme People's Court will provide guidance to the TRAB and the courts in the future, possibly paving the way for co-existence agreements to hold greater weight even for identical or highly similar marks. Nonetheless, as the court emphasised that consumer confusion is the key consideration, this is not a movement to a "consent is King" style position just yet.
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