For public consultation, on November 11, 2008, the Chinese Supreme People’s Court released a draft of its Judicial Interpretations on Applicability of Laws in Recognising and Protecting Well-known Trademarks in Civil Disputes Involving Infringement of Trademarks (draft interpretations). The public consultation lasted for one month and ended on December 12, 2008.
If the draft interpretations are passed in their current form, it will be a step forward for China in fulfilling its WTO obligations by providing multi-national companies, whose trademarks are well-known overseas, a similar well-known trademark status in China.
The draft interpretations introduce concepts akin to the dilution of trademark principle into Chinese laws, a topic which still remains in the academic debates in China.
Notable Changes to the Existing Procedures
Chinese People’s Courts are empowered by the PRC Trademark Law in declaring whether a trademark is well-known in adjudicating civil disputes involving trademark infringement. The PRC Trademark Law only sets out rudimentary guidelines on determining the well-known status of a trademark in China.
The draft interpretations contain a total of 14 provisions and supplement existing trademark laws by providing a written document to streamline the existing unwritten practice of the People’s Courts in recognising the well-known status of trademarks in China.
Widened Scope of Protection of a Well-known Trademark in China
Article 13(2) of the PRC Trade Mark Laws prohibits registration and use of a latter similar mark in dissimilar goods if it causes confusion to the public and prejudice to the interests of the owner of the earlier mark.
The draft interpretations supplements Article 13(2). Article 8 of the draft interpretations embodied the dilution of trademark principle where the use of a latter mark causes a likelihood of association with an earlier well-known mark, and the use would be detrimental to the distinctive character or reputation of the earlier mark. The threshold for proving likelihood of association, which is a question of more probable than not, is relatively lower than proving public confusion, which is a question of fact.
Holistic Approach in Determining if a Trademark is Well-known in China
Article 14 of the PRC Trade Mark Laws lists five criteria for determining well-known status of a trademark.
The draft interpretations clarify that it is not required for the People’s Courts to consider all five criteria. Instead, they may use a holistic approach to consider cases on a case-by-case basis and, in suitable cases, the fact that mark is well-known overseas.
Clarifications on Situations where a Well-known Status of a Trademark should or should not be declared by the People’s Courts
The draft interpretations explicitly require People’s Courts to declare whether a mark is well-known in the following circumstances:
(1) Where the defendant’s enterprise name and/or domain name are similar to the plaintiff’s well-known mark;
(2) Where the defendant counter-claims or seeks a non-infringement declaration; and
(3) Where the defendant uses a mark similar to an unregistered well-known mark in similar goods or uses a mark similar to a registered well-known mark in dissimilar goods.
At present, the People’s Court is not obliged to declare a mark well-known (although this is the usual practice of the court) in adjudication.
The draft interpretations state that the People’s Court shall not declare whether a mark is well-known in the following situations:
(1) The trademark infringement and/or unfair competition claim does not rely upon whether a mark is well-known (i.e., where the defendant uses a mark similar to a registered mark in similar goods in a clear cut trade mark infringement case); and
(2) The trademark infringement and/or unfair competition claim does not fulfill other legal requirements (i.e., the plaintiff does not show that he owns the well-known mark) thus there is no prima facie case to put forward to trial.
Comment
The draft interpretations supplements the existing PRC Trademark Law and widens the scope of protection of a well-known status of a trademark in China by introducing concepts akin to the dilution principle. It also clarifies situations where a well-known status of a trademark should or should not be declared by the People’s Courts.
The draft interpretations favour multinational companies and encourage them to bring their well-known marks into the Chinese markets by providing them a similar well-known trademark status in China.
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