Dilution Doctrine
The other approach is for trade mark owners to rely on the concept of trade mark ‘dilution’, which was recently introduced as a legal concept in China, in the Interpretations of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Cases of Civil Disputes over the Protection of Well-Known Trade Marks.
There are three typical situations in which a court will find there has been ‘dilution’:
1) where the distinctiveness of the well-known mark has been weakened;
2) where there has been a diminishment of the well-known mark’s reputation in the relevant market; and
3) where there has been an improper ulitization of the well-known mark’s reputation.
Three conditions must be met for a claim of trade mark dilution to be made out:
1. The relevant public of the disputed mark must be aware of the unique connection between the well-known trade mark owner and its goods or services.
2. Upon seeing the disputed mark, the relevant public must associate it with the well-known trade mark. Usually, if the disputed mark is identical with or highly similar to the well-known trade mark, this will be readily established.
3. The relevant public must be able to discern that the disputed mark has no connection to the well-known trade mark. This level of cognition may be influenced by several factors, including the price, characteristics of the goods and services provided by the owner bearing the well-known trade mark, and whether the owner operates across different industries, etc.
Several recent judgments demonstrate how the concept of dilution is being applied by the courts.
In Unilever N.V. v TRAB (case 1058 of (2012) Yi Zhong Xing Chu Zi, 20 April 2012), the Beijing No. 1 Intermediate Court held that registration of the disputed mark ‘Pond’s and Pang Shi in Chinese characters’:
• in relation to “infant formula; sanitary pads; antisepsis paper” would lead to confusion among the relevant public, given the Plaintiff’s mark ‘Pang Shi in Chinese characters’; and
• in relation to “tonics; air freshening preparations” would damage the unique, sole and stable connection between the Plaintiff and “cosmetics”, thus weakening the distinctiveness of the Plaintiff’s well-known trade mark ‘Pang Shi in Chinese characters’ and cause damage to the interests of the Plaintiff.
Another judgment issued by the same court, the Beijing No. 1 Intermediate Court went even further.
In Sichuan Jian Nan Chun Liquor Factory v TRAB (case 494 of (2012) Yi Zhong Xing Chu Zi), the Court held that the registration of the disputed mark No. 4082115 ‘Jian Nan Chun in Chinese characters’* in relation to “rice, wheat flour”:
• violated Article 28 of China’s Trade Mark Law, as the disputed mark was confusingly similar to the Plaintiff’s prior registered mark ‘Jian Nan Chun in Chinese’, in relation to similar goods “cookies, corn flour, corn flakes”; and
• also violated Article 13 (2) of China’s Trade Mark Law, as the disputed mark dilutes the reputation of the well-known trade mark No. 284529 ‘Jian Nan Chun in Chinese characters’ registered in relation to “liquor”.
*The first two characters of the disputed mark ‘Jian Nan Chun in Chinese characters’ are different from the first two characters of the Plaintiff’s mark ‘Jian Nan Chun in Chinese characters’.
Interestingly, TRAB was unsuccessful at first instance and appealed to the Beijing Higher Court. The Beijing Higher Court upheld the first instance decision, rejecting the disputed application; however, it concluded that the Beijing No. 1 Intermediate Court’s finding in relation to dilution was incorrect and should be rectified. The Beijing Higher Court held that:
• the goods “rice, wheat and flour”, in relation to which registration of the disputed mark had been sought, were distinguishable, in terms of both function and usage, from the goods, liquor, in relation to which the well-known trade mark ‘Jian Nan Chun in Chinese characters’ had been used; and
• the registration and use of the disputed mark would not damage the interest of Sichuan Jian Nan Chun Liquor Factory.
The rectification made by the Beijing Higher Court shows clearly the disadvantage that can attach to a defensive filing. Because the Plaintiff owned a prior registration in relation to similar goods, the Court dismissed, as being redundant, the Beijing No. 1 Intermediate Court’s finding of dilution.
Conclusion
It will be advantageous for trade mark owners, where possible, to obtain decisions from the CTMO, TRAB or the courts affirming the well-known status of their trade marks. They will then be able to rely on evidence that shows that use of the disputed mark will dilute the distinctiveness of the well-known mark. They should, however, be aware that ‘well-known mark’ status will not necessarily provide protection across all 45 classes. It may, for example, still be possible for a third party to register the mark in relation to goods that are considered to be sufficiently different.
Trade mark owners not able to obtain well-known mark recognition, may, if there is sufficient budget, benefit from defensive registration in selected additional classes.
