[co-authors - Yan Wang and Binghui Wang]

Forewords

It is well known that one of the key issues in trademark registration allowance and affirmation cases is whether a trademark is similar to another prior conflicting trademark on identical or similar goods. The determination of trademark similarity in principle abides by the official Trademark Examination and Trial Guidelines that is newly updated this year. In practice, however, as the official guideline cannot cover all possible scenarios, it is frequently necessary to conduct a case-by-case analysis in order to determine whether the trademarks are similar or not.

Along with the growing number of trademark applications in China year by year, malicious imitation trademarks continue to emerge and malicious imitation methods are constantly updated. There are cases of malicious imitation that cannot be fully regulated in the examination process under the past examination guidelines.

This article introduces two of the “Typical Trademark Opposition, Review, and Adjudication Cases of 2020”—the cases of “好待百” and “梦多加喱” to discuss the impact of applicant’s bad faith on trademark similarity determinations in practice.

I. Case Brief

The aforementioned typical cases are oppositions we filed on behalf of HOUSE FOODS GROUP INC. (hereafter referred to as “HOUSE”) against the two trademarks “好待百”and “梦多加喱” applied by Nanjing Yaosheng Commercial and Trading Co., Ltd. HOUSE is a well-known Japanese corporation. Curry, seasonings, snack foods, and health foods are its main products. Among these, its curry products have a sizable market share. Since its entry into the Chinese market, HOUSE has won numerous awards for its products, and its trademarks such as “好侍”, “百梦多”, and “味嘟嘟” have become familiar to the Chinese food industry and Chinese consumers. With the expansion of HOUSE's brand influence in recent years, malicious imitations and even knockoffs have emerged. The opposed party in this case, Nanjing Yaosheng Commercial and Trading Co., Ltd, applied for four trademarks of “好待百梦卶加喱”, “好待白梦卶加喱”, “好待百”, “梦多加喱” in succession which imitated our client’s trademarks “好侍” and “百梦多”, and the opposed party also applied for some others’ well-known trademarks, which seriously jeopardized the rights of other legal prior rights holders, including HOUSE.

During the opposition preparation stage, we investigated the opposed party and discovered that the legal representative of the opposed party, the natural person YE MF established an individual business. Another natural person Ye MB ran a business under the same tradename “Riyi”-“Nanjing Jiangning District Riyi food sales center”, and Ye MB also maliciously registered a number of others’ well-known trademarks. At the same time, Ye MB and another natural person Ye MS, who was found in the previous investigation by HOUSE to have repeatedly applied for the trademarks that copied HOUSE’s trademarks “好侍” and “百梦多”, and also jointly invested and established Nanjing Huidefeng Food Trade Co. Ltd. And the malicious imitation applications from Ye MB, Ye MS and the opposed party “Nanjing Yao Sheng Trade Co. Ltd.” were all entrusted with Jinan Suying Intellectual Property Agency Co. Ltd., which can hardly be explained as a coincidence, and there is a great possibility that they are related to each other. Therefore, in these opposition cases, we claimed prior right on the trademarks “好侍” and “百梦多” and their popularity as well as the opposed party’s malicious imitation, including their malicious registration of a number of other well-known trademarks in addition to HOUSE’s, their possible connection with other malicious registrants, and the fact that they are in the same industry as HOUSE.

In this case, we encountered some difficulties in claiming that the trademarks are “identical or similar trademarks on the same or similar goods,” as specified in Article 30 of the Trademark Law. As shown in the comparison chart of the two opposed trademarks and the cited trademarks, there are clear differences between the two trademarks in terms of word composition, pronunciation, meaning, and overall appearance. If the two opposed trademarks are examined in isolation, generally they will not be determined similar to the cited trademarks.

Specifically, when comparing the opposed trademark “好待百” with the cited trademark “好侍” , it can be seen that they are only identical in the Chinese character “好”meaning “good which is frequently used in trademarks. The degree of similarity between the two is low. Comparing the other opposed trademark “梦多加喱” with the cited trademark “百梦多”, the first character of the two is different, and they only share the same element “梦多”. The degree of similarity is also low.

Nevertheless, if the two opposed trademarks are combined, the conclusion is different. In fact, the cited trademarks “好侍” and “百梦多” are frequently used together in practice. As the company HOUSE’s main curry brand, “百梦多” has a very high relevance to its tradename in Chinese “好侍”. The two opposed trademarks “好待百” and “梦多加喱” are the split and combination of the three elements of “好侍”, “百梦多” and “咖喱”. The opposed party obviously split them on purpose with the knowledge of the cited trademarks in order to evade the similarity examination. Given that the opposed party also applied for the trademarks of “好待百梦卶加喱” and “好待白梦卶加喱”, we have every reason to believe that the opposed party’s application for the trademarks “好待百” and “梦多加喱” is also out of bad faith and is also intended to combine the two trademarks together in use after registration in order to achieve its improper purpose of imitating and free riding on the brand “好侍百梦多” of HOUSE. Therefore, the two opposed trademarks should not be examined in isolation, but be examined together and determined similar. Finally, the examiners supported our above claims, and decided the two opposed marks similar to the two cited trademarks and disapproved the registration of the two opposed marks according to Article 30 of the Trademark Law.

II. Impact of applicant's bad faith on similarity determinations

As the above-mentioned case is very typical, the examiner specifically wrote an article introducing this case which was published in China Intellectual Property Journal. In his comments, he pointed out: “For the behavior of applying for trademark registration by altering or splitting other people’s well-known trademarks, the examination is no longer in isolation which ignored the internal connection between the trademarks. Instead, the examination is made comprehensively by taking the series of trademarks applied with malicious intentions into account, and combining the opposition cases together in order to fully consider the factors such as similarity of two parties’ trademarks, the popularity of the prior trademarks and subjective intentions of opposed party so as to stop the act of taking free ride on the well-known trademarks and ensure the justice and fairness of trial results. The comment clarifies that if a trademark applicant has bad faith, the CNIPA will no longer examine the trademark in isolation, but will consider the series of applied-for-trademarks the applicant filed out of bad faith as a whole, in order to effectively curb “free-riding” behavior.

In fact, the examination of the applicant’s subjective maliciousness is also mentioned in the newly implemented Trademark Examination and Trial Guidelines. The chapter on examination and trial of identical and similar trademarks now includes section 3.2.4 on the examination of the subjective intention of the trademark applicant, which states that “The subjective intention of the trademark applicant shall be considered when determining whether the trademark is likely to cause confusion about the source of goods. When the trademark applicant has obvious maliciousness, and the other factors are the same, it is more likely to cause confusion among the public.” This section provides a guiding basis for the similarity determination of malicious imitation of trademarks. This is very favorable for the prior right holder to claim Article 30 in remedial procedures such as opposition or invalidation against the malicious trademarks which replace, split or combine prior right holder’s trademarks. Under certain circumstances, the success or failure of the proof of malicious intention may even have a direct impact on the outcome of the case. At the same time, taking into account the consistency of the subjective maliciousness, the examiner may link together multiple malicious trademark applications of the same applicant which will save examination resources and avoid contradictory determinations.

In practice, malicious imitation via splitting and combination is not limited to word trademarks. Device trademarks may also be imitated through this manner. The case shown in the table below is a trademark of splitting prior trademarks of another entity. It is obvious that when these device trademarks are examined in isolation, they do not constitute similar trademarks with the prior trademark. All of these trademarks are thus registered. The prior right holder then filed invalidations.

In the invalidation proceeding, the examiner recognized the applicant’s claim of trademark similarity and determined the registration of the disputed mark was obtained through improper means, i.e. malicious imitation.

From the above, it can be seen that splitting or combining others’ prior well-known trademarks has become a relatively common means of malicious imitation at present, and these malicious trademarks are difficult to be discovered in the examination process. The prior rights holders often need to discover malicious imitation trademarks in a timely manner through routine monitoring, and then defend their rights through the subsequent opposition and invalidation proceedings.

Closing

In March, 2021, China National Intellectual Property Administration (CNIPA) issued the notice Special Campaign Plan to Combat Malicious Pre-Emptive Registration of Trademarks, focusing on the special campaign to combat malicious preemptive application of trademarks, which has achieved great results. The Trademark Examination and Trial Guidelines, which took effect on January 1, 2022, also carries on this spirit by imposing stricter regulation on malicious application. It is hoped that by conducting a strict examination of trademarks splitting or combining others’ trademarks with subjective malice in trademark oppositions, invalidations, and other remedy proceedings, the legitimate rights of prior rights holders will be better protected and a market environment characterized by fair competition, honesty, and trustworthiness, as well as the legal environment, will be enhanced.