[Background]
In July 2012, Dongfang Mingri (Jinjiang) Import & Export Co. (“Dongfang Mingri”) filed an application to register the word mark “奔富酒园” in Chinese characters (in English: BEN FU WINERY, No. 11157214), which was granted in December 2015, designating, among other things, goods such as “wine, brandy” in Class 33. Following registration, Dongfang Mingri began using the trademark for wine products in the Chinese market.
Southcorp Brands Pty Limited (a subsidiary of Treasury Wine Estates, “Southcorp”) filed an application to invalidate the registration of the contested trademark “奔富酒园” in March 2016, on the grounds that the contested trademark was similar to a sign (“奔富” (pronounced: BEN FU)) that had already been used by certain Southcorp distributors and enjoyed substantial influence, in addition to the fact that the owner of the contested trademark had registered a large number of trademarks that were reproductions, imitations, or translations of well-known third-party trademarks, which was contrary to the principle of good faith.
The Trademark Review and Adjudication Board decided to invalidate the registration of the contested trademark, finding that there was a clear intent to take unfair advantage of the reputation of well-known trademarks, engage in unfair competition, and seek illegal profits, thereby violating the principle of good faith and disrupting the proper administration of the trademark registry and fair and orderly market competition. Dongfang Mingri’s activities were found to constitute“acquisition of a registration by other improper means,”as set forth in Article 44(1) of the Trademark Law of 2014 (unchanged in the 2019 Amendment to the Trademark Law).
The Beijing Intellectual Property Court rejected Dongfang Mingri's appeal, which had been remanded by the Beijing High Court.
The case is finally referred to the Supreme Court of the People's Republic of China.
[Decision]
The Supreme Court first summarized the key issue in the case, which was to determine whether the contested trademark “奔富酒园” had been registered through other improper means, such as those prohibited under Article 44(1) of the Trademark Law of 2014.
At the outset, the Court confirmed that the most relevant element of the contested trademark is the first two Chinese characters, “奔富 (BEN FU)”; the combination of the remaining two Chinese characters, “酒园,” means “winery,” which can only be treated as a common description in the relevant industry.
Southcorp provided sufficient evidence to support its argument that the sign “奔富” was first used by some of Southcorp’s distributors in the 1990s to refer to the “Penfolds” wine brand, a Southcorp product. Furthermore, from the perspective of the relevant public, long before the filing of the contested trademark application, the Chinese characters “奔富 (BEN FU)” had been regarded as a transliteration of “Penfolds” and, as a result, established a strong association with it.
Prior to the case at hand, there had been numerous disputes involving trademark infringement and unfair competition between Southcorp and Dongfang Mingri. Previous rulings had found that Dongfang Mingri and its subsidiaries had intentionally misled the public by using promotional materials for the “Penfolds” wine brand in the media, which constituted unfair competition as well as an infringement of the “PENFOLDS” trademark.
Based on the foregoing analysis, the Court concluded that, by filing the application to register the contested trademark “奔富酒园,” Dongfang Mingri intends to capitalize on the reputation of the “Penfolds” wine producer and gain an unfair advantage over it.
Furthermore, the Court found that the fact that Dongfang Mingri and its subsidiaries had registered a large number (more than 250) of trademarks copied from other well-known trademarks—such as “宾利 (BIN LI, a transliteration of BENTLEY)”—for goods and services in classes 33 and 35 went far beyond what is necessary for a normal business.
[Comments]
From the filing of the petition to invalidate the trademark registration to the issuance of the judgment of invalidity, this case has come to an end after six years.
In the appeal proceedings before the Beijing High Court, the TRAB’s decision and the Beijing Intellectual Property Court’s judgment invalidating the contested trademark were based, among other things, on the fact that the contested trademark had been used in commerce by the owner after registration.
Contrary to the opinion of the Beijing High Court, the Supreme Court clarified the concept of“obtaining registration by fraudulent or other improper means”in Art. 44(1) of the 2014 Trademark Law (there are no changes in the 2019 Amendment to the Trademark Law), holding that it should be interpreted as referring to the means employed when filing the application for registration, rather than the purpose of the registration, which is in itself improper.
Therefore, the fact that the contested trademark was put into use after registration—regardless of the level of advertising investment or the effectiveness of the advertising—cannot negate the “improper” nature of the means used to obtain the registration and, consequently, cannot justify the registration of the trademark.
The ruling reflects the Court’s tendency to protect best practices in trademark registration, in a manner consistent with the CNIPA, which has continued to vigorously combat malicious trademark registration in recent years.
Author: Dan Liu