In recent years, more and more owners of trade marks are seeking to protect their trade mark rights in China by securing their legal status as well-known trade marks. The recognition gives the owners the benefits of broader protection for their trade marks, but also protection from the deficiencies relating to trade mark protection under the present legal system.

The Chinese Trademark Law and the related Implementation Regulations were last updated in 2001 in the second amendment of the Trademark Law. In this amendment, the term "well-known trade marks" was clearly adopted by trade mark law for the first time bringing general protection and recognition principles.

Although this represented important progress for trade mark legislation, the amended trade mark law also deleted another article, which provided that: "A trade mark registration that was acquired by any other unfair means shall be cancelled." This article, which did not specify the type of "unfair means", had previously been widely and effectively used by trade mark owners to protect their rights in China, especially in respect of dissimilar goods and services.

With the deletion of this article, to obtain protection for a trade mark against dissimilar goods/services, trade mark owners must now get their marks recognised as well known. At the same time, the trade mark authorities have adopted extremely strict requirements regarding the evidence required for well-known status. The burden of proof for trade mark owners has substantially increased and the corresponding examination procedures have become more complex.

Since the amendment of the trade mark law in 2001, about 1,000 trade marks have been recognised as well-known trade marks by authorities including the China Trademark Office (CTO), the Trademark Review & Adjudication Board (TRAB), the Administration for Industry & Commerce (AIC) and other courts of different levels.

The following laws, regulations and legal interpretations constitute the essential legal system of protection of well-known trade marks in China: Trademark Law and its Implementation Regulations; the Interpretation of the Supreme People's Court of Several Issues Regarding Application of Laws in Trial of Civil Disputes Involving Computer Network Domain Names; and the Interpretation of the Supreme People's Court of Several Issues Regarding Application of Laws in Trial of Trademark Civil Disputes.

On November 11 2008, the Supreme Court published a draft of the Interpretation of Several Issues Regarding Application of Laws in Recognition and Protection of Well-known Trademarks in Trademark-Related Civil Disputes (the Draft), for suggestions and discussion. The existing legal provisions and this draft represent an effort to achieve consistency in the opinions of different authorities in relation to several primary issues on the recognition and protection of well-known trade marks in China.

General principles of recognition

The principle of passive recognition means that trade mark authorities and courts can only recognise well-known trade marks upon a definitive claim for such recognition made by an interested party in a trade mark dispute case. Otherwise, they should not take the initiative to recognise a well-known trade mark.

The status of a well-known trade mark as confirmed in a case applies in that case only and will not have a decisive effect on other similar cases. However, a well-known trade mark being recognised as such in one case can be used as a strong reference in other case.

Trade mark authorities and courts will proceed to grant well-known status to a trade mark only where that party's interests cannot be protected through other legal remedies.

In practice, there are four instances where the recognition of well-known trade marks is necessary: where the interested party claims for protection against other applications/registration of dissimilar goods/service; where claims are made against other applicants/registration of similar goods/service as covered by an unregistered well-known trade mark; to stop certain infringement actions; and against a domain name or a trade name that is conflicting with the interested party's well-known trade mark.

For example, in 2005, computer company Dell sued the Dell English School for the use of the word "Dell" and "Dai Er (Dell in Chinese characters)" for education services and requested the court recognise its trade marks as well-known marks. Upon examination, the Beijing No1 Intermediate People's Court found that Dell had already registered its mark "Dell" for education services, and that the exclusive rights derived from this trade mark registration prevented Dell English School from using the sign "Dell" for education services. Under such circumstances, the court reasoned that it need not recognise whether the trade mark "Dell" is well known and thus did not examine the relevant facts and evidence.

Evidence requirements

According to the relevant legal provisions, a well-known trade mark is defined as a trade mark that is widely known to the relevant public and enjoys a good reputation in China. Article 14 of the Chinese Trademark Law stipulates that the following factors shall be considered to determine whether a trade mark is well known: the degree of knowledge of the relevant public; the duration of use; the duration of time; the degree and geographical range of any publicity of the mark; any record of the mark being protected as a well-known mark.

The recently published Draft by the Supreme Court also specifies other factors to consider. These include sales volumes, profits and taxes, market share, the geographical range of sales of the products bearing the mark, market survey reports, market value reports issued by professional assessment agencies, and documentation provided by industry associations.

For foreign trade mark owners, it is often much easier to collect evidence in foreign countries than in China. But in judgments by the CTO and TRAB examiners still insist that evidence in China would mostly affect their determination on a trade mark's well-known status in China.

For instance, McLaren International raised a dispute against the registration of the trade mark "maclaren" based on its renowned but unregistered trade mark "McLaren". In its decision, TRAB stated that the evidence as provided by McLaren International was mainly established in foreign countries and this did not prove that its trade mark had been used and obtained certain fame in China before the application date of the disputed mark. Neither did it prove that the mark is well known in China.

Accordingly, McLaren cannot enjoy broader protection as a well-known trade mark, and the disputed registration is maintained. However, there is also some good news for foreign trade mark owners. In the recently published Draft by the Supreme Court, it seems that more flexible criteria might be used in this regard. In one provision, it is stated that, pursuant to the situation of a specific case and when necessary, the judge can consider the well-known status of the trade mark outside China to some extent. It will be interesting to see how future cases will apply this new opinion.

Point in time of effective evidence

Based on the principle of recognition only when necessary, the recognition of a well-known trade mark has to be indispensable to protect the trade mark owner's rights in an individual dispute case. On the other hand, whether a mark can be recognised as well known essentially depends on the specific situation of each case, including the point in time of its well-known status.

In principle, the point of time should be on or before the occurrence of the disputed fact, which means the mark should already be well known before this time. As far as the registration of a trade mark is concerned, this point in time is the application date of the disputed trade mark. For dispute cases that relate to trade mark infringement or unfair competition, the occurrence date of the disputed infringing action or the registration date of the disputed domain name/trade name with the related authorities is considered. Generally, evidence formed during three years prior to the point of time is required to establish the mark's well-known status.

In the lawsuit between Dell and Dell English School, the judgment states that the trade mark "Dai Er (Dell in Chinese characters)" had not become well known before the trade name registration date by Dell English School on November 23 2000. Therefore, the use of the trade name Dell English School does not infringe the exclusive trade mark rights of Dell. The court did not need to recognise whether the trade mark became well known after November 23 2000. In this case, for Dell to challenge the trade name of Dell English School, the useful time period for evidence to prove Dell's well-known status should be 1997 to 2000.

Extent of protection

The protection given to a well-known trade mark is broader than for regular trade marks but it still has certain limitations. Concerning a non-registered well-known trade mark, the granted protection is limited to identical or similar goods/services. In practice, however, successful cases of this sort are rare. Also, considering the Intellectual Property Right environment in China, very few trade mark owners will take the risk to use a mark without having it registered it or, at least, applied for registration.

When such situation does occur, it is often the case that another entity, almost always a pirate, has already registered the trade mark. The pirate will most likely try to negotiate with the real owner for the sale of the well-known trade mark. In other words, neither the real owner nor the pirate will allow such a loophole – a well-known mark being left unregistered – to occur.

For well-known trade marks that are registered, Article 13 of the Chinese Trademark Law also protects them against dissimilar goods/services as long as the use of the disputed trade mark would: "Mislead the public and damage the interests of the owner of the well-known mark."

In other words, if the registration/use of the disputed mark would not mislead the public, it should not be decided the exclusive rights of the well-known mark have been infringed.

These criteria were applied by TRAB in the dispute involving the mark XI LI in Chinese, which is identical to the mark "Heineken" in Chinese characters. It was registered and designated on the sale of spectacles. TRAB decided that since the disputed mark is used on spectacles while the cited mark of Heineken Brouwerijen is used on beer, the goods of the two marks belong to sufficiently different industries without any necessary connection.

Although the cited mark Heineken Brouwerijen enjoys a high reputation in respect of beer, their designated goods are different and there is no sufficient evidence showing that the registration of the disputed mark on spectacles will mislead the public or damage the reputation of Heineken Brouwerijen. Therefore, the disputed mark remains valid.

The above principles have been widely accepted by different trade mark authorities in theory and have been applied to different kinds of cases involving well-known trade marks. However, the present situation surrounding the recognition and protection of well-known trade marks is still controversial, and is criticised particularly by trade mark owners.

It is important to remember that recognition as a well-known trade mark is almost always the only effective approach to protect a trade mark on dissimilar goods/services under the present legal system. This fact pushes trade mark owners to claim for well-known trade marks in every case where they encounter infringement or registration in bad faith on dissimilar goods/services.

Since the 2001 second amendment of the trade mark law, the trade mark authorities have accepted about 40,000 cases where a claim for recognition of well-known trade mark was made. This has put tremendous burdens on trade mark owners, as well as the relevant authorities.

On the one hand, due to the strict requirements of the well-known trade mark protection system, trade mark owners have to submit substantial burdens of proof, especially regarding evidence. On the other hand, with more documents and complex examination proceedings, the relevant trade mark authorities are taking longer in deciding cases.

Furthermore, local AICs and courts may have different interpretations regarding the criteria for recognising well-known trade marks. Therefore, selecting the right case and the right jurisdiction and gathering the necessary evidence are vital to a trade mark owner's effort in obtaining the well-known recognition.

Among the 1,000 or so trade marks that have been recognised as well known, less than 100 are foreign marks. Many people think it presents a discrepancy to the quantity of domestic/foreign trademarks that are known to the public in fact.

The situation means trade mark owners, especially those of foreign brands, face higher risks of unfair competition and the dilution of the distinctiveness of trade marks. Some trade mark owners have been obliged to register their mark in all 45 classes on their own, despite the high registration and maintenance costs. Others, having not registered the mark in time, must sometimes pay considerable sums of money to get back their trade mark back from a third party.

The well-known trade mark recognition system is complex and often quite demanding to trade mark owners. While some trade mark owners have found effective strategies of working with the system, others are struggling to safeguard their rights. Many people are hoping the proposed third amendment to the Chinese Trademark Law, which is under discussion, will introduce more effective provisions for well-known trade marks, as well as other remedies against actions in bad-faith.

Xiang An

Xiang An is a partner in China Sinda Intellectual Property and the head of the firm's trade mark practice. Xiang began her career in the IP field in 1992 and has extensive experience in all areas of trade mark matters, including prosecution, litigation and counseling, and has handled many complex cases. Her skills in handling trade mark dispute cases have helped many of her clients in difficult situations. Xiang is particularly experienced in well-known trade mark related matters and has helped successfully obtain well-known status for more than 10 foreign trade marks on behalf of international clients. Xiang has a Bachelor's degree in civil engineering. She also earned an LLM degree in intellectual property from the John Marshall Law School and furthered her law studies in the US and Canada. She is a qualified Chinese trade mark attorney as well a registered Chinese patent attorney.

Lu Jin

Lu Jin is a trade mark attorney with China Sinda Intellectual Property. She has practiced in all phases of trade mark prosecution since 2000. She also has extensive experience in trade mark searching and watching, general counseling and litigation. Lu advises both domestic and foreign clients with regard to building up trade mark portfolios and establishing effective protection strategies. She has helped clients in many complex and difficult cases, especially in relation to several famous brands. Lu received her bachelor from Peking University. She has been a registered attorney at Law in China since 2004.