How do trademark disclaimers affect similarity examination?
Jie He, Mengmeng Yu and Xia Zheng of AFD evaluate the role of trademark disclaimers in similarity examinations, analysing a number of cases dealing with the issue
A trademark is a sign indicating the origin of goods. It by nature requires the constituent elements to show distinguishable characteristics and features so as to further prompt brand recognition. You may find many trademarks also have descriptive or generic elements in order to help consumers quickly identify the basic information relating to the goods, and thus easily establish connections between the trademark and the designated goods. Typical descriptive or generic elements are words or symbols that are widely used to describe the designated goods bearing the trademark, such as the name of the goods, the characteristics of the goods, or the name of the place where the goods are manufactured. Those elements are inevitably also used in a normal business context by others. In order to balance the exclusive rights of trademark owners and the interests of the public, the Trademark Law stipulates that a trademark owner does not have the right to restrain others from properly using such elements. If such elements are a part of one's trademark, the trademark owner can renounce the exclusive right to the elements in his trademark. Such a statement is called a trademark disclaimer.
As a small part of the Trademark Review Opinions, conduct surrounding trademark disclaimers was set forth in the Notice of the State Administration for Industry and Commerce on Issues Related to Trademark Review Opinions (notice), which was implemented in 2000. The notice specified circumstances where a trademark disclaimer may be needed. For example:
Article 3 – an exclusive trademark right shall be automatically disclaimed if it regards publicly known/used wordings included in a trademark application for an enterprise name.
Article 4 – an applicant shall disclaim the exclusive right to a generic name, graphic element, or an element that directly indicates the quality, main materials, functions and/or other characteristics of the goods bearing his trademark.
In 2002, the Regulations on the Implementation of the Trademark Law were released. This document no longer provided explicit provisions in relation to the Trademark Review Opinions. This indicated that the notice was no longer implemented. Although the exact term is not found in the current law, the right to disclaim the exclusive right to certain elements of a trademark has been kept in practice. An applicant may voluntarily disclaim the exclusive trademark right to a certain portion of his trademark application in the comment section of the trademark application form prescribed by the National Intellectual Property Administration. Courts will also consider the trademark disclaimer, if there is any, when trying trademark disputes.
Some trademark applicants might think that a trademark disclaimer is a guaranteed pass for registration because he can overcome any problem by disclaiming the questionable part of his trademark. This is a misunderstanding. There are many criteria applied in trademark examinations according to the current regulations such as the Trademark Law and the Trademark Examination and Trial Standards. For example, if a trademark application violates any prohibitive provisions, it will be rejected regardless of if a trademark disclaimer has been made.
Articles 10 and 11 of the Trademark Law list the detailed circumstances in which a trademark application will be rejected. In practice, a common ground seen in rejections is that a trademark application or some elements of a trademark application lack distinctiveness. The Trademark Examination Standards stipulate that if a trademark has a part that does not have distinctive features and the use of the trademark on the designated goods would easily cause the relevant public to misunderstand the characteristics of the goods, even if the applicant makes a trademark disclaimer, it should be rejected pursuant to the above-mentioned articles.
Another misunderstanding among trademark applicants is that the disclaimed portion of the trademark application would be excluded from consideration during the trademark examination and thus would not conflict with the prior rights of others. We will use the following example to demonstrate the development of judicial opinions on this particular point.
The Beijing Intellectual Property Court used to hold that it was not necessary to consider the disclaimed portion of the trademark when determining whether the trademark is similar to others. This viewpoint was inherited from the judgment (2011) Gaoxing Zhongzi No.1348 of the Beijing Higher People's Court, which recorded the following: "In addition, the cited trademark expressly disclaims the exclusive right to the portion of MAGISTRALNUTRITION, so pursuant to the law, the legitimate use of this wording by others cannot be restricted." The opinion was affirmed in an administrative lawsuit against the review of the rejection of the trademark application of "Materia" over the cited trademark "GNMaterials and device", which was heard by the Beijing Intellectual Property Court in 2015. Seeing the owner explicitly disclaimed the exclusive right to "Materials" in the cited trademark "GNMaterials and device", the court referenced the above-mentioned judgment No. 1348 and concluded in its judgment (2015) Jing Zhixing Chuzi, No.2610 that the owner of the cited trademark cannot restrain others from using the disclaimed portion of his trademark. The court also put forward that it is feasible to only compare the non-disclaimed portion, i.e. to compare the words "GN" and "the device part" of the cited trademark with "Materia" in the trademark application, when determining whether the two constitute similar trademarks.
The applied standards on similarity determination and the consequent ruling were opposed by the Trademark Review and Adjudication Board (TRAB) – the defendant in the case. In the appeal submitted to the second instance court, namely the Beijing Higher People's Court, the TRAB pointed out that although the owner of the cited trademark had disclaimed the exclusive right to that particular portion of his trademark, it did not have an effect on consumers. The disclaimed text would still be identified as a substantial part of the cited trademark in the eyes of consumers, and more importantly, it was similar to the trademark application. Thus consumers were likely to misunderstand the source of the goods of the two trademarks.
In the second-instance trial, the Higher Court accepted the TRAB's opinions and decided that the judgment No.2610 of the first instance was inappropriate with respect to similarity determination. The Higher Court then ruled in its judgment (2015) Gaoxing Zhongzi No.3299 that protection and use of a trademark should follow the principle of entirety and not involve separating the whole trademark into different components for protection. The disclaimed portion of the trademark should be considered as an indivisible part of the trademark and thus included in the overall comparison.
After the above-mentioned cases, the courts tend to adopt unified stands for similarity determination and gradually form coordinated opinions on how a trademark disclaimer may affect similarity determination. The mainstream view is now that the disclaimer statement is recorded in the trademark files, of which the relevant public is not aware, so the disclaimed portion will still be considered as a constituent part of the trademark during similarity comparison. To determine whether two trademarks are similar, overall observation is primarily adopted; comparisons between main constituent elements may come as a supplement. Comparisons may be made on aspects such as shape, sound, meaning, and overall effect, and should rest on the general attention of the relevant public. Even when the disclaimed portion of the trademark appears in a prominent position in the trademark, the "overall plus main elements" standards still apply. The disclaimed portion would still be considered as a main element, and the comparison would not be affected by the disclaimer.
Disclaiming the exclusive right to a certain portion of the trademark can also have a positive influence on similarity determination. A disclaimer statement can help examiners identify what the main elements and secondary elements are in a trademark, especially when the disclaimed elements do not seem to be in a prominent position.
In a trademark infringement case heard by the Shanghai No.1 Intermediate People's Court, the plaintiff had a registered trademark "欧普照明及图 (Opple Lighting and device)", in which the word "照明(lighting)" was disclaimed; the defendant had been using "欧普" on their own products. The court held in its final judgment (2010) Hu Yizhong Minwu (Zhi) Zhongzi No.17 that since the exclusive right to "照明" had been disclaimed, "欧普" was the main word part of the plaintiff's trademark. The defendant had been using the same characters on their products, which constituted use of a similar trademark. The defendant's use violated the plaintiff's exclusive trademark right. Thus, infringement was found.
The Beijing Intellectual Property Court also considers trademark disclaimers when determining what the main elements are in a trademark. For example, in a 2018 case the trademark applied for was "五联塑料件 (WuLian plastic part)", in which "塑料件 (plastic part)" was disclaimed, and the cited trademark which blocked the registration was "联塑 (Lian plastics)". The court pointed out in its judgment (2018) Jing 73 Xingchu No.3265 that plastic part is a common product in daily life and the corresponding word "塑料件" is a generic description. The relevant public would not split the three-character term into individual characters during trademark identification or comparison. In addition, the owner of the trademark in the dispute had disclaimed the exclusive right to the word "塑料件". The main element of the trademark in dispute should therefore be the word "五联 (WuLian)". Due to the obvious difference found in the main elements of the marks, i.e. "五联" of the trademark in dispute and "联塑" of the cited mark, the court held that the marks were not similar to each other.
In practice, the boundary between the main elements and other decorative or descriptive elements in trademarks is not always very clear, making it difficult for the examiner to categorise. In addition, there is a perception that the categorisation of the elements may be subjective and may vary among different examiners. It is possible that secondary elements will be mistaken for main elements in a similarity comparison. From the above cases, it is evident that a proper trademark disclaimer renouncing the exclusive trademark right to the non-distinctive or less distinctive portion of a trademark can serve as a clue to help examiners identify the main elements of the trademark, thus facilitating a more accurate comparison on similarity.
The purpose of a trademark disclaimer is to find a balance of rights and interests between the trademark owner and the relevant public, so that all market participants can use non-distinctive descriptions and generic elements in goods and services without worrying about the infringement of others' trademark rights. As a right holder, a trademark owner can disclaim his right to a certain portion of his mark. Although there are no explicit regulations at a legislative level, a unified understanding on the role and effect of a trademark disclaimer has been gradually formed in judicial practice through the judgments of courts at all levels over the past years. Trademark protection is based on the principle of entirety of a trademark. A trademark disclaimer does not necessarily exclude the disclaimed portion from being considered for similarity comparison. If the disclaimed portion does not play a significant role in the trademark and does not belong to any prohibitive scenario, the disclaimer statement would highlight the main elements in the trademark and thus help with similarity determination.
Jie He is an associate in AFD China's Trademark & Legal Department. She graduated from China University of Political Science and Law (Beijing, China) with an LLB degree in 2010, and obtained a JD degree from Lewis & Clark Law School (Portland, US) in 2015. Her areas of expertise include legal research, dispute resolution, and IP consultation for a diverse array of domestic and overseas clients.
Mengmeng Yu is an associate at AFD China. She is a patent attorney, registered plant variety rights agent and qualified legal practitioner who passed the bar exam. Her practice focuses on IP strategy, prosecution, and advice. Her role in the firm also includes acting as the client and media liaison. Yu holds a doctorate in biotechnology and a BEng in food science. She also worked as a visiting scholar at the Beltsville Agricultural Research Centre of the US Department of Agriculture, where she trained as a chemical analyst between 2009 and 2010.
Xia Zheng is president and founder of AFD China, and a patent attorney, trademark attorney and lawyer. She started her career in IP in 1987 and practices in many areas of the field, especially IP strategy, prosecution, post-grant proceedings and IP-related litigation. Zheng participates actively in the industry and is recommended as a leading practitioner by numerous publications, including MIP's IP Stars. She was named a National IP Talent in 2016, Beijing Outstanding Patent Attorney of 2014 and an Excellent Legal Professional of Haidian in 2012.