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China: Trade marks: Will the court overstep the boundary of classification?

It is annoying for trade mark owners to find third parties' previous applications for identical trade marks approved by the China Trade Mark Office (CTMO) in the category of "dissimilar" goods. When the marks are identical and the goods and/or services are closely related, the trade mark owners of senior registrations, worrying about confusion and being taken advantage of, tend to oppose the previous applications.

To make things worse, this kind of opposition against published applications or invalidation actions against registered trade marks will mostly fail before CTMO and the Trade Mark Review and Adjudication Board (TRAB), because CTMO and TRAB stick to their own standards of similarities on goods and services.

CTMO has compiled a guide based on the Nice Classification titled "Classification of Similar Goods and Services". According to this guide, goods and services falling in different classes are considered dissimilar to each other. Within the same class, goods and services are divided into a number of sub-classes. Goods and services in the same sub-class are considered as similar. Goods and services in different sub-classes are usually considered dissimilar unless stated otherwise. The original purpose of the guide is to set guidelines for examiners in CTMO and TRAB to keep a consistent standard. However, a dogmatic adherence to the standard has created severe unfairness. For instance, goods are deemed dissimilar to services, so trade marks registered in the categories of coffee and food cannot block a third party from registering an identical mark in the category of café services. For the same reason, trade marks registered in the category of metal building materials cannot block a third party from registering an identical mark in the category of non-metallic building materials, and trade marks registered in "clothing" cannot block a third party from registering the same mark in stockings, caps, gloves and scarves. If efficiency is given priority during examination, fairness should be taken into serious consideration when it comes to individual opposition and invalidation cases.

Does this mean there is no hope at all? No: some court judgments in recent years have been encouraging. In these cases, the judges reasonably overstepped the boundaries set by the guide.

In R... and everything else v TRAB (third person: Ye Jianfeng) (2014), the judges in the first instance gave the following reasoning in their judgment:

Similar goods refer to goods that are similar in function, usage, trading channels, target consumers and goods that will usually be taken as closely related by the relevant public. When judging whether goods are similar, the court should base its judgment on the general knowledge of the relevant public. Classification of Similar Goods and Services can be used as a reference, but not the sole criteria for judging similarity between goods and services. Among the designated goods covered by the opposed mark, though swimwear and waterproof clothing in class 25 are not classified in the same class as those goods covered by cited mark 2 in class 28, swimwear and waterproof clothing are clothing with special functions … for wear in such activities as swimming, surfing and other water activities, and therefore such clothing [is] similar to surfboards and other apparatus falling in class 28. Co-existence of such two similar marks on those goods is likely to be misleading to the relevant public.

In Maurer Sohne GmbH KG v TRAB (third person: Wang Qingjie) (2015), the judges took a similar view:

the designated goods covered by the opposed mark are the requisite parts and fittings of the bearings and expansion joints which are closely related to those goods covered by the cited mark owned by the plaintiff. Those goods, which are identical in terms of function, usage, trading channels and target consumers, should be taken as similar goods. The opposed mark is identical with the cited mark, so the co-existence of such two identical marks in respect of those similar goods is likely to be misleading to the relevant public and hence cause confusion.

In BlueScope Steel v TRAB (third person: Chongqing Lai Shi Gang Jie Gou An Zhuang Gong Cheng You Xian Gong Si) (2017), the plaintiff lost in the opposition, the review and the following lawsuit for the first instance. In the second instance, judges reasoned that "although the services designated by the opposed mark do not fall in the same class as those goods designated by cited marks, all the designated goods and services fall within the category of architecture and construction".

These cases show us that judges are willing to reasonably depart from the criteria adopted in the guide for decades. Since the Beijing IP Court is contemplating establishing a judicial precedent system, such a breakthrough is particularly valuable and encouraging.

Miao TianLily C Lei

Liu Shen & Associates

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