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Michael Jordan case re-heard by China Supreme Court today

April 26, 2016 the World IP day. Nobody would believe that China Supreme Court did not have any special intention to choose this day to re-hear Michael Jordan’s case on the ownership of the Chinese name for Jordan in China (“Chinese Jordan“).


History

Jordan Company, a local Chinese company engaging in sports appliances, registered the Chinese Jordan as a trademark in several Classes in China (“Disputed Trademarks“). In 2012, Michael Jordan, the famous NBA player, applied to cancel the Disputed Trademarks to China Trademark Review and Adjudication Board (“TRAB“) based on the ground that the Disputed Trademarks infringed his right towards his name.

TRAB rejected the application of Michael Jordan and sustained the Disputed Trademarks. Then Michael Jordan appealed the TRAB decision to Beijing No.1 Intermediate Court. After being rejected by Beijing No.1 Intermediate Court, Michael Jordan decided to appeal to Beijing Higher Court. Unfortunately, Beijing Higher Court still did not support his appeal. As the final remedy, Michael Jordan applied to the China Supreme Court to re-hear this case.

In December 2015, the China Supreme Court decided to re-hear 10 cases filed by Michael Jordan with respect to the ownership of the Chinese Jordan in China. As they are highly similar cases, the China Supreme Court decided to re-hear them together.


Oral hearing

The oral hearing was presided by the vice-president of the China Supreme Court, Tao Kaiyuan, and was heard by 5 judges at the China Supreme Court. At 9am April 26, 2016, Tao Kaiyuan declared the commencement of the oral hearing.

Major issues of this case

The chief judge, Tao Kaiyuan, summarised the major issues of this case as follows:

  1. the specific scope of protection of Michael Jordan’s name right in China;
  2. the popularity of the name of Michael Jordan in China;
  3. has Michael Jordan or Nike Company actively used the Chinese Jordan in China and whether this will affect the protection of Michael Jordan’s name right in this case;
  4. what is the legal ground for the protection of Michael Jordan’s name right;
  5. whether the Disputed Trademarks could mislead the Chinese consumers that they are related to Michael Jordan;
  6. whether the business operation of Jordan Company and the promotion, use and protection of the Disputed Trademarks by Jordan Company will affect this case;
  7. whether Jordan Company has obvious bad faith in registering the Disputed Trademarks;
  8. whether Michael Jordan was tardy in protecting his name right as claimed by him and how this will affect this case.

Arguments

The basic arguments of Michael Jordan and Jordan Company made during the oral hearing are as follows:

Michael Jordan

  1. Michael Jordan enjoys high popularity in China. Chinese public will think of Michael Jordan when they see the Chinese Jordan. The evidences submitted by Michael Jordan are sufficient to prove that the Chinese Jordan is well-known in China as the Chinese name of Michael Jordan and Michael Jordan confirms that others can use the Chinese Jordan to refer to him. The Chinese Jordan is the name of Michael Jordan and should be protected by the law.
  2. Jordan Company has the bad faith to hitchhike the great fame of Michael Jordan by building its entire business around Michael Jordan. They first registered the Chinese Jordan as trademarks in China, then they registered basketball images as trademarks in China, then they registered the jersey number of Michael Jordan as trademarks in China, and combine the Chinese Jordan and basketball image and use it on basketball shoes and other sports products. Jordan Company even registered the name of Michael Jordan’s family members as trademarks in China. Jordan Company also committed that they knew Michael Jordan before their trademark registration. Its bad faith is very obvious.
  3. The Disputed Trademarks can easily mislead the Chinese public that they are related to Michael Jordan and therefore has damaged the right of Michael Jordan. Investigation shows that 70% of the people being investigated believed that Jordan Company had special relationship with Michael Jordan.

Jordan Company

  1. The Chinese Jordan is not the name of Michael Jordan. He does not own any name right towards them.
  2. Michael Jordan never used the Chinese Jordan as his name before. There is no connection between them.
  3. Even if Michael Jordan and the Chinese Jordan has certain connection, there is no legal ground for Michael Jordan to claim the name right in this case.
  4. Michael Jordan licensed the relevant rights to Nike Company exclusively in 1990s. He has no right to claim damages.
  5. In the US and EU, a lot of trademarks containing “Jordan” have been successfully registered.
  6. Jordan Company invested great fortune in the Disputed Trademarks and the goodwill of Jordan Company built on them shall not be deprived of. Jordan Company started its business since 1992 and has been using the Disputed Trademarks for 24 years. Great money was spent on advertisement and numerous honors were awarded to Jordan Company. The trademark right enjoyed by Jordan Company is more stable, specific and real and deserves more protection and respect.

The oral hearing was finished at 13:12 today. The court did not make any judgement today and requested the parties to submit any supplementary opinions, if any, to the court within 7 working days.

Remember what the spokesman of China Trademark Office promised earlier this month? Well, there is a new way to get your Trademark Registration Certificate faster.

As we mentioned in our earlier post “Spokesman of China Trademark Office: all delayed Trademark Registration Certificates will be delivered by the end of May“, “it is expected that all delayed Trademark Registration Certificates will be delivered to the trademark owners by the end of May.”

Now it is close to the end of May but it is still unknown to us whether all delayed Trademark Registration Certificates have been delivered to the trademark owners, or what the progress is.

On April 21, 2016, China Trademark Office published a new announcement on its website declaring that it will adopt a new method of certifying the registration of a China registered trademark, which is, it will print out the Trademark Filing Documents of the concerned trademark and affix a special seal on them to certify the registration of such trademark. It has the same effect as the traditional Trademark Registration Certificate and can be obtained on-site at China Trademark Office.

So if you have not received your delayed Trademark Registration Certificate and you need it urgently, you can contact your China trademark agent to get the certified trademark filing documents which have the same effect as the Trademark Registration Certificate. China Trademark Office will not charge any fee for this service.

“Standard terms” for trademark registration, what does it mean?

As you can see from the Nice Classification, there are a lot of terms under each Class.

China Trademark Office requires that when filing a trademark application, the applicant must use the standard terms used in the Nice Classification or the China Classification. Otherwise, China Trademark Office will require the applicant to make revision to its satisfaction.

For example, “health food” is not a standard term. If you wish to register your trademark on health food, you may have to choose three standard terms to cover it, “health food supplements made principally of vitamins”, “health food supplements made principally of minerals”, and “health food supplements for persons with special dietary requirements”.

In order to avoid extra costs and time spent in the trademark application process, we strongly recommend our clients to use “standard terms” for trademark registration in China.

Having said that, China Trademark Office published a list of acceptable terms in 2017 which were regarded as non-standard terms and therefore were not acceptable before. Terms in such list are also acceptable to China Trademark Office.

What does “Class” mean?

For trademark registration purpose, the goods and services are categorized into different groups and such groups are called Classes. There are 45 Classes altogether.

In China, the classification of goods and services is set out in a List of Similar Goods and Services (“China Classification“), which is pretty much based on the Nice Classification (“International Class“) with certain additional items which are only available in China. For most foreign clients, it should be sufficient to register their trademarks in China based on the International Class.

Nice Classification

The Nice Classification (NCL), established by the Nice Agreement (1957), is an international classification of goods and services applied for the registration of marks. The 2017 version of the eleventh edition of the NCL is the current version which came into force on January 1, 2017.

For the details of the latest Nice Classification, please visit the following website:

http://web2.wipo.int/classifications/nice/nicepub/en/fr/edition-20160101/taxonomy/?mode=flat

The headings of all 45 Classes are as follows:

Class List of terms
1 Chemicals used in industry, science and photography, as well as in agriculture, horticulture and forestry; Unprocessed artificial resins, unprocessed plastics; Manures; Fire extinguishing compositions; Tempering and soldering preparations; Chemical substances for preserving foodstuffs; Tanning substances; Adhesives used in industry
2 Paints, varnishes, lacquers; Preservatives against rust and against deterioration of wood; Colorants; Mordants; Raw natural resins; Metals in foil and powder form for use in painting, decorating, printing and art
3 Bleaching preparations and other substances for laundry use; Cleaning, polishing, scouring and abrasive preparations; Soaps; Perfumery, essential oils, cosmetics, hair lotions; Dentifrices
4 Industrial oils and greases; Lubricants; Dust absorbing, wetting and binding compositions; Fuels (including motor spirit) and illuminants; Candles and wicks for lighting
5 Pharmaceuticals, medical and veterinary preparations; Sanitary preparations for medical purposes; Dietetic food and substances adapted for medical or veterinary use, food for babies; Dietary supplements for humans and animals; Plasters, materials for dressings; Material for stopping teeth, dental wax; Disinfectants; Preparations for destroying vermin; Fungicides, herbicides
6 Common metals and their alloys; Metal building materials; Transportable buildings of metal; Materials of metal for railway tracks; Non-electric cables and wires of common metal; Ironmongery, small items of metal hardware; Pipes and tubes of metal; Safes; Ores
7 Machines and machine tools; Motors and engines [except for land vehicles]; Machine coupling and transmission components [except for land vehicles]; Agricultural implements other than hand-operated; Incubators for eggs; Automatic vending machines
8 Hand tools and implements [hand-operated]; Cutlery; Side arms; Razors
9 Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking [supervision], life-saving and teaching apparatus and instruments; Apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; Apparatus for recording, transmission or reproduction of sound or images; Magnetic data carriers, recording discs; Compact discs, DVDs and other digital recording media; Mechanisms for coin-operated apparatus; Cash registers, calculating machines, data processing equipment, computers; Computer software; Fire-extinguishing apparatus
10 Surgical, medical, dental and veterinary apparatus and instruments; Artificial limbs, eyes and teeth; Orthopedic articles; Suture materials
11 Apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes
12 Vehicles; Apparatus for locomotion by land, air or water
13 Firearms; Ammunition and projectiles; Explosives; Fireworks
14 Precious metals and their alloys; Jewellery, precious stones; Horological and chronometric instruments
15 Musical instruments
16 Paper and cardboard; Printed matter; Bookbinding material; Photographs; Stationery; Adhesives for stationery or household purposes; Artists’ materials; Paintbrushes; Typewriters and office requisites [except furniture]; Instructional and teaching material [except apparatus]; Plastic materials for packaging; Printers’ type; Printing blocks
17 Unprocessed and semi-processed rubber, gutta-percha, gum, asbestos, mica and substitutes for all these materials; Plastics in extruded form for use in manufacture; Packing, stopping and insulating materials; Flexible pipes, not of metal
18 Leather and imitations of leather; Animal skins, hides; Trunks and travelling bags; Umbrellas and parasols; Walking sticks; Whips, harness and saddlery
19 Building materials [non-metallic]; Non-metallic rigid pipes for building; Asphalt, pitch and bitumen; Non-metallic transportable buildings; Monuments, not of metal
20 Furniture, mirrors, picture frames; Unworked or semi-worked bone, horn, ivory, whalebone or mother-of-pearl; Shells; Meerschaum; Yellow amber
21 Household or kitchen utensils and containers; Combs and sponges; Brushes [except paintbrushes]; Brush-making materials; Articles for cleaning purposes; Steelwool; Unworked or semi-worked glass [except glass used in building]; Glassware, porcelain and earthenware
22 Ropes and string; Padding and stuffing materials [except of paper, cardboard, rubber or plastics]; Raw fibrous textile materials; Tents, awnings and tarpaulins; Nets; Sails; Sacks
23 Yarns and threads, for textile use
24 Textiles and substitutes for textiles; Bed covers; Table covers
25 Clothing, footwear, headgear
26 Lace and embroidery, ribbons and braid; Buttons, hooks and eyes, pins and needles; Artificial flowers
27 Carpets, rugs, mats and matting, linoleum and other materials for covering existing floors; Wall hangings [non-textile]
28 Games and playthings; Gymnastic and sporting articles; Decorations for Christmas trees
29 Meat, fish, poultry and game; Meat extracts; Preserved, frozen, dried and cooked fruits and vegetables; Jellies, jams, compotes; Eggs; Milk and milk products; Edible oils and fats
30 Coffee, tea, cocoa and artificial coffee; Rice; Tapioca and sago; Flour and preparations made from cereals; Bread, pastries and confectionery; Edible ices; Sugar, honey, treacle; Yeast, baking-powder; Salt; Mustard; Vinegar, sauces [condiments]; Spices; Ice
31 Agricultural, horticultural and forestry products; Live animals; Fresh fruits and vegetables; Natural plants and flowers; Foodstuffs for animals; Malt; Raw and unprocessed grains and seeds
32 Beers; Mineral and aerated waters and other non-alcoholic beverages; Fruit beverages and fruit juices; Syrups and other preparations for making beverages
33 Alcoholic beverages [except beers]
34 Tobacco; Smokers’ articles; Matches
35 Advertising; Business management; Business administration; Office functions
36 Insurance; Financial affairs; Monetary affairs; Real estate affairs
37 Building construction; Repair; Installation services
38 Telecommunications
39 Transport; Packaging and storage of goods; Travel arrangement
40 Treatment of materials
41 Education; Providing of training; Entertainment; Sporting and cultural activities
42 Scientific and technological services and research and design relating thereto; Industrial analysis and research services; Design and development of computer hardware and software
43 Services for providing food and drink; Temporary accommodation
44 Medical services; Veterinary services; Hygienic and beauty care for human beings or animals; Agriculture, horticulture and forestry services
45 Legal services; Security services for the protection of property and individuals; Personal and social services rendered by others to meet the needs of individuals

Victoria’s Secret wins back its domain names in China

Facts

Victoria’s Secret (hererinafter referred to as “VS“) starts to sell its products in China since 1997. It has registered or purchased the “VICTORIA’S SECRET” trademark in Class 39, 42, 3 and 25 in China in 1995, 1997 and 2011 respectively. VS registered the domain name “victoriassecret.com” and has been using such domain name for its official website.

In 1999 and 2003, a Chinese woman Madam Wang registered the domain names “victoriassecret.com.cn” and “victoriassecret.cn” in her own name and used such domain names to set up websites to publish commercial advertisement, promotion and social information.

VS found out that Madam Wang had squatted many famous brands including Nike, Converse, Dupont, P&G, L’OREAL etc., which had been judged as infringing by several Chinese courts.

VS claimed that Madam Wang’s registration of the disputed domain names could mislead the consumers in China that her websites were owned by VS and therefore has infringed its trademark right towards “VICTORIA’S SECRET” and has constituted unfair competition against VS.

VS asked the court to order Madam Wang to stop the infringement activities, transfer the disputed domain names to VS, and the pay the compensation of RMB 200,000 to VS.


Defense

Madam Wang defended that:

  1. she registered the disputed domain names in 1999 and 2003, at that time, VS did not even enter into the China market and therefore was not known to the Chinese people. She did not have any bad faith to register such domain names;
  2. the “VICTORIA’S SECRET” trademarks are not well-known trademarks in China and therefore her domain names cannot infringe the trademark right of VS;
  3. the company name of VS cannot be an obstacle for her to register the disputed domain names because they are irrelevant under Chinese laws;
  4. she is not obliged to pay any compensation to VS because she did not infringe the trademark right of VS.

Decision of the court

After hearing, the Chaoyang court in Beijing decides that:

  • the earliest registration date of the “VICTORIA’S SECRET” trademark owned by VS is earlier than the registration date of the disputed domain names owned by Madam Wang and the “VICTORIA’S SECRET” brand has enjoyed high popularity in China after long term marketing and promotion in China. As the result, VS’ trademark right towards the “VICTORIA’S SECRET” trademark should be regarded as prior legal rights which should be protected by the Chinese laws.
  • Madam Wang used the prior registered “VICTORIA’S SECRET” trademark with high popularity in China as the main part of her domain names. Such action could be misleading to the Chinese consumers and has taken advantage of the goodwill of VS. Further, such action has prevented VS from registering its trademark as .cn domain names in the most neat and complete form, which caused the failure of VS to use such domain names for commercial activities in China.
  • Madam Wang failed to prove that she enjoyed any legal rights towards the disputed domain names and did not reasonably use such domain names. Her action cannot be justified.
  • Madam Wang had several domain name disputes with internationally well-known companies before and she was determined as having bad faith by several Chinese courts. As such, it can be inferred that she had bad faith in registering the disputed domain names in this case.
  • Madam Wang’s action should be determined as an unfair competition against VS but did not infringe the trademark right of VS.

Finally, the Chaoyang court determines that Madam Wang should stop using the disputed domain names and compensate RMB 100,000 to VS for its economic loss and expenses. The disputed domain names should be owned by VS.

After the judgement, VS did not appeal and Madam Wang is still considering whether to appeal.

China Trademark Office

China Trademark Office is the only government authority in China responsible for all trademark registration matters in China.

It is under the supervision of the State Administration for Industry and Commerce of China (“SAIC“).

China Trademark Office can be referred to as “CTO” or “CTMO”.

The official website of China Trademark Office is: www.ctmo.gov.cn or sbj.saic.gov.cn All other websites which are not ended with “.gov.cn” are not official government websites in China.

Separate from China Trademark Office, there is another government authority which is responsible for reviewing the decisions made by China Trademark Office. It is called the Trademark Review and Adjudication Board (“TRAB“). TRAB is also under the supervision of the SAIC. The trademark re-examination and trademark invalidation cases will be reviewed by the TRAB.

The official website of TRAB is: www.saic.gov.cn/spw/

What is the “first to file” principle?

China does not require “use” or “intention to use” for filing a trademark registration application. This means anyone can file any trademark for registration in China as long as it has not been filed by someone else in China before and does not breach any Chinese laws.

If two or more applicants file the same trademark application, the one who files first can be registered. The other applications will be rejected.

If two or more applicants file the same trademark application on the same day, the one who used the proposed trademark first can be registered.

If none of them had used the proposed trademark, they can negotiate and reach an agreement which will be recoganised by China Trademark Office.

If no agreement can be reached, China Trademark Office will determine who can have the trademark by drawing.

Who are these trademark “squatters”?

The possible trademark “squatters” include the agent and distributor of your products, your business partner or competitor, your employee, your trademark agent, your customer or other entity or individual which gets to know your trademark through business communications.

In addition to that, there are local Chinese who every day scan the Internet looking for foreign brands to register as trademarks in China. Some just go to exhibitions and collect brochures and business cards as a source of idea.

They do this because it is very profitable. It costs a local Chinese very little to register a trademark but a foreign company will often pay handsomely to recover it. It is fair to say that recovery of a trademark, if this is possible, will cost at least 10 to 50 times the cost of registering it in the first place.

What is trademark squatting? Why is it more serious in China than in other countries?

Trademark squatting means this: a third party registers your trademark before you do it in bad faith.

Trademark squatting is very serious in China mainly for two reasons: (a) China Trademark Law adopts the first-to-file principle in trademark registration, and (b) the Chinese law does not require “use” as a condition for the trademark registration.

Based on the above two principles, the applicant does not need to prove they have used or intend to use the applied trademark in order to register the proposed trademark in China. As long as there is no prior conflicting trademark and the applied trademark is registrable according to the law, China trademark registration authority will approve the registration. This will cause serious damage to the actual trademark owner and it is important to fight against such action as early as possible.

Which geographical areas are covered by a China trademark?

The geographical areas covered by a China trademark are limited to the Mainland of China only.

If you wish to get protections for your trademark in Hong Kong SAR, Macao SAR or Taiwan District, you need to register the trademark separately and respectively in each of these districts.