Riding through Rejections and Victories: Volvo s S80L Trademark Application IP UPDATE NEWSLETTER. Annamae Koo. Kevin Zhao.

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Rejections and Victories: Volvo s S80L Trademark Application Registrations of trade marks for a letter and number The Court also held that our client s mark S80L will not combination is difficult in

1 YOUR NEWSLETTER GREATER CHINA LAWYERS HONG KONG B E I J I N G issue Fandy Ip Kevin Zhao TRADEMARK ATTORNEY LLM, University of Edinburgh, UK LLB, Beijing Institute of Technology BSSc, Chinese University of Hong Kong JD, University of Hong Kong Riding through Rejections and Victories: Volvo s S80L Trademark Application Registrations of trade marks for a letter and number The Court also held that our client s mark S80L will not combination is difficult in China to obtain, and this is cause misidentification as to the quality or characteristics especially key to automobile clients. Our recent success in when being used on the designated goods as there was the Beijing Intellectual Property Court brings us one step no evidence showing that a combination of letters and closer to obtaining the trade mark S80L for Volvo in numerals, and more specifically our client s mark S80L, China. This is an appeal against the Trade Mark Review as used on land vehicles have become a common model and Adjudication Board (TRAB) s second review decision name which denote certain quality of land vehicles. after an appeal at the Beijing Higher People s Court. The Beijing IP Court accepted our argument that the mark This is in fact the court s first time to explain in detail the S80L does not carry any specific meaning itself and application of Article , which is a new article in the therefore is not deceptive to the public and should not be 2014 Trademark Law. prohibited under Article of the Trademark Law, Article is an article prohibiting use (as opposed to which prohibits the use of misleading and deceptive registration)of a trade mark and there has to be an marks in China. element of deception if it is to be applied. The court has emphasized that

2 Irene Liu CO-CHIEF OF BEIJING OFFICE BA, China University of Politics & Law Beijing, PRC PRC Trademark Attorney since 2001 Joyce Lee LLB, University of Bristol The Reduction of Damages by 95% for

to show that most of the profits made by New Balance case.

English marks, of trademark infringement by the U.S.

US$15 million) to RMB 5 million (approx. US$757,000). This is a 95% decrease.

worried that this would create an unwelcoming further incentive to the already notorious trademark squatting activities in China. quality of its products and its reputation.

2 2 Irene Liu CO-CHIEF OF BEIJING OFFICE BA, China University of Politics & Law Beijing, PRC PRC Trademark Attorney since 2001 Joyce Lee LLB, University of Bristol The Reduction of Damages by 95% for New Balance The Guangzhou Higher People s Court ( the Court ) has In its appeal, New Balance submitted a third party brand on 23 June 2016 rendered its judgment in relation to the evaluation report to show that most of the profits made by New Balance case. In this latest episode, although the New Balance during the period of infringement were in court did not overturn the lower court s decision of finding fact attributable to New Balance's other English marks, of trademark infringement by the U.S. sportswear giant, such as N, NB and New Balance, as well as the New Balance, the Court has greatly reduced the amount of damage awarded, from RMB 98 million (approx. US$15 million) to RMB 5 million (approx. US$757,000). This is a 95% decrease. Foreign brand owners and IP practitioners in China generally welcome this appellate court judgment, as many have seen the award of damages ordered by the lower court in 2015 as excessive and were worried that this would create an unwelcoming further incentive to the already notorious trademark squatting activities in China. quality of its products and its reputation. The Chinese character mark 新百伦 only contributed 0.76% to New Balance s overall profits in the China market and should only have made up to approximately US$228,000. By taking into account the brand evaluation report and all other factors, including but not limited to (i) the infringement by New Balance with knowledge of the mark in question; (ii) the duration of the infringement; and (iii) the fact that not all of New Balance's profits could be attributed to the use of the Chinese character mark "新百伦" alone, the Court reduced the award of The lower court s award of damages was half of New damages by nearly twenty fold. Such a decision is indeed Balance s profits recorded during the period of infringement. more in line with the earlier Supreme Court decision in the

3 3 Castel case in January this year to consider and award This appellate court decision once again reminds all damages reasonably, and to reduce it to a more brand owners of the risk when they are ill-prepared for acceptable level. the Chinese IP landscape. As we have shared with our Having said that, it is important to note that notwithstanding the reduction of damages, the Court maintained that New Balance s commercial use of the pre-existing Chinese trademark with knowledge was in bad faith. Although New Balance has acknowledged readers before, prior use is given very little or no relevance under the first-to-file system in China. Foreign companies should always file for their English mark and the equivalent Chinese character mark even before entering the Chinese market and a diligent trademark that they may consider taking the case to the Supreme search should be conducted before adopting a Chinese People s Court, as of now, New Balance has in effect lost character mark to avoid trademark infringement. For the Chinese character marks that it has been developing other key considerations, please refer to our previous for years. newsletter here.

4 Ann Xu CHIEF OF BEIJING OFFICE BA, University of Capital Normal, Beijing, PRC MIP, Franklin Pierce Law Center, USA PRC Trademark Attorney since 1998 Fandy Ip BSSc, Chinese University of Hong Kong

4 4 Ann Xu CHIEF OF BEIJING OFFICE BA, University of Capital Normal, Beijing, PRC MIP, Franklin Pierce Law Center, USA PRC Trademark Attorney since 1998 Fandy Ip BSSc, Chinese University of Hong Kong JD, University of Hong Kong Navigating Your Way Through International Trademark Applications in China - FAQs In this article, we will walk you through the problems that foreign trademark owners face when they seek to obtain their trademarks in China via international registration. 1. Will I get a registration certificate? No. Whether protection of the international registration to China is granted without any objection, or if it is granted after a favorable review decision or court decision, no registration certificate would be issued subsequently. The trade mark owner may, however, at its own initiative and with payment of official fees, obtain a certified copy of the registration certificate. 2. How can I register for the services retail or wholesale services? Under the NICE Classification (2016) as adopted in China, for amend the specification in the international registration to retail or wholesale services, only retail or wholesale services specification acceptable by the China Trade Mark Office for pharmaceutical, veterinary and sanitary preparations and re-designate in China, or re-file a national application. and medical supplies is acceptable. Any retail or Sales promotion for others, providing on-line market for wholesale services in relation to other goods would be buyers and sellers of goods and services, etc. are frequently rejected and a refusal would be issued. The applicant may used as alternatives. 3. What if the specification is not standard terms? Other than retail or wholesale services, the China Trade scope of protection of the trademark would be granted to Mark Office would not object to or request for amendment such sub-class accordingly. of specification of goods and services. This would result in specific items classified into a different sub-class as intended specific by the applicant, and given the gap in registration, third items being registered under international registration, which may otherwise be rejected if such items are filed nationally. For some trade mark owners, this may be preferable, since they would wish to include such specific items in license agreements or Customs recordation. It is not uncommon to see parties may register an identical trademark in such sub-class considered to be essential to the owner of the international registration. In practice, it is difficult to rebut the examiner s classification into sub-class. A down side is that there would be uncertainty in the scope of protection for specific items that do not fall squarely The specification should be drafted taking into account the within the sub-class system in China. Specific items would be sub-class system. Otherwise, filing a national application is assigned to a sub-class by the handling examiner, and the preferable to cover the essential sub-classes.

5 5 News alert! 4. How to calculate deadline for non-use cancellation filed against an international registration? Recently, some of our foreign clients have received directly the envelope may result in the difficulty in calculating the from the China Trademark Office the Notification of deadline and may lead to the shortening of the response Submission of Proof of Use (the Notification ) for non-use period, which is 2 months from the date of issuance from the cancellations filed against international registrations. Notification, and an addition of 15 days allowed for the For the purpose of calculating the deadline to file evidence deemed delivery of document via air mail. of use to defend the non-use cancellation, the date chop on the envelope serves as actual evidence of when the Do retain the envelope after receiving the Notifications in Notification was issued by the CTMO (previously, this was Chinese and contact us. evidenced by the WIPO delivery sheet). A failure to retain envelope with date chop. The below a sample of the Vivien Chan & Co., Newsletter issue 5, August 2016 All Rights Reserved. Please note that the information and opinions contained in this newsletter are intended to provide a general overview only, and should not be treated as a substitute for proper legal advice concerning an individual situation. We disclaim all liability to any person in respect of the consequences of anything done or omitted to be done wholly or partly in reliance upon the contents of this newsletter. Readers should make their own enquiries and seek appropriate legal advice on the particular facts and circumstances at issue.

PRC Trademark Law Implementing Regulations Issued. May 6, Draft

SIPS PRC Trademark Law Implementing Regulations Issued May 6, 2014 - Draft On April 29, 2014, the State Council issued amended Implementing Regulations to the Trademark Law (the New IRs ) as a companion