Beijing Wei Chixue Law Firm--Analysis on the Impact of Applicant's Bad Faith on Trademark Similarity Determinations — Based on the Typical Trademark Opposition Case of HOUSE Curry

Yan WANG
Chinese Attorney-at-Law

Binghui WANG
Chinese Attorney-at-Law
Beijing Wei Chixue Law Firm

Forewords

It is well known that one of the most common issues in trademark right allowance and affirmation cases is whether a trademark constitutes a similar trademark used on identical or similar goods. The determination of trademark similarity is the basis for solving a large number of trademark disputes, and many circumstances in which the trademarks are considered similar to the prior marks are specified in Trademark Examination and Trial Guidelines that is newly implemented this year. In practice, however, because the actual trademark application is not a model, the Examination Guidelines cannot cover all possible scenarios, and it is frequently necessary to conduct a case-by-case analysis. At the same time, as China attaches more importance to intellectual property rights, the number of trademark applications continues to grow year by year, malicious imitation of applications and registrations continue to emerge, malicious imitation methods are constantly updated, and there are cases of malicious imitation that cannot be fully regulated in the examination process under the established examination guidelines, posing new challenges to both the trademark examination and the trademark agency profession. This article uses two of the “Typical Trademark Opposition, Review, and Adjudication Cases of 2020”—the cases of “好待百” and “梦多加喱”—as a springboard for additional discussion and valuable input. The authors of this article briefly discuss the impact of applicant’s bad faith on trademark similarity determinations in practice.

I. Case brief

The aforementioned typical cases are the oppositions we filed on behalf of HOUSE FOODS GROUP INC. (hereafter referred to as “HOUSE”) against the two trademarks “好待百”and “梦多加喱” applied by Nanjing Yaosheng Commercial and Trading Co., Ltd. HOUSE is a well-known Japanese corporation. Curry, seasonings, snack foods, and health foods are among its main products. Among these, its curry products have a sizable market share. Since its entry into the Chinese market, HOUSE has won numerous awards for its products, and its trademarks such as “好侍”, “百梦多”, and “味嘟嘟” have become familiar to the Chinese food industry and Chinese consumers. With the expansion of HOUSE's brand influence in recent years, malicious imitations and even knockoffs have emerged. The opposed party in this case, Nanjing Yaosheng Commercial and Trading Co., Ltd, applied for four trademarks of “好待百梦卶加喱”, “好待白梦卶加喱”, “好待百”, “梦多加喱” in succession which imitated our client’s trademarks “好侍” and “百梦多”, and they also applied for the trademark that imitated “古越龙山” and other well-known trademarks, which seriously jeopardized the rights of other legal prior rights holders, including HOUSE.

During the opposition preparation stage, we investigated the opposed party and discovered that the legal representative of the opposed party, the natural person YE Moufen established an individual business in Nanjing called “Nanjing Liuhe District Riyi Food Sales Center”. Another natural person Ye Moubo ran a business under the same tradename “Riyi”-“Nanjing Jiangning District Riyi food sales center”, and Ye Moubo also maliciously registered a number of other’s well-known trademarks. At the same time, Ye Moubo and another natural person Ye Moushui, who was found in the previous investigation by HOUSE to have repeatedly applied for the trademark that copied HOUSE’s trademarks “好侍” and “百梦多”, and also jointly invested and established Nanjing Huidefeng Food Trade Co. Ltd. And the malicious imitation applications from Ye Moubo, Ye Moushui and the opposed party “Nanjing Yao Sheng Trade Co. Ltd.” were all entrusted to Jinan Suying Intellectual Property Agency Co. Ltd., which can hardly be explained as a coincidence, and there is a great possibility that they are related to each other. Therefore, in these opposition cases, we claimed prior right on the trademarks “好侍” and “百梦多” and their popularity as well as the opposed party’s malicious imitation, including their malicious registration of a number of other well-known trademarks in addition to HOUSE’s, their possible connection with other malicious registrants, and the fact that they are in the same industry as HOUSE.

In this case, we encountered some difficulties in claiming that the trademarks are “identical or similar trademarks on the same or similar goods,” as specified in Article 30 of the Trademark Law. As shown in the comparison chart of the two opposed trademarks and the cited trademarks, there are clear differences between the two trademarks in terms of word composition, pronunciation, meaning, and overall appearance. If the two opposed trademarks are examined in isolation adopting the traditional trademark examination concept, generally they will not be determined similar to the cited trademarks.

Specifically, when comparing the opposed trademark “好待百” with the cited trademark “好侍” , it can be seen that they are only identical in the Chinese character “好”. Because the Chinese character “好” means “good”, it is frequently used in trademarks. The degree of similarity between the two is thus extremely low. Comparing the other opposed trademark “梦多加喱” with the cited trademark “百梦多”, the first character of the two is different, and they only share the same element “梦多”. The degree of similar is also low in terms of overall appearance, pronunciation, and meaning.

Nevertheless, if the two opposed trademarks are combined, the conclusion is different. In fact, the cited trademarks “好侍” and “百梦多” are frequently used together in practice. As the company HOUSE’s main curry brand, “百梦多” has a very high relevance to its tradename in Chinese “好侍”. The two opposed trademarks “好待百” and “梦多加喱” are the split and combination of the three elements of “好侍”, “百梦多” and “咖喱”. The opposed party obviously did it on purpose while being aware of the cited trademarks in order to avoid the similarity examination. Given that the opposed party also applied for the trademarks of “好待百梦卶加喱” and “好待白梦卶加喱”, we have every reason to believe that the opposed party’s application for the trademarks “好待百” and “梦多加喱” is also out of bad faith and is also intended to combine the two trademarks together after registration in order to achieve its improper purpose of imitating and free riding on the brand “好侍百梦多” of HOUSE. Therefore, the two opposed trademarks should not be examined in isolation, but be examined together and determined similar. Finally, the examiners approved our above claim, and decided the two opposed marks similar to the two cited marks in the two opposition cases and disapproved registration of the two opposed marks according to Article 30 of the Trademark Law.

II. Impact of applicant's bad faith on similarity determinations

In the examiner’s comments on the cases published in China Intellectual Property Journal, he pointed out: “For the behavior of applying for trademark registration by altering or splitting other people’s well-known trademarks, the examination is no longer in isolation which ignored the internal connection between the trademarks. Instead, the examination is made comprehensively by taking the series of trademarks applied with malicious intentions into account, and combining the opposition cases together in order to fully consider the factors such as similarity of two parties’ trademarks, the popularity of the prior trademarks and subjective intentions of opposed party so as to stop the act of taking free ride on the well-known trademarks and ensure the justice and fairness of trial results. The comment clarifies that if a trademark applicant has bad faith, the Trademark Office will no longer examine the trademark in isolation, but will consider the series of applied-for-trademarks the applicant filed out of bad faith as a whole, in order to effectively curb “taking free ride” behavior.

In fact, the examination of the applicant’s subjective maliciousness is also mentioned in the newly implemented Trademark Examination and Trial Guidelines. The chapter on examination and trial of identical and similar trademarks now includes section 3.2.4 on the examination of the subjective intention of the trademark applicant, which states that “The subjective intention of the trademark applicant shall be considered when determining whether the trademark is likely to cause confusion about the source of goods. When the trademark applicant has obvious bad faith, and the other factors are the same, it is more likely to cause confusion among the public.” This section elevates the malicious examination that has been applied in examination practice to the level of the clear stipulation in the examination guidelines, providing a guiding basis for the similarity determination of malicious imitation of trademarks. Although in the registration examination stage, due to the limitations of the similarity search system, if the malicious applicant applies for a trademark in which the word element is replaced, split and combined, it is often difficult to be discovered in the registration examination. As a result, in the current similarity examination, this type of highly concealed imitation may still slip through the net. However, the examination guidelines clarify the need to consider the subjective intention of the trademark applicant when determining whether the trademark is similar or not, which is still very favorable for the prior right holder to claim Article 30 in remedial procedures such as opposition or invalidation to defend their rights. Under certain circumstances, the success or failure of the proof of malicious intention may even have a direct impact on the outcome of the trial. At the same time, during the trial, taking into account the consistency of the subjective maliciousness, it is possible to link together multiple trademark applications of the same applicant that have been applied separately for evading similarity search, thereby saving examination resources to a certain extent, and realize “same judgment for the same situation” to avoid contradictory determinations during the examination.

III. Similar cases

Through search, it was found there are a number of cases of malicious imitation of trademarks similar to this one. For example, in the invalidation cases of the trademarks No. 19751004 “亖公” and No. 19751164 “牛亖”, the invalidation applicant, Bull Group Co., Ltd., claimed that these two trademarks are split of its well-known prior trademark “公牛” and constituted similar trademark to its prior trademark. While both “亖公” and “牛亖” are significantly different from “公牛” in terms of overall appearance, composing characters and pronunciation according to the examination guidelines, the examiner still determined that use and registration of the disputed trademark would cause confusion and misunderstanding among the relevant public in this case, and that the disputed trademark and the cited trademark constituted similar trademarks on similar goods as specified in Article 30 of the Trademark Law. The Decision also indicated that the majority of trademarks under the opposed party’s name were splits of other parties’ prior trademarks, “亖公”, “牛亖”, “亖南”, “孚亖”, “亖奔”, “腾亖”, “南目孚”, “目帝王”, etc. for which the opposed party had neither provided evidence to prove its true intention to use the trademarks, nor had it provided a reasonable source for its trademarks. As a result, the examiner concluded that the opposed party had an obvious intention to copy others’ trademarks, which would not only result in relevant consumers misidentifying the source of goods, but would also disrupt the normal administration order of trademark registration, undermining market order and fair competition. As demonstrated by the case, the registrant’s malicious imitation of multiple trademarks is commented in the examination. For malicious imitations of prior trademarks with high reputation through splitting or combination, the rights can be protected through Article 30 of the Trademark Law.

There are also some other similar cases such as trademark No. 29554386 “燕系” and No. 29529843 “京列” which are malicious imitations of the famous beer brand “燕京系列”; the trademark No. 14485987 “口壳喜” and No. 12817802 “牌力”“, which are malicious imitations of the trademarks “壳牌” and “喜力” of Shell; the trademark No. 31052871”马栗热活”, which imitated the trademarks “马栗露” and “热活马香膏” owned by a German massage cream brand; the trademark No. 19975987 “月融娇情及图” which imitated the series brands of the Anhui furniture brand “月娇”and “月娇融情” (The applicant of the disputed trademark also applied for trademarks No. 16274068 “娇情” and No. 16273939 “月融”), etc.

In practice, malicious imitation via splitting and combination is not limited to word trademarks, and device trademarks may also be imitated through this manner. The case shown in the table below is a case of splitting the prior trademark of another person and then applying for it. It is obvious that when these device trademarks are observed separately, they do not constitute similar trademarks with the prior trademark, and thus all of these trademarks are published. The prior right holder filed invalidations only after these trademarks were granted.

In the invalidation proceeding, the examiner recognized the applicant’s claim of trademark similarity and determined the registration of the disputed was through improper means, i.e. malicious imitation. According to the Decision, the applicant’s evidence could prove its trademark “ADNOC & device” has been used earlier in the petroleum industry. The disputed trademark is the portion of falcon device of the applicant’s trademark “ADNOC & device”. According to the facts established through investigation, the respondent and the original registrant of the disputed trademark applied for a total of 29 trademarks, the majority of which were imitations of the applicant’s prior trademark “ADNOC & device”. After obtaining a number of trademarks which are imitations of the applicant’s prior trademarks from the original registrant of the disputed trademark through trademark assignment, the respondent split the applicant’s prior falcon device trademark into several parts and filed for application. The respondent failed to provide evidence to prove its true intention to use the trademarks, nor did it provide a reasonable source for the trademarks, and thus its registrations cannot be said to be justified.

It can be seen that splitting or combining others’ prior well-known trademarks has become a relatively common means of malicious imitation at present, and this method is more concealed and it is extremely difficult to be discovered in the examination process of trademark applications. The prior rights holders often need to discover imitation in a timely manner through routine monitoring, and then defend their rights through the subsequent opposition and invalidation proceedings. The examination ideas applied to the typical cases of “好待百” and “梦多加喱”are reflected in the aforementioned other similar cases, and the series of the applied-for-trademarks filed out of the same subjective malice are considered as a whole, so as to combat more precisely the knowingly and repeated malicious imitation and free riding of the brand name and goodwill of others.

Closing

In March, 2021, China National Intellectual Property Administration (CNIPA) issued the notice Special Campaign Plan to Combat Malicious Pre-Emptive Registration of Trademarks, focusing on the special campaign to combat malicious preemptive application of trademarks, which has achieve great results. The Trademark Examination and Trial Guidelines, which took effect on January 1, 2022, carries on this spirit by imposing stricter regulation on malicious application. Driven by the interests of “free riding on a well-known brand-name,” malicious application persists despite repeated prohibition, which not only wastes administrative examination resources, but also imposes a huge burden to the rights protection of the prior rights holders. It is hoped that by conducting a strict examination of trademark splitting or combination based on the same subjective malice in examination, and through opposition, invalidation, and other remedy proceedings, the legitimate rights of prior rights holders will be better protected and a market environment characterized by fair competition, honesty, and trustworthiness, as well as a legal environment, will be enhanced.

References:
1. Trademark Invalidation Decision on Trademark No. 19751004 “亖公”
2. Trademark Invalidation Decision on Trademark No. 19751164 “牛亖”
3. Trademark Invalidation Decision on Trademark No. 29554386 “燕系”
4. Trademark Invalidation Decision on Trademark No. 29529843 “京列”
5. Trademark Invalidation Decision on Trademark No. 14485987 “口壳喜”
6. Trademark Invalidation Decision on Trademark No. 12817802 “牌力”
7. Trademark Invalidation Decision on Trademark No. 31052871 “马栗热活”
8. Trademark Invalidation Decision on Trademark No. 19975987 “月融娇情
及图”
9. Trademark Invalidation Decision on Trademark No. 16273939 “月融”
10. Trademark Invalidation Decision on Trademark No. 16274068 “娇情”
11. Trademark Invalidation Decision on the Device Trademark No. 33374129
12. Trademark Invalidation Decision on the Device Trademark No. 33390779
13. Trademark Invalidation Decision on the Device Trademark No. 41267538
14. Trademark Invalidation Decision on the Device Trademark No. 41267539
15. Trademark Invalidation Decision on the Device Trademark No. 33380488
16. Trademark Invalidation Decision on the Device Trademark No. 33376899