China IP learned that Article 9 of the aforesaid Opinion provides that we shall strengthen the trial of cases about right confirmation of granted trademarks, and correctly handle the relationship between protection of trademark rights and maintenance of market order. We shall effectively curb improper squatting of others’ prior trademarks, strengthen protection of prior trademarks with certain popularity, and accurately apprehend the relativity attribute of trademarks, and shall not indiscreetly provide cross-class protection for registered trademarks which are not well-known trademarks.

According to the timeline of applications by both sides, Chery had already begun to apply and use the QQ trademark in 2003 and had acquired a certain reputation in 2005. At that time, regardless of its well-known status, the trademark of the plaintiff in Class 38 is not identical with or similar to the QQ trademark which has been actually used by the third party, to say nothing of association of goods. Therefore, will Tencent’s claim for the well-known status of the trademark and broader protection thereof be considered in line with provisions over well-known trademarks in the Trademark Law? There are different views in the community.

Main point of the dispute in the QQ trademark case

1. The latter part of Article 31 of the Trademark Law

The latter part of Article 31 of the Trademark Law provides that it is prohibited to, by illegitimate means, rush register a trademark that is already in use by another person. The relevant provision of this section has three main applicable elements: (a) “illegitimate means,” (b) “is already in use,” and (c) “has certain influence.”

The main point in debate in this case is whether it involves the use of “illegitimate means.” Wu Qiong, a partner at Kangxin Partners, P.C. said the “illegitimate means” has been expressly defined by Opinion on Several Issues Concerning Trial of Administrative Cases Involving Granting and Confirmation of Trademark Rights, released by the Supreme People’s Court. Namely, Article 18 provides that “in accordance with the Trademark Law, the applicant shall not preemptively register, through illegitimate means, a trademark which has been used by others and has acquired certain reputation. If the applicant knows or should have known a trademark that has been used by others and has acquired certain reputation, but the applicant preemptively registers the trademark, then illegitimate means may be deemed to have been used. A trademark which has been actually used in China and is known to the relevant public should be deemed as a trademark which has been used and has certain reputation. If there is evidence to prove that the prior trademark has certain periods of use in certain areas, sales volume and advertising, then it may be deemed to have certain influence. It is inadvisable for a trademark, which has been used and has certain reputation, to be granted protection for dissimilar goods.” Therefore, based on the judicial interpretation, Chery only need to prove that “Tencent has been aware of or should have been aware of the fact that Chery has used the QQ trademark for cars and has acquired certain reputation at the time of its application for the disputed trademark,” then it may be determined that “Tencent has used illegitimate means.” In determining whether Tencent “has been aware of or should have been aware of,” we may consider facts such as “Tencent had advertised QQ cars on its website prior to the application of the disputed trademark, i.e. on May 19th 2005.” Certainly, details of each piece of evidence should be analyzed carefully in terms of validity.

Chen Mingtao, a professor at the Law School of Beijing Jiaotong University, said of the issue that we should not blindly apply the entire Trademark Law or Article 31 of the Trademark Law. But in the current legal landscape, judges, lawyers and even scholars often blindly follow Trademark Law, for example in the iPad and Wanglaoji cases. We must attempt to ascertain all of the facts of the case in full, which are: 1) Chery itself is a well-known auto company in China; 2) Tencent has no intention to enter the auto industry; 3) Chery has been using the disputed mark extensively; 4) both parties have obtained certain reputation in their respective fields; and 5) if Tencent owns the trademark and enters the automotive industry, the existing market order will be undermined and market confusion will be caused.

2. Cross-class protection of well-known trademarks

In this case, Tencent stressed that the trademark in dispute owned by Tencent is a well-known trademark, which leads to the issue of cross-class protection of well-known trademarks. Wu Qiong said, first of all, declaration of well-known trademark adheres to the case-by-case principle. Although in one case the court has declared the No. 1962825 QQ trademark well-known for services in Class 38, it does not mean that Tencent has the trademark right to all goods and services and it should not be the absolute basis for Tencent’s registration of the disputed trademark for automobiles. The confirmation of rights over the disputed trademark should be based on an analysis of whether it has violated the provisions of the Trademark Law.

Wu Qiong said trademarks, in essence, carry corporate reputations. The protection of trademarks is the ultimate about the protection of corporate reputations. Corporate reputations mainly come from the goods or services that enterprises provide for their customers. Therefore, in dealing with the conflict between two high-profile trademarks, we should primarily take into account the service terrain of the goods actually used by the trademarks when determining the scope of protection of each trademark.

There are relatively clear viewpoints about cross-protection of well-known trademarks within the community. If a trademark is well-known in one area, it does not mean that its cross-class registrations will not be canceled. The purpose of protecting well-known trademarks is to avoid dilution, confusion and to maintain order in market competition. Chery has extensively used the QQ trademark in the auto sector and obtained certain reputation. If no customer confusion has been caused, it would make no sense to offer protection as a well-known trademark. That does not mean that Tencent has the right to prevent other companies from filing cross-class registrations. Chen Mingtao said that Tencent may be a well-known trademark, but in this case, the well-known status does not pull its weight, and that is the main reason behind the case-by-case declaration and passive declaration of well-known trademarks. Therefore, we should not blindly follow laws.

3. Whether it relates to illegitimate use

Does it constitute illegitimate use if Chery makes use of Tencent’s existing corporate reputation? Chery is a well-known Chinese automaker, and its use of the disputed trademark on autos has exploited the creativity and potentially the reputation of Tencent. Will permitting it to use the trademark be sufficient to cause market confusion and harm the market competition order? The answer should be negative. Because of the extensive publicity and use, Chery has not pushed the disputed trademark to the point where it will neither cause confusion with Tencent’s trademark nor cause customers to erroneously think that the two have some association. Moreover, the trademarks are in totally different classes and there is no possibility of undermining market competition order. As a matter of fact, the opinion of the Supreme People’s Court on trademark confirmation is also based on the same legal principle and purpose, namely, the existing clarity in market order and certain independent reputations. Consequently, we should not simply conclude that the disputed trademark constitutes confusion.

(Translated by Wang Hongjun)