Will Tencent Technology (Shenzhen) Co., Ltd. (Tencent) be planning to enter the auto industry? Does it have a great vision for the importance of “Internet of autos,” and is it preparing to occupy a powerful terrain in order to stand out later? Or it’s seemingly invincible IP team, which cannot tolerate even the slightest flaw in its achievements, remain determined to bring Chery Automobile Co., Ltd. (Chery) to its knees? Who knows? Maybe none of the above are their intentions, but the conflict between two “big names” in the industries has raised public concerns over the relevant issues.

Recently, the case over the QQ trademark in the auto industry between Tencent and Chery has caused quite a stir. Because the QQ trademark approved for goods such as autos has been canceled, Tencent brought the Trademark Review and Adjudication Board (the TRAB) to court and Chery was listed as a third person in the lawsuit. The case was heard before the Beijing No. 1 Intermediate People’s Court on July 16th 2013.

Tencent’s complaint

In its claims, Tencent requested the defendant to cancel ShangPingZi (2013) No. 04282 Decision on No. 4665825 QQ trademark and motioned the TRAB to render a new ruling.

The case goes originally back to 2009. Tencent, established in November 1998, is currently one of China’s largest Internet service providers. On February 10th 1999, Tencent launched “QQ99 beta build 0210 (Tencent QQ)” instant messaging service as well as the little penguin image into the market.

On August 31st 2001, Tencent Computer System Co., Ltd., affiliated to Tencent, applied for registration of thetrademark in Class 38 for services such as information transmission and computer terminals.

On the same day, an affiliated company of the plaintiff applied for registration of the trademark in Class 12 for goods, such as vehicle tires, motorcycles, tricycles, trolleys, small vehicles, strollers and bicycles, and was approved on November 14th 2002 with the registration No. 1977837.

On May 19th 2005, the plaintiff applied for registration of the trademark in Class 12 for goods such as autos and obtained registration on March 7th 2008 with the registration No. 4665825, namely, the trademark at issue in the lawsuit. The trademark was registered with normal font as compared with the artistic font in No. 1977837 trademark.

On November 26th 2009, Chery filed before the TRAB to cancel the trademark at issue on the ground that registration of No. 4665825 trademark violated the Trademark Law, first paragraph of Article 13 (the trademark of an identical or similar kind of goods is a reproduction, imitation, or translation of another person’s well-known trademark), Article 28 (identical and similar trademarks for the same kind of goods or identical goods) and Article 31 (infringe upon another person’s existing prior rights). The TRAB ruled that registration of the trademark at issue has constituted preemptive registration of a trademark that is already in use by another person and has certain influence, as set forth in Article 31 of the Trademark Law. Therefore, the TRAB ruled to cancel the trademark at issue.

“Continuation of trademark registration is also an expansion of registration for Tencent’s existing well-known No. 1962825 trademark for services in Class 38. From the perspective of application and registration, no “inappropriateness” exists. Meanwhile, when Chery began to use the QQ trademark for goods in Class 12, the plaintiff had already obtained the exclusive right to use the registered trademark No. 1977837 for the same goods, and Tencent’s No. 1962825 trademark had been well-known for services in Class 38.

Chery’s defense

Chery responded to claims by Tencent. Chery held that the disputed trademark No. 4665825 QQ and the prior registered No. 1977837 trademark are two independent and dissimilar trademarks. Therefore, Chery held that Tencent’s application for registration of the disputed trademark is neither a continuation of registration on the basis of its original figurative trademark, nor an expansion of registration for the mouse-like trademark in Class 38. Moreover, Chery held that as a matter of fact it has the prior and legitimate right to use the QQ trademark.

In early 2003 Chery filed an application for registration of thetrademark. In May 2003, more than 25,000 Chery QQ cars were sold, setting a record for the highest number of sales for a new car launched in a single year in China’s auto industry. In 2006, the word and design of Chery, and CHERY were declared as well-known Chinese trademarks. Based on the above, Chery held that Tencent filed an application for the disputed trademark in 2005 when the Chery QQ car had become a champion in sales among similar cars, and Tencent has not used the trademark for goods such as autos in Class 12. Moreover, Chery held that its trademark is neither identical with nor similar to Tencent’s trademark. Tencent’s mouse-like trademark is a combination of a circle and a mouse, and is classified as a design trademark by the search system of the China Trademark website, while Chery’s trademark QQ is simply made of simple letters, therefore, the two trademarks can be clearly distinguished.

In addition, China IP learned that Chery held that there was obvious inappropriateness in Tencent’s application for the disputed trademark. According to Chery, in November 2004, Tencent filed an opposition when Chery’s 3494779 trademark was preliminarily published. Therefore, Tencent was aware of Chery’s prior use and application of the QQ trademark when it applied for registration of No. 4665825 trademark in 2005. At this point, it was obviously inappropriate for Tencent to apply for the QQ trademark in Class 12.

The defendant TRAB

If we follow IP-related cases closely, it is not difficult to conclude that many cases get the TRAB involved. Records reveal that in the first six months of 2012, the TRAB heard and ruled on 29,189 cases of trademark review. The number of cases where parties were dissatisfied with TRAB rulings and filed administrative lawsuits before Beijing No. 1 Intermediate People’s Court totaled 1,335, accounting for 4.57% of all trademark review cases.

In the QQ trademark case, Tencent held that there was some insufficiency in the ruling. It is learned that Tencent held that the TRAB ruling was obviously erroneous and ran contrary to provisions of the Trademark Law, Trademark Review and Adjudication Rules and the spirit of the law as outlined in the Supreme People’s Court, according to the Article 9 of Opinion on Several Issues Concerning Serving of the Main Objective When Handling Intellectual Property Trials in View of the Current Economic Situation which was released by the Supreme People’s Court and protection provisions covering well-known trademarks in the Trademark Law.