The Keys on Handling the identical/Similar Business Name and Registered Trademark

The business name is administrated by SAMR, and the registered trademark is administrated by the Trade Office. These are two different administrative procedures, so nobody could check crosswise. How to defend rights when you encounter the identical/similar business name and registered trademark?

The first circumstance: a registered trademark is prior.

Article 1 of the “Interpretation of the Supreme People’s Court on Certain Issues Concerning the Application of Law to Adjudication of Civil Cases of Trademark Disputes” (FA SHI (2002) No.32) prescribes that using wording that is identical or similar to another’s registered trademark as a business name and displaying it prominently on identical or similar goods, thereby easily causing the relevant public to misidentify, shall be deemed as a registered trademark infringment behavior. Article 58 of the “Trademark Law” (Revised in 2019) prescribes that using other’s registered trademark or an unregistered well-known trademark as a business name to mislead the public which constitutes unfair competition shall be dealt with pursuant to the “Anti-unfair Competition Law”.

In view of the above, the first key is to choose an appropriate cause of action for civil case. The plaintiff could choose Disputes over Infringement on Trademark Rights, or Disputes over Unfair Competition. The difference between the two could refer an interpretation released by Beijing High People’s Court. The “Answers to Several Questions in the Trial of Disputes over the Conflict between Trademarks and Business Names” (Jing Gao Fa Fa (2002) No.357) stipulates that from the perspective of the nature of the infringer’s behavior, if the abuse of other’s prior trademarks or business names is covered by legal means, which infringes other’s reputation; and such behavior has misled the relevant consumers to misidentify the source of the goods or service, or recognize the different operators have affliated relationship; normally, such behavior shall be decided as a dispute over unfair competition. It also stipulates that using wording that is identical or similar to another’s registered trademark as a business name and displaying it prominently on identical or similar goods, thereby easily causing the relevant public to misidentify, and such behavior shall be decided as a dispute over infringement on trademark rights.

The second key is to prove “Misidentification” or “Misleading”. Different causes of action have different requirements on this factor. Regarding the infringement on trademark rights, the object of “Misidentification” is the relevant public; but regarding the unfair competion, the object of “Misleading ” is the public.

The third key is the litigation request, that is, whether the court will support the plaintiff’s claim for ordering the other party to change its name. Taking the “王将Dumplings Case” ((2010) Min Ti Zi No.15) for example, the Supreme People’s Court held that, if the defendant used other’s registered trademark with higher polularity as its business name, such behavior is illegal, and it is higly possbile to mislead the public, no matter whether the defendant has prominently used or not; and the court could order the defendant to stop using or change its name as claimed by the plaintiff. If the defendant registered its name legally, but it had prominently used the relevant words or characters, which infringed other’s trademark rights, then the court could order the defendant to use its name in a compliance way and stop the prominent using, instead of order the defendant to stop using or change its name.  

The second circumstance: an enterprise’s name is prior.

Article 21 of the “Rules of the Supreme People’s Court on Issues Relating to the Hearing of Administrative Cases Involving Granting or Affirming Trademark Rights” (Fa Shi (2017) No.2) prescribes that for a business name of a certain market popularity, if one applies for without permission registration of a trademark identical to or similar with the business name, which is likely to have relevant public confused with the commodity sources, and the party concerned claims constitution of prior right therefor, the People’s Court shall uphold the claim. In view of this, if a business name is prior, the plaintiff shall prove the name has certain market polularity. Taking “采蝶轩Case” ((2015) Min Ti Zi No. 38) for example, the Supreme People’s Court held that the plaintiff established its company with the name “采蝶轩” in June 2000, and the defendant registered its trademark on Dec., 31, 2002. However, the plaintiff had only established 5 stores before Dec., 31, 2002, in addition, its sales in 2003 was only CNY75,800, which could not be deemed as it had a certain market polularity. Therefore, the court rejected the plaintiff’s claim. This is a typical case on the second circumstance. For the same reason, if the enterprise’s name is lack of certain market popularity, it is difficult to claim on the objection or validation of other’s trademark, or unfair competition.

In general, as a business operator, each company shall take appropriate legal means to protect its business name and registered trademarks, such as registering a trademark timely, holding the above keys in handling relevant disputes.