The Well-Known Trademark Protection in China1

    In August 1982, China enacted its trademark law, which went into effect in March 1983. In February 1993, about ten years later, the trademark law was amended in light of the social changes and the international rules involved. In October 2001, for its membership of WTO, China again amended its trademark law in accordance with TRIPS agreement, and other international conventions concerning trademark protection.

    In addition to the trademark law, there is an implementing regulation for the trademark law, which provides some specific rules, explanations, and additional provisions. Therefore, if one is going to consider "the trademark law" in China, he or she must consider both the law and its implementing regulation. The Implementing Regulation was enacted in March 1983, accompanying the trademark law, and thereof amended in January 1988, in July 1993, and in September 2002.

    There was no provision on the protection of well-known trademark in 1983 trademark law and 1993 trademark law. However, in the implementing regulation for the 1993 trademark law, there were some provisions concerning the protection of well-known trademark. For example, the 1993 implementing regulation provided something such as the trademark that was familiar to the public, the service mark that was familiar to the public. We interpreted these provisions as referring to well-known trademark, and well-known service mark. In August 1996, the Ministry of Industry and Commerce, of which the trademark office is one part, issued another administrative regulation in this respect, the Regulation on the Identification and Protection of Well-Known Trademark. Although the implementing regulation and the Regulation on the Identification and Protection of Well-Known Trademark had played an important role in the protection of the well-known trademarks in China, they were administrative regulations, not the law passed by the congress.

    In October 2001, the National People's Congress of China amended the trademark law, and established two articles on the protection of well-known trademark. Article 13 provides that the well-known trademarks either registered or unregistered shall be protected. Article 14 sets up several elements on how to identify a well-known trademark, such as the extent of the relevant public's awareness of the trademark, duration of the use of the trademark. The newly amended law also reflects the doctrine of dilution in certain degree in article 13, which provides that where a registered trademark is well-known one, it is prohibited to be registered and be practically used by others even if the registration or use is connected with different type of goods. It is no doubt that all these provisions are derived from Paris Convention and TRIPS Agreement. And for the first time the Trademark Law of China clearly provides the protection of well-known trademark.

    On the basis of the newly amended trademark law, the Ministry of Industry and Commerce again enacted its Regulation on the Identification and Protection of Well-Known Trademark in June 2002. This is an administrative guideline for the trademark office and the trademark review board to identify and protect the well-known trademarks. According to the Regulation, during a dispute settlement or a conflict of rights, the trademark owner may request the administrative agency that is settling the dispute or the trademark office to identify his or her mark as a well-known trademark. In turn whether a trademark is well-known mark or not is decided by the trademark review board. The identification is on the basis of case by case and its purpose is to resolve the dispute involved or the conflict of rights.

    2. Practice of Trademark Office and Courts in China

    In 1987, the Trademark Office of China identified first foreign well-known trademark, Pizza Hut, in an opposing procedure for a registration application. In 1989, the Trademark Office identified the first Chinese well-known trademark, Tong Ren Tang, the trademark for a manufacturer of Chinese medicine. This is far before the implementing regulation for the 1993 trademark law. From 1989 to 1995, still before the enactment of the Regulation on the Identification and Protection of Well-Known Trademark, another 19 well-known trademarks were identified. It is apparent that even in a period there was no provision in the law or the implementing regulation to protect well-known trademark, as a practice China did identified and protected the well-known trademarks.

    Since the enactment of the Regulation on the Identification and Protection of Well-Known Trademark, the work by the trademark office to identify the well-known trademarks has been done well. At the end of 1999, 196 well-known trademarks were identified. In the year 2000 and 2002, the trademark office identified some other well-known trademarks, including re-identification of some well-known trademarks, and remove of some well-known trademarks from the list. So at the end of 2002, the well-known trademarks identified by the trademark office, are up to 293.

    In the meanwhile, the judicial system in China occasionally identified some well-known trademarks on the basis of case by case. For example, in one case the court identified Ikea as well-known trademark, and in another case the court identified DuPont as well-known trademark. And as a practice, both the court and the trademark office recognize the well-known trademarks identified by each other.

    In China, both the trademark office and the courts have power to identify well-known trademarks. This practice is quite different from the practice in other countries, because in most other countries, it is the court that has the authority to identify well-known trademark on the basis of case by case. In China, the court does have the authority to identify well-known trademark. In addition to this, however, it seems that the trademark office, specifically the trademark review board, has played a more important role than the courts in this respect. There do have some reasons for this practice.

    One reason is rooted in the registration rules. According to the trademark law and the implementing regulation in China, if an applicant applied to register a trademark that is similar or the same to other's registered trademark, the trademark owner has a right to oppose the applicant's registration of the similar or the same mark. And in the opposing procedure, the trademark owner may request the trademark office, or specifically the trademark review board, to identify his or her mark as a well-known one. Thus, a lot of well-known trademarks are identified because of this procedure.

    Another reason is rooted in the dual system of the dispute settlement in China. In light of the provisions involved, if a registered trademark is infringed, the owner of the trademark can enforce his right by two channels. The first one is to request the administrative agencies of industry and commerce to investigate the case. And if the infringement is established, the agency will issue an injunction and may detain or destroy the infringing goods. The second channel is to file a case to a court and ask for remedies. If the court decides that the defendant infringed the plaintiff's trademark, the trademark owner may get remedies such as injunction, damages, and attorney fees.

    During the dispute investigation or the lawsuit, the trademark owner may ask the agency or the court to identify his or her mark as a well-known one. If his or her trademark is identified as a well-known one, the trademark may get more protection. Because many trademark owners in China prefer to settle their infringement disputes by the administrative system rather than by the judicial system, most cases concerning the identification of well-known trademark are filed in the administrative procedures. As a practice, whether a given trademark is well-known or not, is decided by the trademark review board rather than by an administrative agency that is dealing with the dispute investigation.

    3. Comments on the Practice of the Trademark Office

    At the beginning, the identification and protection of well-known trademarks by the administrative agency had at least two purposes. The first one was to protect Chinese famous brand, such as Tong Ren Tang, Peking Roasted Duck. The second one was to promote Chinese enterprises to create well-known brands and compete with foreign brands either domestically or internationally. For example, there was a movement around 1996 in China, which was called the movement to create famous brands. It was against this background that the Ministry of Industry and Commerce enacted the Regulation on the Identification and Protection of Well-Known Trademark and the trademark office identified many well-known trademarks through administrative procedure. As a result, the well-known trademarks identified by the trademark office were in most cases for Chinese trademarks.

    In the meanwhile, the governments in the provincial level and several ministries under the state council, such as the Ministry of Domestic Trade, identified their well-known trademarks through their administrative procedures. Therefore, there used to be a hierarchy of well-known trademarks in China, such as the national well-known trademarks, the local well-known trademarks, and the well-know trademarks within a special industry sector. Of cause, the most important level of the hierarch was the national well-known trademark identified by the trademark office. And as the time was going on, the governments in the provincial level and the Ministries have gradually given up their practice to identify the well-known trademarks.

    Since the enactment of Regulation on the Identification and Protection of Well-Known Trademark of 2002, the practice to identify and protect the well-known trademarks by the administrative agency has gradually returned to a right track. That means that the purpose of the identification and protection by the administrative agency is not for the promotion of famous brands but for the resolution of an infringement dispute or a conflict of rights. The identification by the trademark review board is on the basis of case by case.

    Another point shall be mentioned is that the identification practice by the trademark office is in most cases concerned with Chinese trademarks, rather than foreign trademarks. Because a well-known trademark can enjoy some privileges, and get much broader protection, the owners of foreign trademarks as well seek to get their trademarks to be identified as well-known trademarks by the trademark review board. They even argued that this practice, by identifying Chinese trademark rather than foreign trademark, violated the provisions of Paris Convention.

    The actually situation, however, is different from this argument. In light of the rules involved, the practice to identify well-known trademarks by trademark office is open both to Chinese trademark owners and to foreign trademark owners. There has never been a provision that the owners of foreign trademark are excluded from the identification practice by the trademark office since the enactment of the Regulation on the Identification and Protection of Well-Known Trademark of 1996. And in fact the first well-known trademark identified by the trademark office was Pizza Hut owned by a foreign enterprise.

    Because many owners of foreign trademarks are not familiar to settle their infringement disputes through administrative agencies, especially are not skilled at requesting the administrative agencies to identify their marks as well-known trademarks in the dispute settlement, up to date, there are only a few foreign trademarks identified by the trademark review board as well-known trademarks. Therefore, in order to change the situation that only a few foreign trademarks are identified as well-known trademarks by the administrative agency, the owners of foreign trademarks must adequately take use of the Regulation on the Identification and Protection of Well-known Trademark, and more frequently request the administrative agency to identify their trademarks as well-known ones.

    A well-known trademark, if it is identified, does have some privileges, and get more broad protection. In China, however, it seems that the owner of a well-known trademark enjoys too much privileges. For example, the owner may advertise his or her mark as well-known trademark, such as the national well-known trademark, or local well-known trademark. In contrasting, the owners of other trademarks are prohibited to advertise in this way. Another example is that once a mark is identified as the well-known trademark, it sends some information to the public that the goods or services related are high quality goods or services. It seems that the mark and the related goods or service have been approved by an authority agency, or have an official mark.

    Because of the identification practice by the trademark office and the privileges related to the well-known trademarks identified thereof, some problems did result from the practice.

    First, every trademark owner, in order to enjoy the privileges listed above, makes his or her best efforts to get his or her mark to be identified as well-known trademark, especially the national well-known trademark by the trademark review board. Against the background of the highly commercialized Chinese economy, some owners even took use of unclean hands to get their mark to be identified as well-known trademarks. Therefore some corruptions have occurred with the identification practice by the trademark office.

    Second, this practice resulted some different protection standards between the well-known trademark and the ordinary trademark. For example, there is another privilege for the owner of the well-known trademark in resent years in China. From the end of the year 2000, there was an action in China called "Anti-Counterfeiting goods action". This is mainly concerned with the well-known trademarks and the well-known trade names. In a period of time during this action, with respect to the criminal litigation, there were different standards for the well-known trademark and the ordinary trademark. If it is an ordinary trademark, the infringing goods must be worth of 100,000 RMB at lest. If it is a well-known trademark, there is no such requirement.

    For the problems above, it seems that the practice to identify the well-known trademark by the trademark office is lost the tenet for the protection of well-known trademark. So what is the purpose to identify and protect well-known trademarks?

    There are two basic doctrines for the identification and protection of well-known trademark in the world. The first one is to get an exclusive right on the trademark that has been used but not registered. Although a trademark owner may get his or her right by the use of the mark in a common law country, he or she can only get the exclusive right by the registration of the mark in a civil law country. If somebody else registered the mark before the trademark owner came to the country, the real trademark owner shall lose his or her right. Therefore, in light of article 6bis of the Paris convention, if a trademark is a well-known one, even if it is not registered in a member country, the owner may claim his or her right on the basis of the well-known within five years. If somebody else registered other's well-known trademark, the real owner of the mark can claim his or her right without time limitation.

    The second doctrine is against the dilution of the well-known trademark. According to this doctrine, the owner of a well-known trademark can prohibit others to use his or her mark in connection with different types of goods or services even if the use may not result any consumer confusion to the source or origin of the goods or services. In light of article 16, TRIPs Agreement, if a trademark is a well-known one, others are prohibited to use the trademark with the goods or services which are not similar to those in respect of which a trademark owner is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark, and provided that the interests of the owner of the registered trademark are likely to be damaged by such use. It is no doubt that this kind of use shall diminish the uniqueness of the well-known trademark, or whittle away or dilute the strong distinctiveness of the well-known trademark.

    On the basis of the two doctrines, the identification and protection of well-known trademark has no relation to the promotion of famous brands.

    4. Conclusion

    Generally speaking, a well-known trademark is identified by the judicial system on the basis of case by case. In China, however, in addition to the judicial system, administrative system has played an important role to resolve the disputes or the conflict of rights concerning a trademark. This is what we called " a dual system" to resolve the disputes and the conflict of rights concerning a trademark. In consequence, the administrative agencies can identify and protect the well-known trademarks.

    In light of the judicial practice and the Regulation on the Identification and Protection of Well-Known Trademark, a well-known trademark, identified either by the judicial system or by the administrative, is on the basis of case by case. There is no provision to in connection with the promotion of famous brand. Therefore, if we say that the identification and protection of well-known trademark in China did have some problems, the problems are not resulted from the dual system, but from the fact that some times the administrative agencies have not hold on the two basic doctrines for the protection of well-known trademarks.

    [01]This is the speech delivered by Prof. LI, Mingde, in ASEM Well-Known Trademark Protection Symposium, which was held in Singapore, February 11-13, 2004.