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Recognition of Well-known Trademarks

By Rongwei Cai and Yuping Wang
[August 2003]

The legal term of “well-known trademark” first appeared in the 1883 Paris Convention for the Protection of Industrial Property (“Paris Convention”), which sets forth the principles for granting special protection to well-known trademarks.

Paris Convention does not specify measures for protection of well-known trademarks or their recognition procedures, leaving room for each signatory country to decide how it wishes to address these matters. Most countries do not process applications for recognition of well-known trademarks unless owners of such trademarks have demonstrated a need for such recognition, and most countries do not have a separate or independent application procedure for recognition of well-known trademarks.

In 1996, the State Administration of Industry and Commerce of China (SAIC) published the Interim Rules on Recognition and Protection of Well-known Trademarks pursuant to the Trademark Law of the People’s Republic of China (“Trademark Law”), and its implementation rules (“1996 Rule”), which was amended in 1998. Pursuant to the 1996 Rule, owners of certain trademarks could apply for recognition of well-known trademarks on a routine basis. Nearly 200 Chinese trademarks were recognized as well-known trademarks under the 1996 Rule.

On April 25, 2003, SAIC promulgated a Rule on Recognition and Protection of Well-known Trademarks (“Recognition Rule”) to standardize the procedure for the recognition of well-known trademarks. This Recognition Rule, effective June 1, 2003, repealed the 1996 Rule, and stipulated a recognition procedure initiated by an owner of well-known trademarks demonstrating the need for protection.

Definition of Well-known Trademark

Recognition Rule defines a “well-known trademark” as a trademark that is “widely known to the pertinent general public and enjoys a relatively high reputation.” The rule further clarifies “pertinent general public” to mean consumers, manufacturing operations, and persons involved in the sales, of the goods or services bearing such trademarks. Recognition Rule eliminated the requirement of the 1996 Rule that a well-known trademark be a registered trademark; and changed “widely known to the market” to “widely known to pertinent general public” in defining the term “well-known trademark” — a much better definition.

Special Protection for Well-known Trademarks

In accordance with the Trademark Law, special protection granted to well-known trademarks includes the following:

1. The owner of a well-known but not yet registered trademark may prevent others from registering trademarks that are the same as, or similar to, the well-known trademark in identical or similar categories of goods or services;
   
   
2. The owner of a well-known registered trademark may prevent others from registering trademarks that are the same as, or similar to, the well-known trademark in all categories of goods or services;
   
   
3. The owner of a well-known registered trademark may prevent others from incorporating the well-known trademark in the name of their enterprises;
   
   
4. The owner of a well-known registered trademark is not restricted by the five-year time limit for bringing cancellation actions against trademarks registered in bad faith, while such five-year time limit applies to ordinary trademarks; and
   
   
5. In infringement cases, courts or administrative bodies tend to grant larger awards to owners of well-known trademarks, and subject infringers to more severe punishment.

When to Apply for Recognition of Well-known Trademarks

Under the Recognition Rule, owners of trademarks may apply to either the Trademark Office or Trademark Review and Adjudication Board (TRAB) for recognition of their trademarks as well-known trademarks when one of the following needs arises:

1. Contesting Registration of Identical or Similar Trademarks: If the owner of a well-known trademark discovers that another person or company has applied for registration of a trademark which is a reproduction, imitation or translation of its well-known trademark, or is so similar to its well-known trademark as to cause confusion, the owner of the well-known trademark may contest the registration by submitting to the Trademark Office an application for recognition of its trademark as well-known trademark. If the well-known trademark has not been registered in China, its owner may only contest the other person or company’s registration for identical or similar categories of goods and/or services. If the well-known trademark has been registered in China, its owner may contest the other person or company’s registration for any categories of goods and/or services, irrespective of their identity or similarity.
   
   
2. Requesting TRAB to Cancel a Registered Trademark: If the owner of a well-known trademark discovers that another person or company has registered a trademark which is a reproduction, imitation or translation of its well-known trademark, or is so similar to its well-known trademark as to cause confusion, the owner of the well-known trademark may request TRAB to cancel that person or company’s registration by submitting an application for recognition of its trademark as a well-known trademark. If the well-known trademark has not been registered in China, its owner may only request cancellation of the other person or company’s registration for identical or similar categories of goods and/or services. If the well-known trademark has been registered in China, its owner may request cancellation of the other person or company’s registration for any categories of goods and/or services, irrespective of their identity or similarity.
   
   
3. Requesting SAIC to Stop Unauthorized Use of Identical or Similar Trademarks: If the owner of a well-known trademark discovers that another person or company is using a trademark which is a reproduction, imitation or translation of its well-known trademark, or so similar to its trademark as to cause confusion, the owner of the well-known trademark may request SAIC at city or higher level (“Local SAIC”) to stop the use of the trademark by submitting an application for recognition of its trademark as a well-known trademark. Upon reviewing and approving the application, Local SAIC will submit the application to SAIC at the provincial level. If the well-known trademark has not been registered in China, its owner may only request SAIC to stop the other person or company’s use of the trademark for identical or similar categories of goods and/or services. If the well-known trademark has been registered in China, its owner may request SAIC to stop the other person or company’s use of the trademark for any categories of goods and/or services, irrespective of their identity or similarity. In the event that it finds for the owner through its review, SAIC or the responsible Local SAIC must submit the application for recognition to the Trademark Office within 15 working days from its receipt, and take timely and appropriate action to stop the unauthorized use.

Under any of the above stated circumstances, the Trademark Office must reach a decision on granting recognition within six months from the date of receipt of an application for recognition of a trademark as well-known trademark.

Evidence Supporting Application for Recognition of Well-known Trademarks

In examining an application for recognition of well-known trademarks, Trademark Office and TRAB are authorized to consider the totality of the following factors, rather than require an applicant to meet each and every one of them:

1. The extent to which the trademark is known to the pertinent general public;
   
   
2. The consecutive period of time during which the trademark has been used;
   
   
3. The consecutive period of time during which promotion of the trademark has been conducted, and the extent and geographic boundaries of the promotion;
   
   
4. Records showing that the trademark has received protection as a well-known trademark; and
   
   
5. Other factors that may evidence that the trademark is a well-known trademark.

In line with the above, owners of trademarks applying for recognition as well-known trademarks may submit documents evidencing satisfaction of each of the factors. With respect to factors 3, 4 and 5, documents which may help to support an application for recognition include those evidencing:

Factor No. 3: Methods, geographic areas and media channels for advertising and marketing activities, and volume of advertisement publicized.

Factor No. 4: That the trademark has been protected as a well-known trademark in China or in other countries or regions.

Factor No. 5: The production volume, sales volume, sales revenue, taxes paid on profits, and sales regions, of the products bearing the trademark for the past three years.

Unlike the 1996 Rule which required all applicants to submit the same documents as stipulated, the Recognition Rule provides guidelines for applicants to decide what supporting documents to submit. This is a reflection of SAIC’s realization that certain trademarks may already be so well-known that their owners should not be required to present the same evidence as owners of less known trademarks. Consequently, owners of very well-known trademarks are released of the undue burden of submitting unnecessarily large amount of documents to support their applications.

About DWT
Being the first U.S. law firm to obtain approval from the Ministry of Justice to set up a representative office in Shanghai, China, we have extensive experience in assisting U.S. companies in their investment projects in China. Depending on your business needs and applicable legal and investment environment in China, we can provide:

• Legal analysis for investment and management structure
• Legal due diligence
• Document preparation in English and Chinese
• Contract negotiation
• Licensing agreements and other agreements for intellectual properties such as trademarks, brand names, technology and software
• Advice on approval procedures and related matters
• Advice and documentation of employment related matters for your operation in China, including employment contracts, non-compete, non-solicitation and confidentiality agreements
• Legal compliance matters for your operation in China, such as taxation, social benefits and insurance and other statutory requirements
• Legal training for Foreign Corrupt Practices Act regarding its impact on China operations of U.S. companies

Published by DWT's China Practice Group

If you have any questions or would like to discuss the implications of this Advisory Bulletin in more detail, contact the authors:

Rongwei (Ron) Cai, Shanghai, (011) 8621-6279-8541, roncai@dwt.com
Yuping Wang, Shanghai, (011) 8621-6279-8438, yupingwang@dwt.com

For further information, please contact:

Zhi-Yin James Fang, Los Angeles, (213) 633-6847, jimfang@dwt.com
R. Z. Margaret Lu, New York, (212) 603-6447, margaretlu@dwt.com
J. H. Jerry Zhu, New York, (212) 603-6458, jerryzhu@dwt.com
James M. Mei, Portland, (503) 778-5315, jimmei@dwt.com
Ronald K. Ragen, Portland, (503) 778-5301, ronaldragen@dwt.com
Allen D. Clark, Seattle, (206) 628-7630, alclark@dwt.com
Matthew D. Latimer, Seattle, (206) 903-3946, matthewlatimer@dwt.com
Rongwei (Ron) Cai, Shanghai, (011) 8621-6279-8541, roncai@dwt.com

This China Practice Advisory is a publication of the China Practice/Shanghai Office of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent legal developments in China. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

Copyright © 2003, Davis Wright Tremaine LLP.

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