Attached are the comments of the Intelletual Property Law and International Law sections of the American Bar Association on the SIPO draft patent law amendments. A translation of the amendments was previously posted here.
The Southern California District Export Council will be sponsoring, and University of California – Irvine will be hosting a program on May 15, 2015 on “What You Must Know to Protect Your Intellectual Property in China.” There will be several experienced practitioners presenting. I will be doing the closing presentation.
A recent Beijing IP Court decision on “weixin” ( the Chinese name of WeChat) trademark has attracted wide discussion and debate in China. On March 11, the Beijing IP Court issued its first instance judgment on the dispute, affirming Trademark Review and Adjudication Board (TRAB)’s refusal to register the “weixin” trademark applied by Trunkbow Asia Pacific (Shandong) Co., Ltd. (“Trunkbow”). The court cited Art. 10.1.8 to rule that Trunkbow’s “weixin” mark, which has no bad faith intent, would have an “unhealthy influence” or “ill effect” on the existing and stable market order to potentially lead to false recognition among the public. What is particularly noted by the trademark community is that the court believes that allowing the earlier-filed mark to be registered would harm the public interest.
The facts were quite simple. Trunkbow applied for “weixin” two months before Tencent. Inc. (“Tencent”) publicly released WeChat 1.0 in January 2011. The court found that both parties applied for and used the “weixin” trademark without knowledge of the other’s use of “weixin” mark. The software developed by Trunkbow dropped the name of “weixin” in June 2011 while the WeChat social network application developed by Tencent achieved unprecedented success: the number of users rocketed to 400 million by July 2013 and rose to 800 million by November 2014.
The controversy circled around the court’s application of Article 10(1)(8) and its reasoning about the public interest. The court determined that WeChat or “weixin” had established a significant amount of public awareness on the social media market and the public had formed clear recognition of “weixin” and its association to Tencent. Registration of Trunkbow’s “weixin” mark would have unhealthy influence on the existing and stable market and public recognition of the origin of WeChat, which was representative of the public interest, and therefore Trunkbow’s “weixin” mark should not be registered.
This judgment received both appraisals and criticism. Major concerns towards this judgment relate to its overly broad interpretation of Article 10(1)(8) of the Trademark Law and its negative influence on the first-to-file trademark registration system in China. Opponents believe that determination of unhealthy influence should be based solely on the existing conditions at the time of trademark application. Besides, some commentator argued that Article 10(1)(8) is intended to put an absolute ban on use of signs which are considered as having unhealthy influence regardless of who would use the mark. Therefore, people concluded that it does not make sense for the court to allow Tencent to use “weixin” trademark but reject Trunkbow’s “weixin” mark citing this provision.
What is particularly interesting is that Judge Zhou Liting, who apparently wrote the court opinion, published an article defending the opinion. With respect to the particular point whether the huge popularity and reputation of weixin should be considered, Judge Zhou argued that circumstantial factors that had come into existence by the time the judgment was made in a trademark case should also be taken into account because a new public interest had been formed by then and would potentially be jeopardized. She cited the example of generic names as an example for such rational, i.e., if a disputed trademark has become a generic name by the time the judgment is issued, such trademark may not be eligible for registration.
Further, Judge Zhou argued that the registrability does not only just relate to similarity, but also relates to whether the trademark would negatively impact public interest or a stable market order. These considerations would not be in fundamental contradiction with the first-to-file principle.
Judge Zhou’s explanations were quite revealing. It appears that she has given some special consideration to the role of trademark that plays in Internet world. The judge seems to genuinely believe that if weixin mark is registered to someone other than Tencent, the potential confusion caused to 800 million Wechat users would be so significant that it reaches to a level that the court has to intervene under the grounds of public interest.
Whether or not such reasoning is widely accepted, this case vividly demonstrates the rising challenges in China trademark world. Cases such as iPad, Tesla and Michael Jordan all raised very challenging issues on both legal and policy front.
For years, foreign brand owners have been calling on Chinese trademark authorities and courts to recognize the overseas reputation of foreign brands in order to defeat bad faith trademark registrants. Courts have tried and delivered some encouraging results. But many more brand owners have faced continuing challenges.
A case like this weixin decision may raise some hopes for international brand owners. If the new Beijing IP court is willing to be more progressive in recognizing what counts as unhealthy influence, Art. 10(1)(8) may be completely revived to combat bad faith trademarks. But if this decision merely reflects some special consideration to huge popularity of a local Chinese Internet social media app, the case will have much more limited impact.
Here is Judge Zhou Liting’s response.
This blog was prepared by He Jin and Lyu Pei of the Anjie Law Firm, and first published on the firm’s website.