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Supreme People’s Court (2014) Xingti Zi No. 9
According to Article 31 of the Trademark Law, applying for a trademark must not harm or adversely affect the existing prior rights of others. In this case, the Supreme People’s Court pointed out that the distinguishing part of a company’s trade name, if well-known to the relevant public within China, can be protected as legal prior rights under Article 31 of the Trademark Law.
According to the Judgment, when a trade name conflicts with a registered trademark, the conflicts shall be addressed according to specific facts of the case. As a general rule, if the highlighted use of a company name infringes upon the rights of a registered trademark, the company at issue shall be ordered to regulate the use of its own name. If the trade name has been used in good faith for a long time for history reasons, the company at issue may be allowed to continue the use of its existing trade name.
The company “Dabao Daily Chemical” uses the distinguishing part “Dabao” in its trade name, which is the same as the earlier “Dabao” trademark registered to be used on similar daily body care products. The judge reasoned that the trademark “Dabao” has strong distinctiveness, especially through years of advertising and publicity, and has gained a high reputation. When “Dabao” is mentioned, consumers will associate it with the owner of the trademark.
“Dabao Daily Chemical” manufactures and sells SOD honey and other cosmetics and detergent products. On the outer packaging, “Dabao” is put on the very front in an eye-catching way, while its own trademark “Beibei Xiong” is affixed on the back in very small characters. Therefore, the word “Dabao” in “Dabao Daily Chemical” is intended to distinguish the source of goods. In other words, the way that Dabao Daily Chemical Factor uses “Dabao” on the packaging is malicious, and intends to freeride the goodwill which the trademark “Dabao” owner has built for years. The malicious intent may easily lead the relevant public to confuse and misunderstand the source of their goods, or to think that there is a conflict between different producers. Therefore, the Judge found “Dabao Daily Chemical” to be liable for trademark infringement, and ordered “Dabao Daily Chemical” to use its trade name properly and reasonably.
However, as to the Plaintiff’s argument that “Dabao Daily Chemical” should stop using “Dabao” in the trade name permanently, the Court reasoned that “Dabao Daily Chemical” has been using its trade name for 20 years, and there is no evidence showing that “Dabao Daily Chemical” registered the trade name in a bad faith, and thus did not rule for the Plaintiff’s request.