China has risen to be one of the most important markets in the world with its enormous population and growing purchasing power. Branding and marketing strategy become every business’ frontline in attracting customers. Compared to Roman languages, the Chinese language is much easier for Chinese customers to pronounce and memorise, so adopting and promoting a Chinese equivalent of a foreign language mark is critical for foreign businesses to shine in China’s market.
If a foreign business does not adopt a Chinese equivalent, the local Chinese media, consumers, or distributors will create their own, which may inevitably create a series of problems for the brand owner.
First, the locally created Chinese words may not have the pronunciation, expression, or connotations that the brand owner would like to present to the China market. Second, there is a risk that the general public would begin referring the foreign brand using the locally created words, instead of a chosen Chinese equivalent by the brand owner. Also, under China’s ‘first-to-file’ trademark system, failure to register a Chinese equivalent mark in time runs the risk of an unwelcomed third party squatting it, which often leads to laborious hours and significant money spent on retrieving the squatted mark.
In practice, registering the foreign language mark alone may not be sufficient to establish priority over its unregistered Chinese equivalent because a foreign language mark may not automatically be deemed similar to its Chinese equivalent.
An important lesson of securing protection of Chinese language marks can be learned from the New Balance case. New Balance registered its English mark ‘New Balance’ but neglected to register a Chinese equivalent timely. A Chinese individual registered the marks ‘Bai Lun in Chinese’ and ‘Xin Bai Lun in Chinese’ that later became the popularly recognised Chinese equivalent of ‘New Balance’. This individual sued New Balance and the courts found New Balance infringing.
To avoid these potential pitfalls, nearly all famous brand owners have selected, registered, and used their Chinese equivalent marks in China. For example, Apple uses ‘Ping Guo in Chinese’, which means apple in Chinese and Microsoft uses ‘Wei Ruan in Chinese’, which means micro software.
Both Apple and Microsoft literally translated their English marks as their Chinese equivalents. Transliteration is another popular way of creating a Chinese equivalent, which could be highly distinctive and have a similar pronunciation to its Roman letter mark. For example, Hilton uses ‘Xi Er Dun in Chinese’ and Armani uses ‘A Ma Ni in Chinese’.
In addition to literal translation and transliteration, combination of literal translation and transliteration is also widely used among foreign businesses in selecting their Chinese equivalents. A good example is ‘Lock & Lock’. Its Chinese equivalent is pronounced as ‘le kou le kou’, which means ‘happily locked’ and the repeated words also make it much easier for consumers to memorise.
In addition to various ways to select Chinese equivalent, it is important to corroborate that the selected Chinese equivalent does not have negative meaning or unwanted connotation.
Factors to be considered in trademark prosecution and litigation
In practice, the determination of similarity between a foreign language mark and Chinese language mark varies depending on the proceeding.
In substantial examination proceeding, the China National Intellectual Property Administration (CNIPA) mainly focuses on literal translation of a foreign language mark by referring to online dictionaries, such as Kingsoft dictionary. Thus, it is unlikely that examiners will cite transliterations of a prior mark or phonetically similar prior marks to block a new foreign language trademark application. To increase the likelihood of registration, it is advisable to conduct a clearance search for literal translations of the foreign language mark to ensure that there is no prior Chinese language mark with identical or similar meaning.
In refusal appeal proceedings, the CNIPA and courts apply a broader similarity examination scope, and the following factors should be considered according to the ‘Beijing High Court Guidelines for the Trial of Trademark Right Granting and Verification Cases’: (i) the ability of Chinese consumers to recognise the foreign language mark; (ii) the relevance or correspondence in meaning and pronunciation between the foreign language mark and the Chinese language mark; (iii) the distinctiveness, popularity, and ways of use of the cited mark; and (iv) the actual use of the mark in dispute.
In assessing ‘(i) the ability of Chinese consumers to recognise the foreign language mark’, the type of foreign language and the frequency of use of foreign words should be considered.
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“If a foreign business does not adopt a Chinese equivalent, the local Chinese media, consumers, or distributors will create their own, which may inevitably create a series of problems for the brand owner.” |
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Taking the ‘Little Black Dress’ case for example, the court held that the refused mark ‘Little Black Dress in Chinese’ and the cited mark ‘La Petite Robe Noire’ did not constitute similar marks because most Chinese consumers do not understand French, let alone knowing the Chinese meaning of the cited French mark. They would only recognise the cited French mark as a combination of Latin letters and would not associate it with a Chinese language mark.
In assessing ‘(ii) the relevance or correspondence between the foreign language mark and the Chinese language mark’, as one foreign word can be translated or transliterated into different Chinese characters and vice versa, when determining similarity between a foreign language mark and a Chinese language mark, their correspondence should be considered. For example, the ‘Forever Mark’ mark can be translated into ‘Yong Heng Yin Ji in Chinese’, while ‘Yong Heng Yin Ji in Chinese’ can also be translated into ‘Forever Mark.’ As ‘Forever’ and ‘Mark’ are both frequently used English words in China and Chinese consumers can readily understand the Chinese meaning of the mark and will likely associate the mark with its corresponding Chinese translation.
In reviewing invalidation and litigation proceedings, the courts apply a more comprehensive ‘likelihood of confusion’ judging standard. On top of comparison of marks per se, other factors may be considered, such as the cited mark’s distinctiveness, use and reputation, the relatedness of goods or services, and the registrant’s bad faith.
The courts look for a ‘stable’, as opposed to ‘sole’, corresponding relationship to be established between a foreign language mark and its Chinese equivalent. To achieve the ‘stable’ status, the brand owner needs to provide significant amount of evidence to prove that its foreign language mark and Chinese equivalent have been widely used over a long period of time, and the corresponding relationship has been established and known to the relevant public.
Typical cases
Having explained the above, we would like to share some selected typical cases that show how the courts apply the factors when determining similarity between a foreign language mark and its Chinese equivalent.
A common business practice mistake found in many typical cases involving the Chinese equivalent of a foreign language mark is that the brand owner does not have an ‘official’ Chinese equivalent for its foreign language mark.
This often leads to the public or media creating and using a Chinese version of the foreign language mark to refer to the brand owner and its products. This is considered as ‘passive use’ in contrast to the active use of a mark by the brand owner. In practice, the courts will examine whether the asserted ‘passive use’ is used against the brand owner’s will, and whether a corresponding relationship between the foreign language mark and its Chinese equivalent has been established. Further, the correspondence between a foreign language mark and its Chinese equivalent shall be in connection with the specific goods or services used.
In the Freddie Mac case, the China Supreme Court held that ‘Fang Di Mei in Chinese’, as one of the Chinese translations of ‘Freddie Mac’, has been widely used by Chinese media to refer to Freddie Mac, and has established a corresponding relationship with ‘Freddie Mac’ in the field of financial services despite there exists several other translations. This case highlights that the existence of several Chinese translations does not affect the establishment of corresponding relationship between one of the most popular Chinese translations and the foreign language mark.
In the Facebook case, the Beijing High Court held that, based on the third party evidence including Chinese media reports and general understanding of the Chinese relevant public, the ‘Lian Pu in Chinese’ mark was the corresponding translation of the Facebook mark when used on networking services. Although ‘Lian Pu in Chinese’ has its fixed meaning in Chinese, facial makeup in Chinese operas, when used in connection with networking services, it refers to Facebook, rather than any other entities.
A worse scenario of ‘passive use’ may happen when a Chinese distributor created a Chinese equivalent for the foreign brand and registered the Chinese equivalent on its own. This often results in unpleasant disputes because once the business cooperation between the foreign brand owner and the Chinese distributer ends, the Chinese distributor may start supplying identical products using the Chinese mark it created, which may inevitably mislead consumers about the origin of products.
An important tip to remember when enforcing or defending a case involving a Chinese equivalent is that the evidence proving the creation of corresponding relationship shall be either prior to the application date of the disputed mark or prior to the first use date of the accused mark.
In the New Balance case saga, New Balance attempted to invalidate the ‘Xin Bai Lun in Chinese’ mark by claiming ‘Xin Bai Lun in Chinese’ is a Chinese equivalent of ‘New Balance’, but the Beijing High Court denied New Balance’s appeal, finding that New Balance used ‘Xin Bai Lun in Chinese’ as the Chinese equivalent of ‘New Balance’ later than the application date of the ‘Bai Lun in Chinese’ mark owned by the registrant of the disputed mark. New Balance failed to submit sufficient evidence to prove the corresponding relationship between ‘Xin Bai Lun in Chinese’ and ‘New Balance’ was formed prior to the application date of the disputed mark.
In the Penfolds case, however, Treasury Wine Estates eventually prevailed in the invalidation action against the trademark squatter, who had registered the Chinese equivalent of Penfolds, ‘Ben Fu in Chinese’. The Beijing High Court held that the submitted evidence was sufficient to prove the corresponding relationship between ‘Ben Fu in Chinese’ and ‘Penfolds’ prior to the application date of the disputed mark.
Another important claim that can be asserted when enforcing trademark right involving the Chinese equivalent of a foreign language mark is that the Chinese equivalent can be protected as an unregistered well-known mark based on its well-established correspondence with its foreign language mark. For instance, Treasury Wine Estates, before successfully securing the registration of its Chinese equivalent, won an infringement action against a Chinese brewing company. Here, the local court affirmed the well-known status of ‘Ben Fu in Chinese’ as an unregistered mark based on its corresponding relationship with the English mark ‘Penfolds’, and held the defendants’ use of the accused ‘Ben Fu in Chinese’ mark constituted trademark infringement.
Takeaways
To better protect the Chinese language marks, it is recommended that:
The brand owner should create its own Chinese equivalent before entering the China market. If not, Chinese consumers or media will create its own Chinese version and squatters may even register them;
The brand owner should timely register its foreign language mark and Chinese equivalent as soon as possible. Those Chinese versions created by the media and public may also be considered and registered as trademark for defensive purposes;
The brand owner should regularly monitor Chinese equivalents in key classes and address squatting or counterfeiting problems in a timely manner; and
The brand owner should collect sufficient evidence to establish the use and fame of the foreign language mark as well as the corresponding relationship between the foreign language mark and its Chinese equivalent.
Click here to read all the chapters from Managing IP's China IP Special Focus 2022
Yan Zhang
Managing partner
Beijing East IP
T: +86 10 8518 9318
E: yan.zhang@beijingeastip.com
Yan Zhang is the managing partner of Beijing East IP Law Firm. Her practice focuses on trademark prosecution, enforcement and litigation, anti-unfair competition, Customs protection and domain name disputes.
Yan has handled many trademark prosecution matters before the Trademark Office, court appeals and infringement lawsuits before Beijing courts and other various courts across the PRC for Fortune 500 companies and leading multinationals.
Yan has successfully obtained well-known mark recognitions for some major clients before the Trademark Office, the Beijing First Intermediate Court, the Beijing IP Court and the Beijing High Court.
Austin Chang
Counsel
Beijing East IP
T: +86 10 8518 9318
E: austin.chang@beijingeastip.com
Austin Chang is a counsel at Beijing East IP Law Firm. He joined Beijing East IP Law Firm in 2012.
Austin’s practice focuses on trademarks, anti-unfair competition, anti-counterfeiting, copyright, and Customs protection. He has been providing services to Fortune 500 companies and leading multinationals for approximately nine years. During this period, Austin has been providing in-depth and creative analysis and advice to clients for their IP issues in China.
