Chinese Enterprise Names Get Attention Under the Trademark Law and Unfair Competition Law


Website By MMLC Group, China
Firm's Profile & Articles Law Firm's Profile & Articles
Phone Call +86 (10) 8515-1091
The main function of the registered trademark is to distinguish the source of the goods or services. While the enterprise name, is the name card that distinguishes different commercial entities. Complications arise when enterprise names clash with third party trademarks.

In the practice, both of them are the important identification marks of the enterprises. Although the right of enterprise name and trademark are legally issued by the competent authorities, the exclusive right to use the registered trademark is granted by the Trademark Office, under the basis of the Trademark Law; and the right of enterprise name is based on Provisions on Administration
FIND MORE LEGAL ARTICLES
of Enterprise Name Registration, issued by the AIC at all levels. The difference of legal basis, right issuing authority, make the conflict of identification function between the right of enterprise name and trademark.

Both rights of enterprise name and trademark are protected by related laws. Under the current existing legal provisions, the settlement for conflicts between rights of enterprise name and trademark will follow the principle of good faith, fair competition and protection of prior rights. Especially, the principle of protection of prior rights has been fully reflected in the current laws and regulations in our country. Such as:

1. Article 32 of Trademark Law of the People’s Republic of China (2013 Amendment) (Effective on 1 March 1983, and amended on 30 August 2013) provides that no trademark application shall infringe upon another party’s existing prior rights. Nor shall an applicant rush to register in an unfair manner a mark that is already in use by another party and enjoys substantial influence.

2. Article 10 of the Notice of the Supreme People’s Court on Issuing the Opinions on Several Issues concerning Intellectual Property Trials Serving the Overall Objective under the Current Economic Situation (Effective on 21 April 2009) provides to properly handle the conflicts among registered trademark, corporate name with prior rights, stop the acts of unfair competition such us “copycat brand”; review the conflicts under the principles of good faith, maintain fair competition and protection of prior rights; although the party owns registration with legal forms, if its business name constitute trademark infringement or unfair competition, its use of trademark should be lawfully recognized as trademark infringement or unfair competition; no matter whether or not the party highlights the other’s registered trademark with high reputation on its business name because it is difficult to avoid market confusion, so the authority should make the decision to order the party to stop using the other’s registered mark in the business name and change the name. If the party refuses to do so, the authority should increase enforcement and compensation.

3. Article 4 of the Notice of Printed and Distributed for “Answers to Several Problems in the Trial of Conflicts between Trademark and Use for Enterprise Name” by the Beijing Higher People’s Court (Effective on 1 March 2008) provides that the trial of conflicts between trademark and the use of business name should follow the principle of good faith, and the legitimate rights and interests of the previous should be protected.

An Enterprise Name Constitutes a Trademark Infringement

Generally, in cases where the enterprise name infringes upon the prior trademark right, the following issues will be taken into account: whether the Respondent uses the enterprise name which is same or similar to the prior registered trademark in relation to the same or similar goods and/or services, and the use of enterprise name has caused confusion for the source of the goods and/or service, thus the Respondent’s behavior constitutes a trademark infringement.

1. How to Identify if the Enterprise Name Is Same or Similar to the Prior Registered Trademark

Generally, we need to check if the main part of the enterprise name is same or similar to the prior registered trademark in glyphs, pronunciations and meanings, and if the enterprise name is likely to cause the relevant public to mistakenly acknowledge the source of the goods or services, or the goods or services provided by the Respondent may have certain relationship with the owner and its prior registered trademark.

2. Whether or not the Respondent has predominantly used the main part of the enterprise name is same or similar to the prior registered trademark.

On the basis of precedents, judges generally will review the use of the enterprise name in its font type, size, color, location, frequency effect and meanings and so on, then judge whether the use of the enterprise name have reached the status of predominantly use, and the public have been impressed.

Although Article 20 of the Provisions on Administration of Enterprise Name Registration (Effective on 1 September 1991, amended on 9 November, 2012) provides that the signboard of an enterprise name of commerce, public catering or service trade may be duly simplified, only the simplified name shall be reported to the competent registration authority for record. However, if the use of the enterprise name constitute dominant use, such as unreasonable simplified use, enlarge use and/or use in large bold font and so on, and the public have been impressed on these words, then the use of the enterprise name cause confusion for the public on the source of goods/services, then the Respondent constitutes a trademark infringement upon others; in addition, if the prior registered trademark is a well-known trademark, the cross-class protection of well-known trademark will be applied.

An Enterprise Name Can Constitute an Unfair-Competition

Generally, in cases where the use of enterprise name infringes the prior trademark rights, it may also constitute unfair competition. To identify whether the use of the enterprise name constitutes unfair competition, we need to check whether the use of the enterprise name violates the principle of good faith, prior trademark right and the fair competition, and the use of the enterprise name has caused the public confusion.

1. Whether the use of the enterprise name is in bad faith

To examine the subjective malicious behavior of the Respondent, we can consider the following aspects: the reputation of the prior registered trademark. Such as, the Article 27 of the new issued Rules on the Prohibitions and Restrictions for Enterprise Name Registration (Effective on 31 July 2017) provides, that a well-known trademark recognized by the SAIC shall not be used by another practitioner in the same industry as its enterprise name, unless licensed by the owner of the said well-known trademark; whether the Respondent has contacted to or known well about the trademark owner before; whether the business scope of the enterprise is the same or similar to the designated goods/services in relation to the prior registered trademark; whether the Respondent uses the name of the enterprise as a trademark or not; whether the Respondent has changed the name of the enterprise, to make it more similar or identical to the prior registered trademark.

2. Whether or not the use of enterprise name constitutes confusion or misidentification

In the determination of trademark infringement, the main consideration is whether the prominent use of the enterprise name has constituted confusion with the prior registered trademark. Besides, the standard use of the enterprise name, business scope, business characteristics, actual business status will be also taken into account. That is to say, whether the use of the enterprise name make the relevant public confuse the source of the goods or mistakenly, and believe that there is a specific connection between the Respondent and the trademark owner.

For example, Paragraph 2 of Article 6 of new issued Anti-Unfair Competition Law (Amendment 2017) (Effective on 1 January 2018, amended on 4 November 2017) provides that a business shall not commit the following acts of confusion to mislead a person into believing that a commodity is one of another person or has a particular connection with another person: using without permission another person’s name with certain influence, such as the name (including abbreviations and trade names) of an enterprise, the name (including abbreviations) of a social organization, or the name (including pseudonyms, stage names and name translations) of an individual.

Responsibility of the Improper Use of Enterprise Name

Generally, the Respondent will be required by the related laws and regulations, to immediately cease acts of infringement, including the discontinuance of the use of prior registered trademark as part of the enterprise name and during promotions, and change its enterprise name.

Such as, Paragraph 2 of Article 18 of Anti-Unfair Competition Law (Amendment 2017) (Effective on 1 January 2018, amended on 4 November 2017) provides that if the name of the enterprise registered by the operator violates Article 6 of this Law, the enterprise name shall be promptly changed; Article 10 of the Notice of the Supreme People’s Court on Issuing the Opinions on Several Issues concerning Intellectual Property Trials Serving the Overall Objective under the Current Economic Situation (Effective on 21 April 2009)provides to properly handle the conflicts among registered trademark, corporate name with prior rights, stop the acts of unfair competition such us “copycat brand”; review the conflicts under the principles of good faith, maintain fair competition and protection of prior rights; although the party owns registration with legal forms, if its business name constitute trademark infringement or unfair competition, its use of trademark should be lawfully recognized as trademark infringement or unfair competition; no matter whether or not the party highlights the other’s registered trademark with high reputation on its business name because it is difficult to avoid market confusion, so the authority should make the decision to order the party to stop using the other’s registered mark in the business name and change the name. If the party refuses to do so, the authority should increase enforcement and compensation.

ABOUT THE AUTHOR: Sarah Xuan
Sarah is a Senior Associate in the MMLC Group.

Copyright MMLC Group
More information about MMLC Group

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

Find a Lawyer

Find a Local Lawyer