Anti Dilution: a powerful tool for well known mark protection in China

Rouse
Melanie Zhu and Cecilia Zhou
[email protected]; [email protected]

The protection of well known marks in China traditionally relates to the protection against acts causing consumer confusion. Recent developments reflect a growing recognition that the protection should be extended to acts that do not necessarily result in consumer confusion e.g. unauthorised use of the mark on dissimilar goods.

The concept of 'dilution' (used loosely here) is being introduced into trade mark law in China as a means of providing such protection. This article refers briefly to 'dilution' provisions in US, European and international laws, and considers development of the concept in China.

Anti dilution in US, European and international laws

Specific anti dilution provisions introduced into US trade mark law by the Federal Trademark Dilution Act 1995 prohibit the 'blurring' (the 'whittling away' of distinctiveness by unauthorised use of the mark on dissimilar goods) and 'tarnishment' (unauthorised use of the mark in a manner that reflects adversely on the legitimately branded product) of well known trade marks.

There are no specific anti dilution laws in the EU, but Art.5(2) of the Trade Mark Directive enables the owner of a well known mark to prevent use that takes unfair advantage of, or is detrimental to, the distinctive character or repute of his trade mark. This provision has been interpreted broadly by the Courts, e.g. the ECJ in L'Oreal SA and ors v Bellure NV and ors, to, in effect, prevent trade mark dilution.

Internationally, the closest we have to a unified 'dilution' provision is in the 1999 Paris Union for the Protection of Industrial Property and the WIPO Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (Joint Recommendation). The Joint Recommendation confirms that a mark will be deemed to be in conflict with a well known mark if its use is likely to impair or dilute in an unfair manner the distinctive character of the well known mark, or take unfair advantage of its distinctive character. The Joint Recommendation, however, merely recommends guidelines.

Anti dilution protection in China

Although the trade mark law complies with both TRIPS and the Paris Convention, it does not contain any express anti dilution provisions.

Nevertheless, Supreme Court Interpretations of the law have, in effect, introduced an anti dilution concept. Article 9 of the Interpretations of the Supreme People's Court on Several Issues Concerning the Application of Law to the Trial of Cases of Civil Disputes over the Protection of Well-known Trademarks (The Interpretations), which came into force on May 1 2009, interprets Art.13 of the Trademark Law (商标法)as follows: “Where the relevant general public would believe that the trademark on trial is associated with the well-known trademark, and as a result detriment is caused to the distinctiveness of the well-known trademark and the market reputation of the well-known trademark is derogated or unfairly utilized, this would fall within the circumstances provided for in paragraph 2 of Article 13 of the Trademark Law: '…misleads the general public and leads to possible damage to the interests of the registrant of that famous trademark'.”.

Case law on anti dilution in China

Since 2009, the Courts in China have begun to apply the anti dilution concept.

In a cancellation action brought by the Toshiba Corporation (Toshiba), the Beijing High People's Court read the concept of dilution into the phrase “mislead the public” in Article 13 of the Trademark Law in order to uphold a decision of the Trademark Review and Adjudication Board (TRAB). Toshiba applied to cancel a Class 5 registration for DONG ZHI TANG (Toshiba Hall in Chinese characters) in relation to 'medicines for humans', relying on its well known marks TOSHIBA and DONG ZHI ('Toshiba' in Chinese characters) used in relation to TV sets and related goods. In its judgment upholding TRAB's decision, the High Court expressly held that the use and registration of DONG ZHI TANG would “dilute and weaken the well known trade marks TOSHIBA and DONG ZHI”.

The concept of dilution was also applied in opposition proceedings relating to an application for registration of the mark 'YiLi and Chinese Characters' for 'sanitary devices'. The application was opposed on the basis of the well known mark 'YiLi and Chinese Characters' previously being registered in Class 29 in relation to 'dairy products'. TRAB dismissed the opposition, holding that 'sanitary devices' and 'dairy products' were so dissimilar that there would be no consumer confusion. On appeal, both the Beijing Intermediate Court and the High Court overturned TRAB's decision and ruled that even though the goods in question were dissimilar, use and registration of the opposed mark would be likely to dilute the well known dairy brand.

It is encouraging to see the Beijing courts applying The Interpretations and introducing the concept of dilution into Chinese trade mark law. It is unlikely, however, that the administrative authorities will follow suit in the absence of specific provisions in the Trademark Law. It is to be hoped that such provisions will be included in amendments currently under consideration.