Conflict between Trade Name and Prior Registered Trademark
date: 2021-12-13 Chao Guo Read by:

    With the rapid development of economic level, enterprises are generally aware of the importance to add the establishment of trademark protection system to their business development plans. Nowadays, trademark agencies are blooming everywhere. Apart from obtaining comprehensive trademark registration system, the focus of major enterprises is tilting towards the management and protection system of registered trademarks. In practice, the conflicts between trade names and registered trademarks are quite often. Here, we would like to analyze the conflicts between later business names and prior registered trademarks in this article.

    In the enterprise preparation stage, name would be a very important issue; the "name" here includes both the name of the enterprise and the name of the core brand. After the company name is determined, it is submitted to the Administration for Market Regulation (AMR) for review and registration; after the brand name is determined, it is submitted to the State Intellectual Property Office for review and registration. Although both are granted after official review, they may still have conflict with the prior rights of other third parties. This article mainly analyzes the conflict between later trade names and earlier registered trademarks.

    In practice, I have handled amounts cases regarding conflicts between later trade name and prior registered trademark, the users of the later trade name will always hold a same point of view, that is, the trade name was approved by the SAIC (now renamed as AMR), a business license has been granted, so I have the right to continue to use the name as showed on the license. In fact, the AMR will not strictly review whether it conflicts with the previously registered trademark when reviewing the company name.  This might be caused by the difference between the registration authority and the review system.

    According to the provision of Article 58 of Chinese Trademark Law, the use of registered trademarks and unregistered well-known trademarks of others as the name of the enterprise name misleads the public and constitutes improper use. Competitive behaviors shall be dealt with in accordance with Chinese Anti-Unfair Competition Law.  

    According to the provision of Article 2 of Chinese Anti-Unfair Competition Law, In the production and business activities, operators shall follow Principles of voluntary, equality, fairness, and good faith, and abide by laws and business ethics.......

    According to the provision of Article 6(4) of Chinese Anti-Unfair Competition Law, 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:: ... (4) Other acts of confusion sufficient to mislead a person into believing that a commodity is one of another person or has a particular connection with another person.

    According to the above-mentioned legal provisions, the use of a prior registered trademark as company name is suspected to constitute unfair competition against the registrant. In addition to requiring a stable right to exclusive use of a previously registered trademark, the following factors need to be considered when determining whether its behavior constitutes unfair competition:

1.    The similarity between the trademark’s designated goods/services and the company’s business scope.

Whether there is a competitive relationship between the two entities is an important measurement factor. If they are totally different, and no connection can be proved, then the possibility of causing the related public’s confusion will be quite low.

2.    Whether the prior registered trademark has been used widely and obtained certain influence.

In unfair competition cases, maintaining a fair and sound market competition environment is a principle that shall to be implemented throughout. Regarding the registered trademarks that have not been put into actual use, even if the registration time is relatively earlier, considering that they have not formed a market competitiveness with the being protected trademark as the core value, and they do not have any reputation in the relevant industry, the court will hold a prudent opinion when making the judgment. From the perspective of the trademark's function of identifying the source of goods/services, such function is also difficult to achieve for unused marks, the consequences of misleading the related public would not be caused either.

On the contrary, for trademarks have been put into actual use and continuously promoted by the registrant to gain a higher reputation, especially in the vicinity of the location of the enterprise, the higher reputation they have, the possibility to cause confusion among consumers are higher, which means they are more likely to be protected.

According to the provision of Article 2(2) of “Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Civil Dispute Cases involving Protection of Well-known Trademarks”, in the following civil disputes, the parties use the well-known trademark as the factual basis, based on the specific circumstances of the case, the court considers that it is indeed necessary to determine whether the trademark in question is well-known: (1) ... (2) An action for trademark infringement or unfair competition brought on the ground that the name of an enterprise is identical with or similar to its well-known trademark; (3)......

Therefore, when a trademark right holder initiates an unfair competition lawsuit, he can simultaneously file a request for recognition of well-known trademark.

3.    Whether the owner of the company name has bad faith copying the prior registered trademark.

The subjectivity of the company’s owner is a very important supplement to the aforementioned factors. If a trademark registrant can submit evidence to prove that the other party has malicious intention of “free-ride” and attempts to plagiarize a prior registered trademark to attract relevant consumers and quickly gain market awareness, it will affect the court to some extent when determining whether constituting unfair competition.

    In summary, when a later company name conflicts with a prior registered trademark, the owner of the later company name may indeed constitute unfair competition against the registrant of the earlier trademark, but the competitive relationship between the two parties, the use of the trademark, as well as the subjective status of the owner of the trade name, needs to be comprehensively considered. If the owner of the trade name also involves using the suspected infringing trade name in a prominent way on product, their behavior might also constitute trademark infringement. Therefore, when companies improve the trademark management and protection systems, they can refer to the above factors to screen suspected infringers in the related industries and determine effective rights protection measures.



Kangxin IP Platform-One-stop Smart Solution for a full range of IP services




返回顶部图标