Judicial Recognition of Well-Known Trademarks in China May Be Tightened Up

On April 23, 2009, the PRC Supreme People’s Court (SPC) issued its Judicial Interpretation of Several Issues Regarding Application of Laws in Well-Known Trademark-Protection-Related Civil Disputes (Interpretation). The Interpretation addresses various issues relating to well-known trademark recognition that have surfaced since the Provisions for the Determination and Protection of Well-Known Trademarks were issued by the State Administration for Industry and Commerce on June 1, 2003 (2003 Provisions). The Interpretation became effective on May 1, 2009.

The Interpretation, when implemented, is likely to reshape the judicial scheme for recognition of well-known trademarks set forth by the 2003 Provisions. Proposed changes include the following: (1) causes of actions for recognition of well-known status will be limited to trademark infringement and unfair competition claims recognized under applicable law, excluding (a) trademark or unfair competition claims not explicitly recognized under applicable law or (b) cases where the well-known status of the mark has no material bearing on the outcome of the case; (2) the well-known status will not be confirmed by the principal text of a court judgment or in writing in a court-administered settlement adjudication, which will prevent the res judicata doctrine from applying for future cases; and (3) trademark holders and owners will bear the burden of proof of establishing well-known status, and courts should not make a well-known determination based solely on the alleged infringer’s admission, to prevent, in part, potential conspired phony lawsuits designed to establish the well-known status of certain marks.

Notably, the issued Interpretation omitted at least one key provision from the draft circulated on November 11, 2008. Specifically, the Interpretation omitted the well-known status of the mark outside China as a factor in recognizing well-known status in China. Thus, the Interpretation confirms that the 2003 Provisions will continue to define Chinese and China, respectively, to be the relevant public and relevant geography in determining well-known status. Another key change is that the domain name will be difficult to use as the basis for a cause of action for well-known trademark recognition. The Interpretation defines only (1) the domain name contains the well-known trademark or its similarity; (2) the relevant products are traded under the domain name through e-commerce; and (3) it will mislead the relevant general public, then one can raise the infringement case with recognition of well-known trademark.  

Furthermore, under the SPC’s January 9, 2009 Notification on Jurisdiction Issues Regarding Well-Known Trademark Recognition Related Civil Disputes, only certain courts at the intermediate level or above located in provincial capitals or other designated cities have the jurisdiction over cases for determining well-known trademark status.

In view of these changes, it appears that the PRC courts are likely to limit judicial recognition of well-known trademark in the future.

A full Chinese version of the opinion is available at http://news.xinhuanet.com/legal/2009-04/27/content_11263626.htm.