Cross-class recognition of well-known trademarks—Jaguar Land Rover Automotive PLC. v. Guangzhou Fenli Food Co., Ltd.[1]
Introduction
Pursuant to the Trademark Law of the People’s Republic of China (Trademark Law), well-known trademarks are judicially recognized as needed. The process may be difficult as the standard for recognition is usually high. Similarly, in the cross- class protection of well-known trademarks, the determination of the scope and boundary for the cross-class goods has long been a difficult and complicated issue in judicial practice. The cross-class recognition of well-known trademarks in this case involves goods of greatly different classes ranging from Class 12—land motor vehicle goods to Class 32—beverage goods presented. This case was selected as 2017 Top 10 IP cases of Chinese Courts. It is a typical case involving the recognition of well-known trademarks in China and serves as an important reference for similar cases.
I.Basic facts of the case
The plaintiff Jaguar Land Rover Automotive PLC (hereinafter referred to as “JLR”) is a world-renowned British company engaged in manufacture and sale of luxury sport utility vehicles (SUVs). It is the owner of the registered trademarks “路虎” (Chinese translation of Land Rover, No.3514202), “Land Rover” (No.4309460) and “Land Rover and the logo” (No.808460) inClass 12—“land motor vehicles and their parts and accessories.” The above three trademarks (the “Disputed Trademarks”), all acquired from the plaintiff’s affiliated company Land Rover, are legal and valid.
JLR found that Guangzhou Fenli Food Co., Ltd. (hereinafter referred to as “Fenli”) manufactured vitamin sports beverages and nutrient beverages labeled with “路虎” and “Land Rover” trademarks (the “Infringing Products”), and promoted and sold the Infringing Products and solicited business for such products on its official website, Alibaba website and other platforms. In addition, Fenli was found to sell the Infringing Products through many physical stores.
JLR filed a trademark infringement lawsuit with Guangzhou Intermediate People’s Court in January 2014 for cross-class protection of well-known trademarks. The court of first instance held that the Disputed Trademarks constituted well-known trademarks used on land motor vehicles, and ordered Fenli to immediately stop using the said trademarks on the goods produced and sold by it and in internet advertising and compensate JLR for RMB 1.2 million. Fenli objected to the judgment and appealed to Guangdong High People’s Court. The court of second instance reversed the appeal and upheld the judgment of first instance.
II.Case adjudication
(I)Were the Disputed Trademarks well-known when the alleged act occurred?
In this case, the Disputed Trademarks are approved to be used on goods in Class 12—“land motor vehicles,” while the alleged trademarks of Fenli are mainly used on goods in Class 32—“non-alcoholic beverage.” This case falls under the situation as stipulated in the paragraph 2 of Article 13 of the Trademark Law (revised in 2001): “Where a mark is a reproduction, imitation, or translation of a third-party’s well-known trademark which has been registered in China in respect of different or dissimilar goods, which may mislead the public and cause damage to the interests of the registrant of the well-known trademark, the mark shall not be granted for registration and shall be prohibited from using.”
Fenli argued that JLR had no evidence to prove that the Disputed Trademarks were already well-known at the time of the alleged act, and claimed that cross-class protection shall not apply in this case. However, the court of second instance held that the evidence submitted by JLR in the first instance proved that the Disputed Trademarks of JLR were registered in China in 1996, 2004 and 2007 successively. The Chinese media coverage, charity donation documents and auto industry awards between 2004 and 2013 provided by JLR showed that JLR had participated in various auto shows held in China, entered Chinese markets around the country and won a large number of awards and honors since 2004. Thus, the Disputed Trademarks have been used by JLR for a long time and enjoyed high reputation in the industry. Evidence provided by JLR, including the audit report, declaration form for the import and export of goods and import tariff statistics, sales statistics, tax ranking, and online reports of industry platform, is adequate to prove that JLR had a large sales network and market share in China before 2013, and enjoyed a high reputation in the market and was well known by the public. Furthermore, JLR’s Advertising Positioning Schedule, statistical table of publicity expenses, advertising contracts and invoices, newspaper advertisements, online search results and advertising monitoring reports also proved that JLR had made great efforts in the long-term and extensive publicity, use and maintenance of the Disputed Trademarks and relevant products between 2009 and 2013, and JLR and its Disputed Trademarks are highly and widely recognized in China. In addition, the rulings for trademark objection review submitted by JLR during the first instance showed that the Trademark Review and Adjudication Board had determined the Disputed Trademarks had been widely known among relevant consumers after long-term use and extensive publicity by JLR and had become well- known trademarks when it reviewed two disputed trademarks applied for registration by third parties on December 2009 and 19 April 2011.
Based on the above evidence, the court of second instance held that the evidence submitted by JLR was sufficient to prove that the Disputed Trademarks used on land motor vehicles and other goods had already become well-known among public in China before the alleged infringement occurred in July 2013.
(II)Did the alleged act constitute trademark infringement?
In this case, the Disputed Trademarks are all fanciful marks. As trademarks, they have strong distinctiveness. After long-term and extensive use, publicity and maintenance by JLR, the Disputed Trademarks have further acquired distinctiveness and have been well recognized by relevant public. When the relevant public sees or hears the Disputed Trademarks, they will easily associate them with JLR. The alleged trademarks used by Fenli are “路虎,” “LAND ROVER,” “Land Rover 路虎” and “路虎 Land Rover” in two lines are identical or similar to the Disputed Trademarks. Fenli had no objection to this and failed to give a reasonable explanation for its use of the alleged trademarks. Fenli defended that the alleged act was the legitimate use of its own registered trademark on the ground that it had applied and obtained approval for the registration of the trademark “路虎 LANDROVER” (No. 8429937) in Class 30, and its act would not mislead the relevant public or constitute infringement. In response, the court of second instance held that, in accordance with Article 11 of the Interpretations of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes Involving Well-known Trademark Protection, JLR had the right to seek civil relief against the use of post-registered trademarks to prevent Fenli from imitating its well-known trademarks and using them in different and dissimilar goods to mislead the public in its actual business activities, no matter whether Fenli has applied for or received approval for the registration of the trademark “路虎LANDROVER” on certain class of goods. Additionally, the evidence provided by JLR in the second instance also showed that Fenli’s registration for the trademark “路虎 LANDROVER” (No. 8429937) had been determined by an effective administrative decision as “an intentional copy and reproduction of well-known trademark of others... Fenli’s malicious registration of the disputed trademark in this case shall be prohibited,” and thus confirmed that the aforesaid registration “shall not be approved.” Therefore, Fenli’s defense of legitimate use and registration of the trademark cannot be established.
Although Fenli used the alleged logos on dissimilar goods to those covered by the Disputed Trademarks, the relevant public has established close relationship between the Disputed Trademarks and JLR based on the distinctiveness, and long-term and extensive use of such trademarks. The alleged product and logos can easily lead the public to mistakenly believe that the alleged act had been licensed by JLR, or that Fenli and JLR had a shareholding, investment, cooperation and other relationships to a certain degree. Such misunderstanding weakened the distinctiveness and good reputation of JLR’s Disputed Trademarks as well-known trademarks and damaged the interests of the right holder. Therefore, the court in this case finally ruled that the alleged act of Fenli misled the public and damaged the interests of JLR, thus constituting trademark infringement.
(III)Was the amount of compensation awarded reasonable?
Fenli argued that it legally used the trademark it applied for registration and there was no subjective fault. Moreover, given its small registered capital and limited scale of the alleged act, Fenli thought that the amount of compensation awarded in this case was obviously too high.
The court of second instance did not support the above-mentioned claim of Fenli for the following reasons: (i) as JLR had made long-term and sustained efforts in the use, publicity and maintenance of the Disputed Trademarks and such trademarks enjoyed high popularity and sound market reputation, the judicial protection granted to them should be commensurate with their popularity; (ii) considering that the alleged logos used by Fenli were all imitations and copies of all or major parts of the Disputed Trademarks, Fenli had obvious subjective malice in squatting the well-known trademarks; (iii) as shown by the evidence in this case, Fenli not only publicized the alleged logos on its website and famous website “1688.com,” but also used the logos in its actual operation. It can be seen from the evidence provided by JLR in the first instance that the alleged infringement of Fenli continued after JLR filed a lawsuit against it. The infringement lasted for a long time and spread widely;
(iv) the evidence in this case showed that Fenli was not a bona fide user of the alleged logos. Besides the alleged logo, Fenli had also applied for the registration of a large number of celebrities and well-known enterprises’ names as trademarks. It had obvious subjective malice in hoarding and improperly using trademarks by taking advantage of the loopholes in China’s trademark registration system. During the second instance, Fenli failed to give a reasonable explanation for its use of the alleged logos; instead, it insisted on its non-infringement on the ground that the trademark it used had been authorized and its application for trademark registration does not violate the law. Fenli had obvious subjective malice in using legal means to cover up the infringement, which was seriously against the principle of good faith; (v) according to the evidence provided by JLR in the first instance, Fenli had been subject to a public notification by Guangdong Administration for Industry and Commerce due to the fact that some of its products failed to pass the quality inspection. Although there was no evidence to prove that the unqualified products were directly related to the alleged products, the popularity of the Disputed Trademarks would obviously be diluted due to the alleged infringement and the reputation would be degraded due to the improper use of Fenli. JLR would thereby suffer great damage as a result; and (vi) JLR paid more than RMB 280,000 for preliminary investigation and evidence collection and other reasonable expenses in order to stop the infringement in this case, and submitted to the court the evidence of such expenses.
Accordingly, taking into account a series of factors such as the quantity and popularity of the Disputed Trademarks, the nature, circumstance, duration, consequence of Fenli’s alleged infringement and its business scope, as well as JLR’s reasonable expenditures for right protection, the court at its discretion ordered Fenli to pay JLR RMB 1.2 million in total as economic compensation.
III.Case analysis
(I)This case involving cross-class recognition of well-known trademarks serves as an important reference for similar cases
In this case, the allegedly infringing logo was an imitation of all or major parts of the Disputed Trademarks and was used as a trademark on different and dissimilar goods. This would easily lead people to think of a certain connection between the two, thus misleading the public and potentially damaging the interests of the plaintiff. Thus, JLR filed the lawsuit on the ground that the defendant violated the provisions of Article 13 of the Trademark Law, and took the Disputed Trademarks being well-known as a factual basis. Therefore, only after the Disputed Trademarks have been recognized as well-known trademarks can they receive cross-class protection, and whether the defendant’s act infringes the plaintiff’s exclusive right to use the registered trademarks can be determined then. In this case, in order to provide cross-class protection for the Disputed Trademarks, it is indeed necessary to recognize the Disputed Trademarks as well-known trademarks.
In the cross-class protection of well-known trademarks, the determination of the scope and boundary for the cross-class goods has long been difficult and complicated in judicial practice. It often involves the question of whether the alleged infringement will lead to confusion and misunderstanding of relevant consumers. The Disputed Trademarks were registered under Class 12—“land motor vehicle” goods, while the defendant’s allegedly infringing products belong to Class 32—“beverage” goods. In order to prove that the defendant’s act had indeed caused confusion and misunderstanding, KWM Intellectual Property team proposed that the products using the Disputed Trademarks were mostly SUVs, and that the allegedly infringing products were functional sports drinks. Therefore, there was homogeneity and overlap between the relevant consumers of the two categories of products. In daily life, consumers of automobiles are also consumers of beverages. In automobile sales centers, expressway service centers, gas stations and other places related to automobiles, there are often shops, sales windows, vending machines, etc. to sell beverage products. Judging from the habits, characteristics and preferences of consumers, the relevant public preferring the SUVs will also be more inclined to consume functional sports drinks. Therefore, there was a certain degree of correlation between the vehicle products using the Disputed Trademarks and the allegedly infringing product, i.e., functional sports drinks. In addition, Fenli used various forms of commercial logos such as “ 路 虎 ,” “LAND ROVER,” “land rover” and “路虎 Land Rover.” These allegedly infringing logos are exactly identical or similar to the well-known Disputed Trademarks, which is easy to cause the relevant public to mistakenly believe that the products produced and sold by Fenli have been authorized by JLR or have specific connections with JLR, such as the logos being permitted to use by JLR or the owner of the products being an affiliated enterprise of JLR.
In addition to causing confusion and misunderstanding among the relevant public, if Fenli continues to use JLR’s well-known Disputed Trademarks on functional beverages and other products, its acts will undoubtedly reduce and weaken the recognition and distinctiveness of such trademarks, erode the commercial reputation and value of the Disputed Trademarks, and damage the legitimate rights and interests of JLR. Therefore, such acts should be regulated.
In this case, KWM IP team assisted JLR in providing systematic, sufficient and creative views and opinions on cross-class and confusion issues. With sufficient evidence and reasoning, the arguments were finally supported by the court. As a result, JLR secured cross-class protection for its Disputed Trademarks, which involves goods of greatly different classes, i.e., from Class 12 to Class 32. Therefore, this case serves as an important reference for similar cases.
(II)The Disputed Trademarks were all recognized as well-known trademarks in a single judgment
Pursuant to China’s Trademark Law, well-known trademarks can be recognized through administrative or judicial approaches. However, courts usually make the recognition of well-known trademarks as needed, and the standard for recognition of well-known trademarks is relatively high. In recent years, courts across the country have rarely recognized well-known trademarks in civil infringement cases.
In this case, KWM IP team assisted JLR in organizing evidence from various aspects, including the relevant public’s recognition and market reputation of the Disputed Trademarks, the market share, sales area, profit and tax of cars using the Disputed Trademarks, the duration of use of the Disputed Trademarks, the way, duration, degree, investment and geographical coverage of the Disputed Trademarks in the publicity or promotion activities, which successfully proved that the Disputed Trademarks had become well-known in China.
In addition to the recognition of well-known trademarks, a highlight of this case is that, whether it is necessary to recognize the three trademarks: “路虎” (No.3514202), “Land Rover” (No.4309460) and “Land Rover and the logo” (No.808460) claimed by JLR as well-known trademarks is the tricky yet essential issue of this case.
KWM IP team assisted JLR in strategically organizing evidence to prove that the defendant diversified the forms of use of the allegedly infringing trademarks by using various commercial logos such as “路虎,” “LAND ROVER,” “land rover” and “ 路 虎 Land Rover” in its products, official websites or other commercial activities, thus infringing upon the Disputed Trademarks. Therefore, only when the Disputed Trademarks are all recognized as well-known trademarks can the infringement in this case be completely stopped. It is also in line with the legislative purpose of protecting well-known trademarks in our country. In the end, KWM successfully proved that the defendant’s acts infringed the legitimate rights and interests of JLR in the Disputed Trademarks, and the court recognized all the Disputed Trademarks as well-known trademarks in a single judgment based on the above evidence.
(III)The means of proof for damages in this case serves as a good reference
As it is difficult to determine the loss of JLR or the profit gained by Fenli from the infringement in this case, KWM IP team assisted JLR in collecting sufficient evidence in terms of the nature, circumstance, duration and consequence of Fenli’s infringement, the product varieties with the allegedly infringing logo, Fenli’s business scale, the quantity and popularity of JLR’s registered trademarks and the product varieties approved for using such trademarks, the reputation of JLR and the reasonable expenses it spent on restraining the infringement, etc.
Regarding compensation for trademark infringement, China’s revised Trademark Law in 2013 raised the upper limit of legal compensation from RMB 500,000 to RMB 3 million, and provided punitive compensation for malicious infringement. In order to prove the malice of Fenli, KWM collected and provided evidence showing that, in addition to maliciously applying for registration of the trademark “ 路 虎 ,” Fenli also registered or applied for registration of trademarks involving a large number of celebrities and well-known enterprises, including “Chen Daoming,” “Zhen Zidan,” “Zhang Jiuling,” “SHARP,” “Honda” and “SENSACOOLS.” This fully proves its obvious subjective malice of registration of others’ trademarks, showing that Fenli is not an honest operator. Given its consistent illegal acts in malicious registration and squatting of well-known trademarks, Fenli shall be severely punished by law.
After fully considering, among others, the following factors: (i) the popularity of JLR’s Disputed Trademarks; (ii) Fenli has obvious subjective malice in hoarding and improperly using trademarks by taking advantage of the loopholes in China’s trademark registration system; and (iii) the popularity of the Disputed Trademarks had been diluted due to the alleged infringement, the court ordered a compensation of RMB 1.2 million to JLR. This is also the highlight of the case and can also provide certain reference for the calculation of compensation for trademark infringement disputes.
In this case, KWM IP team assisted JLR in proving the popularity of the Disputed Trademarks and Fenli’s subjective malice in its trademark infringement from multiple dimensions, which was finally fully recognized by the court. By successfully recognizing the Disputed Trademarks as well-known trademarks, the trademark infringement by Fenli has been fully stopped. It is a typical case involving the recognition of well-known trademarks in China, which is of great significance and reference to strengthen the protection of intellectual property rights and educate the public to respect intellectual property rights.
King & Wood Mallesons represented Jaguar Land Rover Automotive PLC in the case.
