By Yang Xiaoli (partner), Zhang Jiaqi(senior associate) and Kang Lifang (associate)
I. Case facts
On January 18, 2012, the government of the Republic of Fiji (the “Fijian Government”) applied to register three certification marks “FIJI PURE MAHOGANY” (No. 10437014), “FIJI PURE” (No. 10437015) and “FPM” (No. 10437016) at the Trademark Office of China, all for “plantation grown mahogany timber” in Class 19.
After examination, the Trademark Office refused registration of the three marks on the grounds that (1) the first two applied-for marks were devoid of distinctiveness; (2) the third mark was similar to the cited mark(No. 6119374); and (3) the applicant, the Fijian Government, did not submit effective Rules for the Use of Certification Marks for all of the three applications. Dissatisfied with the decisions, the Fijian Government filed a review with the Trademark Review and Adjudication Board (“TRAB”). Upon examination, the TRAB upheld the Trademark Office’s decisions for the following reasons:
- The marks were devoid of the distinctiveness necessary for a trademark.
- The applicant did not submit any documents approving the geographic indications (“GI”) granted by the local government or competent authority of the region represented by the GI’s.
- The Rules for the Use of Geographical Indications submitted by the applicant did not provide detailed information on the professional personnel and testing equipment of the agency appointed by the applicant. Nor did the applicant submit any certificates issued by a competent industry authority at provincial level or above to demonstrate the applicant’s supervisory ability.
- The applied-for mark “FPM” was similar to the cited mark “PFM” used on similar goods. The evidence presented by the applicant was insufficient to demonstrate that the applied-for mark had become distinctive through use from the cited mark and would not be confused with the latter.
- The applicant did not submit effective Rules for the Use of Certification Marks.
Disagreeing with all the above decisions, the Fijian Government brought administrative lawsuits before the Beijing IP Court. The Court supported all of the Fijian Government’s claims and canceled TRAB’s decisions. TRAB appealed against the first instance judgment to the Beijing Higher People’s Court (“BHPC”), which upheld the judgment.
II. Issues of focus and main points of the court judgments
(1) Can an ordinary trademark or service mark be cited against a certification mark application?
According to the Beijing IP Court and BHPC, a certification mark indicates the origin, raw material, method of manufacture, quality or any other features of goods or services, instead of their producers or suppliers. Hence, in principle, an ordinary trademark or service mark may not be cited against a certification mark application, and vice versa. There are exceptions, however, depending on whether a purported certification mark is viewed by the relevant public as such. Even though a registration is sought as a certification mark, a trademark or a service mark may be cited to prevent it being registered as a certification mark if the public tend to view the applied-for mark as an ordinary trademark or a service mark so that it can be confused with a trademark or a service mark.
This is the case for the “FPM” mark. Both the Beijing IP Court and BHPC considered that “FPM” was a certification mark, but also a coined word that did not contain any geographical names. Given that the plaintiff had no evidence of its being recognized through use by the public in China as a certification mark rather than an ordinary trademark, use of the “FPM” mark on goods identical with or similar to other goods covered by another mark may cause confusion. In this case, therefore, a trademark may be used as a cited mark against it.
In addition, the above-mentioned determination of similarity of goods broke through the limit of the Classification of Similar Goods and Services. Specifically, under the Classification of Similar Goods and Services, the two types of goods covered by the opposing marks belong to the same group in Class 19. Nonetheless, both the Beijing IP Court and BHPC insisted that they were not similar because they were substantially different in terms of functionality, use, manufacturing sector, distribution channel and target consumers.
(2) Distinctiveness requirement for certification marks
In the “FIJI PURE MAHOGANY” case, both the Beijing IP Court and BHPC held that a certification mark certifies the origin, raw material, method of manufacture of goods or performance of services, quality, or any other features of the goods or services in connection with which it is used, but is not used to identify their manufacturers, producers or suppliers. To this end, a certification mark generally includes the common name of the goods or services, origin, quality or other features. Therefore, the distinctiveness requirement for an ordinary mark to fulfil its functions does not apply to a certification mark. As the plaintiff had clearly indicated that the mark was to be registered as a certification mark when filing the application, Article 11 of the 2001 Trademark Law is not applicable in determining whether the applied-for mark has distinctive features.
(3) Application of the basic requirement of administrative openness
In the “FPM” case, TRAB rejected the application for registration of the mark on the grounds, among others, that the applicant did not submit effective Rules for the Use of Certification Marks. In this regard, both the Beijing IP Court and BHPC held that while the Rules for the Use of Certification Marks submitted by the applicant was not in compliance with the Measures for the Registration and Administration of Collective Marks and Certification Marks, this would not necessarily lead to the rejection of a certification mark application. This was because it was different from an ordinary trademark application that would be rejected if it “lacked distinctive features” or might “cause adverse effects”. According to the administrative openness requirement, when examining a trademark registration, the trademark authority must give the applicant detailed reasons for any non-compliance, and allow the applicant to make revisions and corrections so as to protect its interests. In this case, however, TRAB did not indicate which rule(s) submitted by the Fijian Government was non-compliant for the use of certification marks and any reasons either in the examination process or its decision. This led to the applicant’s failing to revise or improve its rules in subsequent procedures and went against the basic requirement of administrative openness.
(4) About the applicant’s ability to oversee the particular quality of the goods covered by the certification mark
In the “FIJI PURE” and “FIJI PURE MAHOGANY” cases, the TRAB rejected registration of the two marks on the ground that the applicant did not submit detailed information on the professional personnel and testing equipment of an appointed agency in the Rules for the Use of Geographical Indications, nor did it submit any documents from a competent industry authority at provincial level or above to demonstrate that the applicant was able to oversee the special quality of the goods covered by the certification mark. Both the Beijing IP Court and BHPC held that TRAB’s rejection of the applications for registering GI’s as certification marks was without any factual or legal foundation for the following reasons:
First, information about the professional personnel and testing equipment is to show the applicant’s ability to oversee the particular quality of the goods covered by the certification mark, but not the ability to ensure that the goods satisfy any national or industry standards. Moreover, the defendant was not in a position to conduct any substantive examination of the specific standards that the professional personnel and testing equipment were expected to meet. Therefore, professional personnel and testing equipment were just formal requirements for applying for a certification mark. The quality standards of the goods to which a certification mark applies should be determined in the market by consumers.
Second, professional personnel and testing equipment must relate to the special quality of the goods covered by a certification mark. The particular nature of the goods covered by a GI as a certification mark is determined by the natural conditions, or the natural and human factors of the region represented by the GI [please check this is what the author meant?]. The qualities of goods being determined by different factors require different professional personnel and testing equipment, thus should be treated differently. As the marks at issue were certification marks that contained the geographical name “FIJI” for plantation grown mahogany timber, the particular quality of the goods covered by the said certification marks was mainly determined by the natural conditions of the place of origin. Unfortunately, the TRAB’s decisions did not take this point into consideration.
Third, the documents furnished by the Fijian Government were sufficient to demonstrate that the Fijian Government was able to control the unique quality of the goods covered by the certification marks.
III. Lessons learnt from the cases and their ground-breaking significance
We represented the Government of the Republic of Fiji, in the first and second instance trials of the three cases, all of which involved many complex new issues. Certification mark applications are relatively rare, and those which are eventually brought to the courtroom are even rarer, resulting in few precedents to follow, especially where the plaintiff is a national government. The whole process from preparing the initial litigation documents to dealing with substantive issues in the final phase involved intensive research and discussion of key issues. These included:
1. As the plaintiff was a national government, the first issues were verification of the signatory’s authority and proof of the existence of a government, especially as the Beijing IP Court was exacting with the filed documents. Rounds of discussions led to the realization that the constitution of a country generally contains provisions on the establishment of a government and the duties of the head of government (the prime minister in these cases). A reading of the Fijian Constitution confirmed this point. Finally a notarized copy of the Constitution of the Republic of Fiji was submitted and accepted as proof of the establishment and valid existence of the Fijian Government and of the authorized representative’s identity.
2. The Measures for the Registration and Administration of Collective Trademarks and Certification Marks do cover the materials required to apply for a certification mark or a geographical indication, but much remains unclear in practice, especially when a foreign entity applies for a certification mark. Usually, the Trademark Office and TRAB are silent about what documents are needed. Sometimes (as in this case) an application may be turned down in the final stage even after the applicant has already consulted with the Trademark Office and TRAB about the documents required and has made preparations accordingly. This can leave the applicant at a loss as to what to do. We argued that the TRAB, following the principle of administrative openness, should have notified the applicant of any missing documents and how to make up for them. We also advised the client to provide all the materials for a certification mark application as set forth in the Measures for the Registration and Administration of Collective Trademarks and Certification Marks, and gave detailed advice on evidencing them. The client managed to collect key evidence for the case. The courts accepted it and overturned the TRAB’s decisions.
3. As to whether a certification mark must satisfy the distinctiveness requirement, we contended that a certification mark was used to certify the origin, raw material, method of manufacture, quality or any other features of the goods or services, rather than to distinguish between different producers or suppliers. Therefore, the distinctiveness required of an ordinary trademark did not apply to a certification mark. The courts eventually accepted this argument.
4. In the FPM case, although the goods covered by the applied-for mark and those covered by the cited mark belonged to the same group under the Classification of Similar Goods and Services, we persuaded the courts that they were not similar because of their substantial differences in functionality, use, distribution channel, and manufacturing sector. The courts often find similarity between two types of goods belonging to different classes, but rarely do they deny similarity when goods or services are in the same subclass.
As there are few cases relating to certification marks and GI’s in China, judicial precedents and theory are still nascent, and no useful doctrine has been established. In the 2015 case summary published by the TRAB, only seven cases involve certification marks, including the three handled by King and Wood Mallesons. The court judgements in those three cases encompass some new ideas and practices that will provide guidance when applying to register certification marks.
Editor’s note: this article was simultaneously published on Chinalawinsight.com