Ling ZHAO of the MARQUES China Team reports on a decision by the Supreme People’s Court (SPC) regarding alleged infringement of the “mk” trade mark by Michael Kors Company.

On 30 March 2020, the SPC gave a judgement concluding that there was no infringement by Michael Kors Company ((2019) Zui Gao Fa Min Shen No. 6283). The Court rejected the claims of the plaintiff Shantou Chenghai Jianfa Handbag Factory (Jianfa), finding there was no likelihood of confusion.

This case involves the trade marks shown on the right.

Trade mark of Jianfa (plaintiff)

Trade marks of Michael Kors Company (defendant)

History of the case

On 7 February 1992, the Jianfa company obtained trademark registration No. 1244366 for the mk mark in Class 18 for “handbags; sports bags; travel bags, etc”.

Michael Kors and its affiliates use the MK marks shown below right, on metal decorative buttons and corresponding product advertisements and product brochures, in store decorations, on product lining, pad paper and membership plans, and on their website and WeChat customer service.

Jianfa argued that these uses by Michael Kors have misled the relevant public, causing reverse confusion.

Jianfa sued Michael Kors Company for trade mark infringement and requested the sales of Michael Kors’s handbags to be stopped, claiming damages of RMB95 million.

The courts of the two instances denied the claims of Jianfa, concluding that there was no infringement. Jianfa then filed a retrial application with the SPC.

Findings of SPC

The SPC held that the trade mark of Jianfa is a simple combination of two lowercase letters “m” and “k”, and its distinctiveness is mainly reflected in the font design thereof. Therefore, when determining the similarity the trademarks of the two parties, we cannot reach a conclusion based simply on the composing letters.

By comparison, we can see that the font designs of the alleged infringing trade marks belonging to Michael Kors are quite different from that of the cited mark of Jianfa, especially the logos with figurative elements Therefore, the alleged infringing trade marks of Michael Kors and the trade mark of Jianfa do not constitute identical marks, and should not be viewed as such.

Likelihood of confusion

Further, to judge if the trademarks of the two parties are similar, we need to consider if there is a likelihood of confusion. To determine if there is any likelihood of confusion, it is necessary to consider the actual use of the alleged infringing mark, as well as the distinctiveness and reputation of the prior cited trade mark. The same criteria apply to reverse confusion.

In this case, the prior cited mark is composed of two common letters with weak distinctiveness. Although the prior cited mark has been registered and used since the year 1999, most goods have been exported, with a very limited amount sold in the Chinese market. Thus the prior cited mark of Jianfa has not acquired high distinctiveness or reputation.

Michael Kors has been using the alleged infringing mark "mk" on the metal buckle of trunks and bags since 2008. Michael Kors has been using "MK" as the acronym of "Michael Kors" in the sales channels of its goods, including exclusive stores, official websites and WeChat stores, since entering the Chinese market in 2011. Through the wide-scale and continuous use in the market, "MK" has become known to the public as the acronym of the trade mark "Michael Kors", and obtained a certain reputation. Michael Kors has no intention to borrow the goodwill of the mk trademark of Jianfa.  

In addition, the alleged infringing “MK” trademark of Michael Kors is usually used together with the trademark "Michael Kors", which is enough for consumers to identify the sources of the goods, without becoming confused with the “mk” trademark of Jianfa.

Further, the goods of Jianfa are mainly for export with low prices, while the alleged infringing goods are mainly sold in exclusive stores and counters, with a relatively high price. Ordinary consumers usually pay more attention when they purchase the alleging infringing goods. Therefore, the consumers of the goods of the two parties are also different.

Based on these findings, the SPC held that it is not easy for the relevant public to be confused as of the sources of the goods of the two parties. Moreover, Jianfa began to change its mk trademark in 2015, in a way which makes it resemble the design of the MK trademark of Michael Kors, showing the intention of Jianfa to imitate the alleged infringing trade mark and actively seek confusion.

The SPC therefore concluded that the use of the MK trademarks of Michael Kors does not infringe the exclusive right of the trade mark of Jianfa, and the Court did not support the claim of reverse confusion.

Bad faith of the prior trade mark owner

The decision of second instance by Zhejiang High Court ((2018) Zhe Min Zhong No. 157) held that in the judgment of reverse confusion, the criteria such as the similarity of trade marks, the distinctiveness and the reputation, and the attention of relevant public make no difference to positive confusion.

It is worth noting that instead of using its registered mk trade mark, Jianfa tried to register and use trade marks which are more like the MK trade marks of Michael Kors. Obviously, the plaintiff doesn’t intend to simply protect its exclusive right to use the registered trade mark, but to deliberately pursue and create confusion among the relevant public. The Court held that although it was necessary to protect the registered trade mark right of the plaintiff, when its behaviour shows its bad faith to cause confusion or to mislead the public, the protection of its trade mark right should be limited.

In the case of reverse confusion, it is necessary to consider the intention of the prior trade mark owners. The good faith principle in accordance with Article 7 of the China Trademark Law shall not only apply when registering a trade mark, but also when the trade mark is used.

Ling ZHAO is a Trademark Attorney with CCPIT Patent and Trademark Law Office and a member of the MARQUES China Team

Charlotte Duly of the MARQUES Education Team reviews a new book “The Great Catapult: How Integrated IP Management Will Shoot Your Brand to Success” by Zeeger Vink (with contributions from James Nurton), available in paperback (£17.99) and Kindle (currently £6.24) from Amazon.

This book was published in July 2020 and benefits from having been written by someone who has worked with companies owning significant portfolios and well-known brands. Zeeger Vink is assisted by contributions from James Nurton, who will be familiar to MARQUES members.

This is not a legal tome or textbook as such, and is therefore a little different to the books typically reviewed on this forum, but it will be of interest to many MARQUES members. Businesses will find it insightful and IP lawyers will want their clients to read this – it clearly explains why IP is so important to a business and should be managed and treated as a valuable asset.

IP lawyers often state that IP is their clients’ most valuable business asset but the cost and time taken to explore and protect that notion is not always expended. This book explains not only why IP is so important but that an integrated approach to IP management is key.

Types of IP explored

Whilst certain industries are regarded as having IP at their core, particularly creative industries where the output is effectively IP such as music, films, and software, all businesses have some form of IP that is exploited and should be valued and managed: “IP can best be seen as a toolbox for creators and entrepreneurs to capture the value of their investments.”

The book provides a useful summary of the different types of IP rights, along with examples, forming a useful guide for those who are less familiar with the topic. This expands into an eloquent discussion of why you need the right tools to protect your output and your business as a whole. The discussion of the different forms of protection for different elements of the same product is easy to understand, explaining the interplay between trade marks, designs and patents for a single item. For those with a stronger IP background, the book helpfully directs the reader to which chapters they may find most useful.

Economic value of IP

To add weight to the discussion of the importance of IP and its management, the text is well researched and backed up with data to provide a fascinating insight into the importance of IP to the wider economy. For example, in the US and EU, 40% of GDP and over 30% of jobs are attributable to IP-intensive industries. IP-intensive industries account for 81% of EU trade with the rest of the world.

Strategy for businesses

The role of IP within a company is explored and identified as being “somewhere between legal and marketing”.

This book makes the important case for including trade mark protection within a company’s branding strategy and integrating IP into the general business strategy. Businesses can make sure their IP is captured and exploited by creating “IP reflexes” at relevant operational points. The rationale for this is emphasised with cautionary tales of IP that was not protected at the right time or in the right place. Even if a business is not in an IP-heavy industry, IP protection safeguards the significant investment in promotion of brands and products. Every business will have IP which should be protected and maintained.

The role of a companywide IP policy is crucial, along with a brand guide to dictate how a brand should be used on both internal and external communications. Through integrated IP management you can build IP consciousness throughout a business, covering all areas including those that may not be immediately obvious such as ensuring IP generation and ownership are covered in employee contracts. This book contains handy guidance for ensuring all employees are IP conscious – something all IP legal practitioners no doubt support!

Case studies from James Nurton, drawing on his experience as an IP journalist, and with contributions from a number of the brands featured in the book, bring the importance of IP management to a real world context.

IP as an asset

Covering the full spectrum of IP, the book also explores IP as an asset; something that can generate revenue through licensing and appear on the balance sheet.

Issues such as counterfeiting and the impact of the rise of social media are discussed, both being situations where there is use of brands by the public and other third parties.

The appendices contain helpful checklists to allow business to implement some of the guidance in the book, including a CEO checklist and guide for preparing an IP report.

Overall, an easy to digest book that helps businesses of any size identify, capture and utilise their IP.

Charlotte Duly is Head of Brand Protection at Charles Russell Speechlys LLP and a member of the MARQUES Education Team. If you would like to suggest a book for the Team to review, please contact Charlotte via the Team's page

How have courts in Europe responded to the COVID-19 crisis? Four members of the MARQUES Dispute Resolution Team discuss that question and compare experiences in a specially recorded webinar.

The webinar can be watched in the MARQUES Virtual Library, along with other online material available from MARQUES.

The speakers in this webinar (pictured, right) are:

• Jeremy Blum, Bristows, UK
• Björn Bahlmann, Boehmert & Boehmert, Germany
• Thomas Legler, Pestalozzi Sttorneys at Law Ltd, Switzerland
• Alberto Camusso, Studio Legal Jacobacci & Associati, Italy

Each speaker discusses the challenges facing courts in their jurisdiction, and how the courts have adapted.

Topics covered include: the need to postpone hearings due to the lockdown; the impact on litigation strategy and settlement; the use of videoconferencing, its benefits and pitfalls; the approach taken by individual judges; how rules on what is and is not allowed differ between jurisdictions; and what the long-term impact of these changes is likely to be.

The speakers also draw on their own experiences of litigating since the pandemic, including their use of videoconferencing tools.

The recording lasts for about an hour and can be accessed directly here.

The MARQUES Unfair Competition Team has published two more reports as part of its project on company names, trade names and other business identifiers.

In October last year, the Team published a study on the topic, covering 14 countries. As anticipated, the survey revealed a great divergence in the law on trade names, company names and other business identifiers – even within the EU. In particular, there are differences regarding what qualifies as a company/trade name, whether registration and/or use is required, transfer, the scope of protection and the impact on trade marks.

The results were presented in a questionnaire and an executive summary.

Now the Team is publishing more detailed reports on the situation in various jurisdictions, analysing legislation, practical issues and dispute proceedings.

The reports are written in an accessible way to assist businesses who are interested to get a detailed perspective on certain issues in each market.

The country reports follow the structure of the questionnaire and executive summary, to maintain the unity of the presentation.

The first two reports to be published are on the Czech Republic (written by Karin Pomaizlová) and Germany (written by Sascha Abrar).

Further reports on other countries will be posted soon as part of this project.

The two reports, and last year’s study, can be downloaded from the Unfair Competition Team page on the MARQUES website (MARQUES log in required).

ZHU Zhigang of the MARQUES China Team provides an update on the EU-China GI Agreement.

In November 2019, China and the EU concluded the negotiations on a landmark bilateral agreement on geographical indications with commitments to very high-level of protection.

Upon authorization of signature of the agreement by the Council of the EU on 20 July 2020, the final text of the EU-China GI Agreement is expected to be signed before the end of 2020 and should enter into force soon after.

Protection for GIs

According to the agreement, 100 EU GIs in China and 100 Chinese GI in the EU will be protected against imitations and usurpation. Within four years after entry into force, another 175 EU GIs may be protected in China (and another 175 Chinese GIs may be protected in the EU).

In fact, many EU GIs had already been recognized and protected by China. Since 2012, EU GIs, including Champagne, Bordeaux, Margaux and Romanée-Conti have been granted protection in various legal proceedings such as trade mark oppositions, administrative raid actions, and civil actions. On 4 June 2020, the Shanghai Pudong People’s Court handed down the first judgment in a criminal proceeding, which found the suspects criminally liable for counterfeiting the GI collective trademark Bordeaux.

Issues to be discussed

Nevertheless, some issues will remain to be discussed, in particular the most complex which is the concept of genericity of a GI.

For the European Union, a GI – once it has been recognized as such – cannot become generic (article 23.2 of the EU regulation on the protection of geographical indications of 21 November 2012).

However, Article 33 of the Measures for the Protection of Foreign Geographical Indications issued by the Administration of Quality Supervision Inspection and Quarantine (AQSIQ) in March 2016 opened the possibility for a Chinese court to revoke a foreign GI.

No detail explaining the circumstances in which a foreign GI can be revoked was provided. However, recently, the Measures were revised by the China National Intellectual Property Administration (CNIPA) and the terms "when the foreign GI has been revoked by a decision of the judiciary", were replaced by "where it is a generic name or has become a generic name in China". Furthermore, on 25 March 2020, the CNIPA released the draft of a Guide for Determining Geographical Indications as Generic Names, inviting public comments.

This Guide provides clear procedures allowing any party, not only to oppose the registration of a GI, but also to apply for the revocation of a registered GI based on genericity, thus allowing market access and exports of the products bearing the GI.

This evolution appears to have been made in accordance with the first phase of the US-China Economic and Trade Agreement signed on 15 January 2020, in which the US insisted that China should create procedures allowing the genericity of a foreign GI in China, even if the foreign GI remains valid in its country of origin.

This, of course, is in absolute contradiction with the European principle according to which a GI shall not become generic, at least as long as it is protected as a GI in its country of origin.

The EU China GI Agreement does not address this issue which, among a number of other topics, will remain to be discussed between the two parties.

Mr. ZHU Zhigang is a partner and attorney-at-law with Wanhuida Law Firm, and a member of the MARQUES China Team

In their second post, Utku Süngü and Mutlu yıldırım Köse look at some of the trade mark applications that have arisen from the COVID-19 pandemic.

This is the second part of our article on the impact of COVID-19 in Turkey. The first post, looking at trade mark trends, can be read here.

With the COVID-19 pandemic, phrases such as “Koronavirus” (Coronavirus), “Korona” (Corona), “Sosyal Mesafe” (Social Distancing) and “Evde Kal” (Stay Home) have become part of our daily lives. This has also affected trade mark applications. Hence, we find phrases that are related to the pandemic such as “Covid-19”, “Coronavirüs”, “Koronavirüs” “Sosyal Mesafe”, “Covid” and “Korona” among the trade mark applications filed since the beginning of 2020.

It has been detected in the research made on the trade mark records of the Office that some of the trade mark applications have been rejected after the first examination while the registration process for some is continuing.

It can be stated that the Office rejects trade mark applications with the phrases “Covid-19”, “Korona” and “Corona” when they are applied for classes 3, 5, 9 and 10 which include cleaning, health, medical and protective materials in general, except when they have an additional distinctive device or phrase. For instance, it has been decided for the trademark application pictured right (number 2020/32607) that the registration process continue for the classes 3 and 5.

However, a trade mark application for “Korona” (number 2020/38152) has been rejected for class 3. Likewise, an application for “Coronagel” (number 2020/10514) has been rejected after the first examination for the class 5 including “Disinfectants, antiseptics (microbe killers), detergents for medical purposes, medicated soap, disinfecting soap, antibacterial hand lotions”.

Meanwhile, an application for “Hyper Corona” (number 2020/35062) has not been rejected for class 5 that includes the same goods and it is published in the Official Trademark Bulletin.

The Office does not generally reject trade mark applications with the phrases ”Covid-19”, “Korona” and “Corona” for goods and services for which these phrases cannot be defined as ‘descriptive’. It has been decided that the registration process of the two applications pictured (number 2020/45781 for class 35 and number 2020/58481 for classes 28 and 41 respectively) and “Korona Günlerinde Aşk” (number 2020/35152) for classes 9 and 41 can continue.

Likewise, the trade mark application “Corona” (number 2020/14479) for class 13 including “Firearms, air guns, spring arms and adapted cases and shoulder straps therefor. Heavy weapons, mortars and rockets. Fireworks. Defence gases for personal use” has not been rejected after the first examination and has been published in the Official Trademark Bulletin. However, the application pictured left (number 2020/34233) has been rejected for classes 1, 18 and 25.

The Office also rejects trade mark applications related to the COVID-19 period with the phrases “Sosyal Mesafe” (Social Distancing) and “Evde Kal” (Stay Home) unless they have distinctive devices or phrases. The following have been rejected:

• An application for “Sosyal Mesafe” (number 2020/38434) for classes 35, 41, 42 and 44.
• The application pictured above right (number 2020/43475) for classes 25 and 35.
• “Evdekal” (number 2020/36708) for class 35.
• The applications pictured right (number 2020/42290 for class 42 and number 2020/42290 for class 30).

However, an application for “Tadelle Evde Kal” in class 30 has not been rejected after the first examination and has been published in the Official Trademark Bulletin.

The approach of existing marks

Existing trademarks have tried to cope with the COVID-19 period by adopting various approaches. World-famous trade marks have created many commercial films raising awareness about the importance of social distancing and staying home. Apart from that, trade marks that can be called “social distancing trade marks” have been one of the methods adopted, as these examples show:

Trade marks in Turkey have also changed their logos in this way and participated in this trend of creating “social distancing trademarks”:

The COVID-19 pandemic, which has affected the whole world, has had an impact on trade mark law in many ways as well as other areas of law.

While the total number of trade mark applications before the Office has decreased, applications related to the COVID-19 period including phrases such as “Korona”, “Corona”, “Covid”, “Sosyal Mesafe” (Social distancing) and “Evde Kal” (Stay Home) have increased rapidly. Existing brands have made temporary revisions to their trade marks and slogans parallel with the Covid 19 period.

Utku Süngü and Mutlu yıldırım Köse are attorneys with Gün+Partners, a MARQUES member

Kate Swaine and Marion Heathcote of the MARQUES IP Emerging Issues Team discuss changes to some controversial brands in the wake of the Black Lives Matter movement.

The 'court of popular opinion' was always predicted to be the driver of progress regarding cultural appropriation and the appropriateness of brand language and imagery.

The IP Emerging Issues Team prophesised this in the session on Indigenous Intellectual Property Rights at the MARQUES Annual Conference in Villaitana 2016 which featured Ambassador Keith Harper, the then US Ambassador to the UN Human Rights Council, and again during the MARQUES Annual Conference in Dublin last year, when the Team held its workshop "Food, Fashion and Festivals – Whose Culture is it Anyway?".

The workshop explored where the line lay between brand inspiration and cultural appropriation, highlighted a number of controversial branding concepts (many of which were still in use) and considered the commercial and legal risks posed by their continued use (see blog post here).

The Team flagged this as an issue which consumers are alive to and have become increasingly vocal about and provided some suggestions to assist brand owners including ensuring greater diversity in decision making around branding and marketing practices.

In the wake of the Black Lives Matter movement, some of the controversial brand identities which the Team considered have come under scrutiny and brand owners have been reviewing their brand portfolios and the messaging that surrounds them. Some have already taken steps to make changes as a result and the IP Emerging Issues Team applauds this.

• Nestlé recently announced that it will rename its Red Skins and Chico sweets (pictured) in Australia.
• Following a petition new owner, Canada-based Saputo, has said it will cease using the controversial trade mark COON on a cheese product which has carried that name in Australia since 1935 (more details here and here). Previously there has been resistance to the pressure to change on the basis that the trade mark reflected the name of its American creator irrespective of it being known as a racial slur.
• Colgate-Palmolive is reviewing the name of its toothpaste Darlie which was labelled "Darkie" until 1989 and which translates in Chinese as "Black Person Toothpaste". Quaker Oats has announced that it will change the branding and name of its Aunt Jemima pancake and waffle mix product. Mars is reviewing the branding of its Uncle Ben’s rice range.
• Most recently, after years of controversy, the Washington Redskins American football team has announced that it will retire its name, notwithstanding a US Supreme Court ruling allowing for the registration of disparaging terms as trade marks. The announcement of the name change followed demands from sponsors to review the use of the Redskins name. The team will be known as Washington Football Team until a permanent new name is chosen.

It is likely that we will see more reviews and changes to well-known brands in the months to come. Whether we will see real legal change as to what terms should or should not be entitled to protection will remain to be seen.  

Kate Swaine is a partner of Gowling WLG and Chair of the IP Emerging Issues Team. Marion Heathcote is a partner of Davies Collison Cave and a member of the Team