With the continuous progress of science and technology and the increasingly fierce competition in the market, the use and expression of trademarks are also undergoing innovation; in addition to the common trademarks such as text, graphics, numbers, and so on, a series of non-traditional trademarks have also appeared, for example, three-dimensional trademarks, color trademarks, sound trademarks, dynamic trademarks, smell trademarks, tactile trademarks, hologram trademarks, location trademarks and so on.
Traditional trademarks usually have inherent distinctiveness and can be protected by successful registration. However, most non-traditional trademarks lack inherent distinctiveness. When applying for trademark registration, the applicant must prove that the non-traditional trademark has been publicized and used for a long time and has gained distinctiveness before it can be approved for registration. Article 11(1)(2) of China’s Trademark Law stipulates that a sign that only directly indicates the quality, primary raw material, function, use, weight, quantity, and other characteristics of the goods shall not be registered as a trademark. However, Article 11(2) stipulates that a sign listed in the preceding paragraph may be registered as a trademark if it has acquired distinctive features through use and is easily recognizable.
In the current practice, to determine the distinctiveness of a non-traditional trademark, the applicant must provide evidence of the use and publicity of the applicant’s trademark on the designated goods to prove that the applicant’s trademark has been known to the relevant public after a long period of substantial and extensive use and publicity and that the relevant consumers can recognize the trademark as a trademark and differentiate it from their products, thus serving the primary function of a trademark, for example, distinguishing the source of the goods.
In the appeal case of Application No. 3037973 Duracell Color Combination Trademark, the Gillette Company filed an application for registration of the color combination trademark of “brass and black” in the good of “batteries” in Class 9 on December 12, 2001, with the Trademark Office. The trademark is a long strip of color blocks; the two colors are brass and black, respectively, accounting for one-third and two-thirds of the overall. On September 11, 2002, the Trademark Office rejected the trademark registration application because “the trademark graphic only directly reflects the appearance of the goods, and lacks distinctiveness and the function of trademark recognition”.
The applicant was not convinced and filed an appeal with the TRAB on September 25, 2002, with the following principal grounds: 1) the Trademark Office had wrongly interpreted the applicant’s color combination trademark as a graphic trademark; 2) the applicant’s trademark is a color combination of brass and black in a particular proportion, which is intrinsically distinctive; 3) the applicant has been using the logo in China for many years as a trademark for battery goods together with other registered trademarks in China, such as “DURACELL”, “Duracell in Chinese” and “Golden Energy in Chinese”, and the color combination of the applied-for trademark has been widely publicized by the applicant. Through the applicant’s long-term use and publicity, the color combination of the trademark has become the distinctive sign of the applicant’s battery goods, and consumers can distinguish the applicant’s goods from similar goods produced by others according to the characteristics of the color combination on the battery goods.
The applicant, Gillette Company, has proved the fact that it has used the color combination mark in combination with its word marks “DURACELL,” “Duracell in Chinese,” “Golden Energy in Chinese,” and other word marks through the submission of its advertising materials. The information proves the fact that the trademark has been used in a large number of advertisements. At the same time, Gillette submitted a large number of penalty decisions and court judgments issued by administrative organs such as the industry and commerce department, quality inspection, customs and local people’s courts against the counterfeiting of its distinctive color combinations, which proved that others had counterfeited its distinctive color combinations in large quantities to make the relevant public mistakenly believe that the counterfeited products were the applicant’s products. Gillette relied on the above evidence to prove that its color combination trademark had been publicized and used for a long period, the relevant public could associate the color combination trademark with the applicant, and it had played the role of distinguishing the source among the relevant public, thus obtaining the trademark distinctiveness.
On October 10, 2005, the TRAB decided the appeal and held that the trademark application belongs to Article 11(2) of the Trademark Law; it can be easy to identify and used as a trademark registration with distinctive features through the use, the application of the trademark shall be able to be initially approved. On December 7, 2005, the color combination trademark was preliminarily approved and approved for registration on March 7, 2006.
Therefore, for a new type of non-traditional trademark, such as a color combination trademark, where it is challenging to prove inherent distinctiveness, evidence that the applied-for trademark has acquired distinctiveness through long-term and extensive use plays a crucial role in successful trademark registration.
So, when a non-traditional trademark is registered, a third party may find it “lacking in distinctiveness” and file an invalidation. How should the owner of a non-traditional mark defend itself in such a case? The recent decision of the European General Court in Lidl Stiftung v EUIPO - MHCS (Nuance de la couleur orange) (T-652/22) concerning the orange mark for Veuve Clicquot Champagne suggests that, where an application for invalidation is attacking a trademark registered based on its distinctiveness, the assessment of whether the mark is distinctive can involve two points in time: 1) the date of filing and; 2) the filing of the invalidity application (Article 51(2) CTMR, Article 59(2) EUTMR). The invalidation application fails if the trademark owner in dispute can prove acquired distinctiveness on either date. However, the owner of the mark should be able to provide evidence of both points in time.
The situation in China can be summarized by the court case of the dispute of invalidation decision of the Registration No. 20426843 “Xiao Guan Tea” trademark (the disputed trademark).
Case Background
Beijing Xiaoguan Tea Co., Ltd. applied to the Trademark Office on June 24, 2016, for registration of the trademark “Xiaoguan Tea in Chinese” in Class 30 “Tea” and other related products, and the registration was approved on August 14, 2017, with registration No. 20426843. On November 08, 2021, Changzhou Kaigu Tea Food Co., Ltd. applied for invalidating trademark No. 20426843, “Small Can Tea,” for lack of distinctiveness. On August 30, 2022, the TRAB ruled that the trademark in dispute should be maintained. Changzhou Kaigu Tea Co., Ltd. appealed to the Beijing Intellectual Property Court.
Court’s view
Regarding whether the trademark in dispute violates the provisions of Article 11(1)(2) of the Trademark Law, the court held that the trademark in dispute is “Xiaoguan Tea in Chinese”, which was applied for registration on the goods of “tea; flowers or leaves used as tea substitutes; tea drinks; iced tea”, of which “tea” is the abbreviation of various teas, and “Xiaoguan” usually refers to the packaging of the product, “Xiaoguan Tea” literally means tea packed in small canisters. “Xiaoguan Tea” directly indicates the primary raw materials of the goods, as well as the product packaging features. It lacks the inherent distinctiveness that a trademark should have, and it violates the provisions of Article 11(1)(2) of the Trademark Law and shall not be registered as a trademark. However, Article 11(2) of the Trademark Law provides that the signs listed in the preceding paragraph can be registered as a trademark after use to obtain distinctive features and are easy to identify. Without inherent distinctiveness, the sign can still obtain distinctive features through actual, lawful, and effective use, thus obtaining registrability.
The court continues to interpret, in determining whether a sign has gained distinctiveness through use, the following factors should be taken into consideration: 1) the manner, effect, and role of the actual use of the sign, for example, whether it is used in the manner of a trademark; 2) the time, territory, scope, scale of sales and other business situations in which the sign has been continuously used; 3) the extent to which the sign is known to the relevant public; and 4) other factors in which the sign has gained distinctiveness through use.
The evidence in the case shows that the Xiaoguan Tea Company’s operating income in 2015 and 2016 was about RMB 2.73 million and RMB 62.51 million, respectively. It established a wholly-owned subsidiary, Huangshan Xiaoguan Tea Industry Co., Ltd., in 2016. The combined operating income of the said subject in 2017 and 2018 was about RMB 600 million and 1.6 billion. Combining the distribution contract and invoices submitted by the Xiaoguan Tea Company, honors received, advertising contracts, media reports, market research reports, advertising audit reports, and other materials, as well as the factual situation found in a number of civil judgments, the court held that the evidence could be determined that the trademark in dispute had become highly recognizable among the relevant public, and had formed a correspondence with the Xiaoguan Tea company, and had achieved, through its use, a distinctiveness that could be registered as a trademark. It can also play the role of distinguishing the source of goods. Therefore, the trademark in dispute has acquired the distinctiveness of being registrable through use, which is in line with the situation stipulated in Article 11(2) of the Trademark Law. The court concluded that the CNIPA’s decision to maintain the trademark in dispute was correct and rejected the plaintiff’s request.
In the judgment, the court particularly pointed out that the examination to determine whether the sign has gained distinctiveness through use should generally be based on the factual status when applying for trademark registration. However, suppose the party concerned has sufficient evidence to prove that the trademark in dispute has gained distinctiveness through actual and effective use after the filing date. In that case, the evidence will be considered together with the evidence after the filing date of the application for trademark registration in dispute from the perspective of economizing judicial resources and protecting the legitimate interests of the party concerned. Conclusions
It can be seen that Chinese courts believe that when a registered trademark, which has acquired distinctiveness through use, is sought to be invalidated by a third party for “lack of distinctiveness” (or possibly use), the time to determine whether the sign has acquired distinctiveness through use shall be based on the factual state at the time of applying for the trademark registration. Suppose the party concerned has sufficient evidence to prove the sign has acquired distinctiveness through actual and effective use after application. In that case, the court will also consider evidence after the date of filing the application for trademark registration in dispute. However, the case did not raise the question of whether, when a trademark registered for the acquisition of distinctiveness is invalidated, the trademark owner is required to provide evidence that the trademark was relevantly “distinctive” when the invalidation was filed. To ensure the mark’s stability during the invalidation process, we recommend that the trademark owner provide evidence of continuity between the date of filing of the trademark registration and the date of the filing of the invalidation.
Traditional trademarks usually have inherent distinctiveness and can be protected by successful registration. However, most non-traditional trademarks lack inherent distinctiveness. When applying for trademark registration, the applicant must prove that the non-traditional trademark has been publicized and used for a long time and has gained distinctiveness before it can be approved for registration. Article 11(1)(2) of China’s Trademark Law stipulates that a sign that only directly indicates the quality, primary raw material, function, use, weight, quantity, and other characteristics of the goods shall not be registered as a trademark. However, Article 11(2) stipulates that a sign listed in the preceding paragraph may be registered as a trademark if it has acquired distinctive features through use and is easily recognizable.
In the current practice, to determine the distinctiveness of a non-traditional trademark, the applicant must provide evidence of the use and publicity of the applicant’s trademark on the designated goods to prove that the applicant’s trademark has been known to the relevant public after a long period of substantial and extensive use and publicity and that the relevant consumers can recognize the trademark as a trademark and differentiate it from their products, thus serving the primary function of a trademark, for example, distinguishing the source of the goods.
In the appeal case of Application No. 3037973 Duracell Color Combination Trademark, the Gillette Company filed an application for registration of the color combination trademark of “brass and black” in the good of “batteries” in Class 9 on December 12, 2001, with the Trademark Office. The trademark is a long strip of color blocks; the two colors are brass and black, respectively, accounting for one-third and two-thirds of the overall. On September 11, 2002, the Trademark Office rejected the trademark registration application because “the trademark graphic only directly reflects the appearance of the goods, and lacks distinctiveness and the function of trademark recognition”.
The applicant was not convinced and filed an appeal with the TRAB on September 25, 2002, with the following principal grounds: 1) the Trademark Office had wrongly interpreted the applicant’s color combination trademark as a graphic trademark; 2) the applicant’s trademark is a color combination of brass and black in a particular proportion, which is intrinsically distinctive; 3) the applicant has been using the logo in China for many years as a trademark for battery goods together with other registered trademarks in China, such as “DURACELL”, “Duracell in Chinese” and “Golden Energy in Chinese”, and the color combination of the applied-for trademark has been widely publicized by the applicant. Through the applicant’s long-term use and publicity, the color combination of the trademark has become the distinctive sign of the applicant’s battery goods, and consumers can distinguish the applicant’s goods from similar goods produced by others according to the characteristics of the color combination on the battery goods.
The applicant, Gillette Company, has proved the fact that it has used the color combination mark in combination with its word marks “DURACELL,” “Duracell in Chinese,” “Golden Energy in Chinese,” and other word marks through the submission of its advertising materials. The information proves the fact that the trademark has been used in a large number of advertisements. At the same time, Gillette submitted a large number of penalty decisions and court judgments issued by administrative organs such as the industry and commerce department, quality inspection, customs and local people’s courts against the counterfeiting of its distinctive color combinations, which proved that others had counterfeited its distinctive color combinations in large quantities to make the relevant public mistakenly believe that the counterfeited products were the applicant’s products. Gillette relied on the above evidence to prove that its color combination trademark had been publicized and used for a long period, the relevant public could associate the color combination trademark with the applicant, and it had played the role of distinguishing the source among the relevant public, thus obtaining the trademark distinctiveness.
On October 10, 2005, the TRAB decided the appeal and held that the trademark application belongs to Article 11(2) of the Trademark Law; it can be easy to identify and used as a trademark registration with distinctive features through the use, the application of the trademark shall be able to be initially approved. On December 7, 2005, the color combination trademark was preliminarily approved and approved for registration on March 7, 2006.
Therefore, for a new type of non-traditional trademark, such as a color combination trademark, where it is challenging to prove inherent distinctiveness, evidence that the applied-for trademark has acquired distinctiveness through long-term and extensive use plays a crucial role in successful trademark registration.
So, when a non-traditional trademark is registered, a third party may find it “lacking in distinctiveness” and file an invalidation. How should the owner of a non-traditional mark defend itself in such a case? The recent decision of the European General Court in Lidl Stiftung v EUIPO - MHCS (Nuance de la couleur orange) (T-652/22) concerning the orange mark for Veuve Clicquot Champagne suggests that, where an application for invalidation is attacking a trademark registered based on its distinctiveness, the assessment of whether the mark is distinctive can involve two points in time: 1) the date of filing and; 2) the filing of the invalidity application (Article 51(2) CTMR, Article 59(2) EUTMR). The invalidation application fails if the trademark owner in dispute can prove acquired distinctiveness on either date. However, the owner of the mark should be able to provide evidence of both points in time.
The situation in China can be summarized by the court case of the dispute of invalidation decision of the Registration No. 20426843 “Xiao Guan Tea” trademark (the disputed trademark).
Case Background
Beijing Xiaoguan Tea Co., Ltd. applied to the Trademark Office on June 24, 2016, for registration of the trademark “Xiaoguan Tea in Chinese” in Class 30 “Tea” and other related products, and the registration was approved on August 14, 2017, with registration No. 20426843. On November 08, 2021, Changzhou Kaigu Tea Food Co., Ltd. applied for invalidating trademark No. 20426843, “Small Can Tea,” for lack of distinctiveness. On August 30, 2022, the TRAB ruled that the trademark in dispute should be maintained. Changzhou Kaigu Tea Co., Ltd. appealed to the Beijing Intellectual Property Court.
Court’s view
Regarding whether the trademark in dispute violates the provisions of Article 11(1)(2) of the Trademark Law, the court held that the trademark in dispute is “Xiaoguan Tea in Chinese”, which was applied for registration on the goods of “tea; flowers or leaves used as tea substitutes; tea drinks; iced tea”, of which “tea” is the abbreviation of various teas, and “Xiaoguan” usually refers to the packaging of the product, “Xiaoguan Tea” literally means tea packed in small canisters. “Xiaoguan Tea” directly indicates the primary raw materials of the goods, as well as the product packaging features. It lacks the inherent distinctiveness that a trademark should have, and it violates the provisions of Article 11(1)(2) of the Trademark Law and shall not be registered as a trademark. However, Article 11(2) of the Trademark Law provides that the signs listed in the preceding paragraph can be registered as a trademark after use to obtain distinctive features and are easy to identify. Without inherent distinctiveness, the sign can still obtain distinctive features through actual, lawful, and effective use, thus obtaining registrability.
The court continues to interpret, in determining whether a sign has gained distinctiveness through use, the following factors should be taken into consideration: 1) the manner, effect, and role of the actual use of the sign, for example, whether it is used in the manner of a trademark; 2) the time, territory, scope, scale of sales and other business situations in which the sign has been continuously used; 3) the extent to which the sign is known to the relevant public; and 4) other factors in which the sign has gained distinctiveness through use.
The evidence in the case shows that the Xiaoguan Tea Company’s operating income in 2015 and 2016 was about RMB 2.73 million and RMB 62.51 million, respectively. It established a wholly-owned subsidiary, Huangshan Xiaoguan Tea Industry Co., Ltd., in 2016. The combined operating income of the said subject in 2017 and 2018 was about RMB 600 million and 1.6 billion. Combining the distribution contract and invoices submitted by the Xiaoguan Tea Company, honors received, advertising contracts, media reports, market research reports, advertising audit reports, and other materials, as well as the factual situation found in a number of civil judgments, the court held that the evidence could be determined that the trademark in dispute had become highly recognizable among the relevant public, and had formed a correspondence with the Xiaoguan Tea company, and had achieved, through its use, a distinctiveness that could be registered as a trademark. It can also play the role of distinguishing the source of goods. Therefore, the trademark in dispute has acquired the distinctiveness of being registrable through use, which is in line with the situation stipulated in Article 11(2) of the Trademark Law. The court concluded that the CNIPA’s decision to maintain the trademark in dispute was correct and rejected the plaintiff’s request.
In the judgment, the court particularly pointed out that the examination to determine whether the sign has gained distinctiveness through use should generally be based on the factual status when applying for trademark registration. However, suppose the party concerned has sufficient evidence to prove that the trademark in dispute has gained distinctiveness through actual and effective use after the filing date. In that case, the evidence will be considered together with the evidence after the filing date of the application for trademark registration in dispute from the perspective of economizing judicial resources and protecting the legitimate interests of the party concerned. Conclusions
It can be seen that Chinese courts believe that when a registered trademark, which has acquired distinctiveness through use, is sought to be invalidated by a third party for “lack of distinctiveness” (or possibly use), the time to determine whether the sign has acquired distinctiveness through use shall be based on the factual state at the time of applying for the trademark registration. Suppose the party concerned has sufficient evidence to prove the sign has acquired distinctiveness through actual and effective use after application. In that case, the court will also consider evidence after the date of filing the application for trademark registration in dispute. However, the case did not raise the question of whether, when a trademark registered for the acquisition of distinctiveness is invalidated, the trademark owner is required to provide evidence that the trademark was relevantly “distinctive” when the invalidation was filed. To ensure the mark’s stability during the invalidation process, we recommend that the trademark owner provide evidence of continuity between the date of filing of the trademark registration and the date of the filing of the invalidation.