The trademark of “新財富 NEW FORTUNE” was filed under No. 2011598 for registration with the Trademark Office on October 10^th, 2001 by Guangdong Xincaifu Co. Ltd. (which changed its name to Shenzhen Xincaifu Co. Ltd. on March 30^th, 2006, or New Fortune, for short), in Class 16 for “Newspapers, Periodicals, Magazines [periodicals], Newsletters,” (the opposed mark, of “NEW FORTUNE” with a Chinese equivalent), and was preliminarily approved for publication on October 16^th, 2001.

Time Inc. raised opposition to the trademark, which was overruled by the Trademark Office. It thereafter sought review with the Trademark Appeal Board (Board) on the grounds that FORTUNE magazine, first published in 1930 as a professional financial publication by Time Inc., enjoys a worldwide renown; that its Chinese companion, FORTUNE CHINA, first appeared in China in November 1996, was the first American magazine to be printed in simplified Chinese; the opposed mark was a simple combination of Time Inc.’s senior registered marks of “财富” (cited mark 1, Reg. No. 1136217 being Chinese equivalent of “Fortune”), and “FORTUNE” (cited trademark 2, Reg. No. 1136216); and that the combination is so similar in terms of meaning, pronunciation and overall appearance, as to be likely, when used by consumers, to cause confusion or mistake, in violation of the provisions of Article 28 of the Trademark Law of the People’s Republic of China (Trademark Law).

New Fortune responded by saying that the 新財富 (NEW FORTUNE in Chinese) originated, through change of name, from the 財富 magazine first published on May 26^th, 1993. The mark under opposition is a combination of Chinese and English words, having sufficient distinctiveness in its overall appearance and meaning from the cited marks, and therefore cannot be similar thereto. Therefore New Fortune introduced in evidence certain documents showing approval by General Administration of Press and Publication and Guangdong Administration of Press and Publication of its first publication of the 財富 magazine on May 26^th, 1993 and of the change of name to 新財富 in March of 2000.

The Board decided on March 29^th, 2010 and cancelled the registration for the opposed mark with the opinion that the opposed mark is similar in overall appearance and pronunciation to the cited trademarks as combined, and lacks distinctiveness in meaning as a combination, and is likely to cause confusion to consumers when used in connection with periodicals and newspapers; therefore, the opposed mark, when used on similar goods, constitutes similar trademark to either cited mark 1 or cited mark 2. The evidence introduced by New Fortune, though sufficient in showing the change of name from Fortune to New Fortune (in Chinese), failed to prove, however, that New Fortune, as a company, was the creator of, or had connection with, either of the aforementioned magazines. New Fortune, dissatisfied with this decision, filed a lawsuit in court within the statutory period.

The trial court found no likelihood of confusion among relevant consumers as to the distinction between the opposed mark and the cited marks which, when used in connection with periodicals or magazines as designed, would usually be recognized as the names of their respective publications; any subtle verification of the names therein, in the relevant readers’ discriminative eyes, would usually have relatively significant discriminative effect on distinguishing goods such as newspapers and periodicals etc. Moreover, when used as titles of magazines, both the Chinese “财富” and the English word “FORTUNE” would be taken as highly descriptive of the contents therein, and therefore weak for trademark functions as a mark or component of a mark. Under such circumstances, the addition of “新” to the Chinese portion and the word “New” to the English equivalent in the opposed mark may further enhance the distinctiveness. Therefore, the differences between the opposed and the cited marks are sufficient to eliminate consumers’ confusion, and the Board’s decision that the opposed mark, when used on similar goods, constituted a similar mark as to cited marks 1 and 2, cannot be sustained, and hereby reversed. Meanwhile, since the evidence introduced in the Board’s reviewing proceedings and in this court has established that the opposed mark used by New Fortune has formed a large consumer body, it would disturb the existing market stability and orderliness if registration is denied to the opposed mark.

Accordingly, pursuant to Article 54 (2), cl. 1 of the Administrative Procedure Law of the People’s Republic of China, the court decreed that: (1) the Board decision is vacated; (2) the case is remanded. The Board appealed.

Court of second instance held that the opposed trademark and the cited trademarks vary greatly in composing elements, arrangement mode, pronunciation, font and visual effects etc.; meanwhile confusion will not occur when considering the characteristics of the magazines and periodicals. Therefore, the opposed trademark and the cited trademarks are not similar trademarks. Moreover, evidences provided by New Fortune proved that the opposed trademark has been used for a long time, and has already established a comparatively high market reputation and attracted a wide range of consumers, the rejection of the opposed trademark registration is adverse to the existing market and market order. For the above reasons, on the ground of the Administrative Procedure Law of the People’s Republic of China, Article 61, cl.1, the Court of second instance rejected the appeal and upheld the original judgment.

In the practice of trademark registration in China, registration in Class 16 for “Newspapers, Periodicals, Magazines [periodicals], and Newsletters” has considerable differences than in other classes. Though there are no specific provisions neither in the current laws and regulations nor in judicial interpretations, learning from the ruling of the above case and other judicial practices, several factors should be taken into consideration during the trademark registration and examination process under Class 16.

According to Article 16 of the Opinions of the Supreme People’s Court on Several Issues Concerning the Trial of Administrative Cases Involving the Authorization and Determination of Trademark Rights (Opinions), “The people’s courts should establish similar trademark judgment standards, considering both the similarity of the elements of the trademark and the trademark as a whole, and the distinctive character and repute of the relevant trademark and the association of the goods in respect of which the trademark is used depending on the likelihood of confusion.” As to whether confusion is likely, that will be based on the cognition of the relevant publics, therefore it is particularly important to determine the scope of the subject matter of the relevant publics.

According to Article 15, “Distribution channels and consumer groups should be taken into account when determining similar goods.” But for goods with special characters such as magazines and periodicals, different distribution channels indicate different consumer groups, and moreover the relevant publics have already distinguished trademarks apart in the practical market place. In the trademark infringement case FAMILY magazine v. Beijing Liken Co., Ltd, the Beijing Higher People’s Court pointed out, “The distribution channels of both parties are not overlapping, and therefore consumers will not be confused as to the sources of the goods.” So when judging trademark similarities of magazines and periodicals, factors such as distribution channels and consumer groups should be taken into account, and determining the relevant publics that may be confused from the perspective of distribution channels.

The aforesaid is especially true for newspapers and periodicals circulated through different channels within China. According to the Notice of Prohibiting Unauthorized Subscription and Distribution of Foreign Newspapers and Periodicals in Mainland China, which was promulgated on March 11th, 1994 by the State Council Information Office and General Administration of Press and Publication, circulation of foreign newspapers and periodicals in mainland China should be conducted by qualified publication import units, and agencies of foreign publications located in China are not eligible for subscription and distribution business themselves or through channels in China of other Chinese institutions aboard. At present, foreign newspapers and periodicals adopt restricted circulation mode, so they have limited contact channels with their consumers, and cannot be mixed up with newspapers and periodicals which have no restrictions in circulation. Take the present case as an example, according to the approval made by the General Administration of Press and Publication, the FORTUNE CHINA magazine published by Time Inc. can only be sold to foreigners in hotels, while NEW FORTUNE magazine can be published without any restrictions in China. Based on the great discrepancy of the distribution channels of those two magazines, their consumers obviously differ, even though certain overlapping circumstances may exist. For example, foreigners in hotels who read NEW FORTUNE magazine may also read FORTUNE CHINA, but except for foreigners in hotels, members of other relevant public who have no access to FORTUNE CHINA are not likely to be confused by these two magazines.

The purpose of having a trademark system mainly lies in securing trade and maintaining business ethics. Accordingly, the recognition standards which are used to determine the possibility of causing confusion should be based on the common knowledge perceived by general consumers. The relevant public may pay more attention to goods with higher prices such as houses and cars than goods with lower prices such as daily necessities during purchasing processes. Professionals always choose the following example for illustration. The trademarks “HONDA” and “HYUNDAI” are very similar, but no one will be misled by the trademarks during the purchase. This proves that the attention of relevant public directly influences the likelihood of confusion of the trademarks. Besides the value of goods, other features of goods can also influence relevant public’s attention and their recognition of the source of goods. Newspapers and periodicals, as a significant approach to acquire information, update knowledge and take recreational activities for the relevant publics, their main consuming pattern is reading, and their consumers are more sensitive to information expressed by written materials and more likely to know the source of goods. Therefore, because of the recognition habits of relevant publics of newspapers and periodicals, a tiny change of the publications’ name could be recognized, the differences between the opposed trademark and the cited trademarks are readily distinguishable, and may not cause confusion and misidentification to the relevant publics. Moreover, in the thesis written by staffs of the Trademark Office, the author believed that for consumers of newspapers and periodicals are assumed of having better education background and recognition ability, so compare with other goods, the determination criteria of trademark similarities of newspaper and periodicals are more flexible. The author took FORTUNE v. NEW FORTUNE as an example, and held that the opposed trademark and the cited trademarks are not similar and should be approved of registration.

As set forth in Article 16 of the Opinions, the popularity of relevant trademarks should be taken into consideration during the judgment of trademark similarity. The popularity of the trademark should be restrained strictly to the goods and symbols. If a trademark of a good has acquired great popularity through long time use, but for some reasons, the good adopted a new symbol, the popularity of the earlier trademark cannot be applied to the new symbol. This is especially true to publications which are circulated both at home and aboard. It is quite necessary to adopt different names for the publications distributed in different countries, and this is helpful to estimate the popularity of publications with different names and trademarks. Moreover, whether the popularity of a foreign trademark will influence its trademark in other countries and to what extent the influence is should be taken into consideration.

Going back to the case FORTUNE v. NEW FORTUNE, evidence can prove that the professional business magazine FORTUNE was first published by Time Inc. in 1930 and has won world fame; on the one hand, however, when the Chinese version of FORTUNE magazine started publication in November 1996, it adopted a new name of FORTUNE CHINA instead of using the old one, without other evidence, the popularity of FORTUNE magazine cannot be assumed naturally applied to FORTUNE CHINA, on the other hand, FORTUNE CHINA was first published in Hong Kong when its sovereignty was not transferred to China, and the communication between Hong Kong and China Mainland was far less than now. The subscription and circulation of foreign newspapers and periodicals are strictly restricted. Under the circumstance of lacking evidence, the popularity of the name and trademark of FORTUNE magazine did not extend to FORTUNE CHINA before the registration of the opposed trademark in China. This is another crucial factor when judging the similarity of trademarks.

As stated in Article 1 of the Opinions, when dealing with opposed trademarks which have been used for a long time and have already established high market reputation and attracted relevant publics, the legislative spirit of Trademark Law, which is to protect the prior rights of trademarks while maintaining the market order should be fully grasped. Meanwhile, the recognition of different trademarks perceived by relevant publics in the market practice should be respected; the existing and steady market order should be maintained. Kong Xiangjun, Chief Judge of the IP Tribunal of the Supreme Court of China indicated recently that disputes in some cases have complex and long-lasting historical reasons. To solve such disputes fairly and justifiably under current situation, formation, development process as well as the current situation of the disputes must be considered. This applies to general administrative cases of trademark authorization and determination as well as cases of trademark registration related to newspapers and periodicals.

As in the case FORTUNE v. NEW FORTUN, 財富 magazine adopted NEW FORTUNE as its new name since March 2000, which can be proved from the rename approvals delivered by General Administration of Press and Publication of the People’s Republic of China and Administration of Press and Publication (Copyright Bureau) of Guangdong Province respectively, who also delivered the establishment approvals of the 財富 magazine.

The cited trademarks (applied for registration on October 11th, 1996 and was granted on December 21st, 1997) had acquired exclusive right earlier than the opposed trademark; however, for NEW FORTUNE is the renewed name of 財富 magazine which stared publication in 1993, the use of “財富” in magazines is earlier than the application date of the cited trademarks. “Competition has evolved from liberal economy principles to principles of business ideas and intelligence creation, which means that the free imitation principle allows anyone to imitate business ideas, inventions, works and signs once they have been opened to publics.” Because there is no evidence to prove the illegal application of “財富” in 財富 magazine which started publication in 1993, under the circumstance of the already existing relevant publics and market order driven by this magazine, the coexistence of the opposed a trademark and cited trademarks are acceptable and in accordance with the reality.