I. Background

On August 15^th, 1979 and February 15^th, 1986 respectively, upon approval by the Trademark Office of the State Administration for Industry and Commerce, Nikon Corp. acquired the exclusive right to the use of the registered trademarks “Nikon” No. 97095 and “尼康” No. 243268 on camcorders and cameras, said registrations being duly renewed and effective. Nikon established its Beijing Representative Office on December 18^th, 1985, and set up affiliates companies in Guangzhou, Shanghai and other cities under the name Nikon since March 1996. From 1980 to 2009, to promote the brands of “Nikon” and “尼康,” it advertised through outdoor media, central and local TV stations, major websites, and newspapers and magazines. Nikon also exhibited its products on tradeshows and sponsored international sports events. With many awards and the national coverage, the “Nikon” and “尼康” branded products were among the most popular digital camera brands in the Chinese market.

Jinhua Five Star Elevator Co., Ltd. was incorporated in March 2003, changed its name to Jinhua Five Star Electric Bicycle Co., Ltd. in May 2001 and Zhejiang Nikang Electric Bicycle Co., Ltd. in June 2006 (“Zhejiang Nikang”), and has been engaged in the manufacture and sale of electric bicycles, used “尼康” and “NICOM” on its website and as decorations of its stores, and branded its products as “尼康.” Its electric bicycle products were sold jointly by Taihua market and Zhu Guoping.

Plaintiff Nikon argued that the use of “尼康” and “NICOM” by Taihua market, Zhu Guoping and Zhejiang Nikang infringed upon Nikon’s exclusive right to the use of the above registered trademarks. The use of the distinctive “尼康” mark as a business name by Zhejiang Nikon constituted unfair competition. Therefore, it brought an action, seeking injunction against infringement of the exclusive right of Nikon to the use of the registered trademarks “尼康” and “Nikon,” and against Zhejiang Nikon for unfair competition by using “尼康” as its business name, and damages of 2,000,000 yuan, and recognition of the trademarks “Nikon” No. 97095 and “尼康” No. 243268 as well-known marks.

At trial, the Intermediate People’s Court of Xi’an held that electric bicycles and cameras are listed in different classes of goods. At Nikon’s request, the trademarks “Nikon” No. 97095 and “尼康” No. 243268 were found to be well-known marks. Zhejiang Nikang used “尼康” (which was identical with the registered trademark “尼康” of Nikon) and “NICOM” (which was similar to the registered trademark “Nikon” of Nikon) in a way that was sufficient to confuse the relevant public on the source of its products. It infringed upon the exclusive right of Nikon to the use of the registered trademarks. Taihua market and Zhu Guohua jointly sold the products that bore the registered trademarks. They also infringed upon the exclusive right of Nikon to the use of the registered trademarks. Zhejiang Nikang renamed itself as “尼康” when Nikon had achieved a fame in the market. It obviously contained an intention to ride on the commercial goodwill of Nikon, and its act was enough to cause the relevant public to confuse, misbelieve or to associate its products with those of Nikon. This constituted unfair competition against Nikon. In view of the above, the court decided that Taihua market, Zhu Guoping and Zhejiang Nikang be enjoined from infringement upon the exclusive right of Nikon to the use of the registered trademarks “尼康” and “Nikon”; Zhejiang Nikang stop using “尼康” in its business name; and Zhejiang Nikang pay Nikon 200,000 yuan for the loss sustained by Nikon. Following the judgment, no party appealed, and the judgment has come into force.

II. Laws on the protection of well-known marks

A well-known mark is a trademark that is well-known to the relevant public within the territory of China. The “relevant public” here means operators and consumers who purchase and use the products or services identified by such trademark, or the audience of the advertisements for such products or services.

Article 6^bis of the Paris Convention for the Protection of Industrial Property, which is the cornerstone of the international protection for well-known marks, provides that:

(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith. (2) A period of at least five years from the date of registration shall be allowed for requesting the cancellation of such a mark. The countries of the Union may provide for a period within which the prohibition of use must be requested. (3) No time limit shall be fixed for requesting the cancellation or the prohibition of the use of marks registered or used in bad faith.

These provisions protect both registered trademarks and well-known (unregistered) trademarks against a reproduction, an imitation or a translation of such marks that is liable to create confusion in the market.

Article 16.3 of the TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) provides that:

Article 6^bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.

These provisions expanded the scope of protection for well-known marks, by granting cross-category protection to and emphasizing the protection for the reputation of well-known marks. However, undeniably neither the Paris Convention nor the TRIPS Agreement provides a definition of what is “well-known.” The Joint Resolution Concerning Provisions on the Protection of Well-Known Marks, adopted by the WIPO in 1999, lists a few factors in the determination of well-known marks, noting that registration and use are not a precondition for well-known status, nor does it have to be generally known to the public for being well-known. A well-known mark can be used against a conflicting mark, business name or domain name. It defines the “offending mark” as one that would “impair or dilute in an unfair manner the distinctive character of the well-known mark” and “take unfair advantage of the distinctive character of the well-known mark.”

In China, the legislative practice on the protection for well-known marks began with the well-known mark-related provisions of the Paris Convention, and was influenced by the TRIPS Agreement thereafter. The first version of the Trademark Law, promulgated in 1982, did not contain provisions on the protection for well-known marks. The Provisional Rules on Determining and Managing well-known marks, promulgated by the State Administration for Industry and Commerce on August 14^th , 1996, was the first regulation on the protection for well-known marks, which defined the well-known mark and the criteria for determining it. The Interpretation on a Few Issues in the Application of Laws in the Trial of Civil Disputes over Domain Names of Computer Network, published by the Supreme People’s Court in 2001, was the first judicial interpretation on the legal effect of well-known marks determined by the judiciary, which, however, was limited to “disputes involving domain names” and “registered trademarks”. Thereafter, the revised Trademark Law and the Interpretation on a Few Issues in the Application of Laws in the Trial of Civil Disputes over Trademarks further established the judicial protection system for well-known marks, to extend it to trade-mark related disputes. However, for the heating up of the judicial protection for well-known marks, the Supreme People’s Court issued special rules on the filing and central administration of well-known marks. It published the Interpretation on a Few Issues in the Application of Laws in the Trial of Civil Disputes over Well-known Marks on April 22^nd, 2009, which became effective on May 1^st. The above provisions constitute the legal basis for the judicial protection for well-known marks in China.

III. Legal nature of and case types involved in the judicial determination of well-known marks

Whether a mark is well-known or not is a dynamic state of fact, which depends upon how the owner operates and maintains it. The judicial determination process is to determine the fact of a legal element required in the protection for well-known mark-related rights in individual cases. This fact determination does not amount to a separate claim, and is stated in the reasoning part other than in the main body of the court ruling. Then, will a well-known mark decided by an administrative authority or a people’s court be directly used as evidence without re-determination? Obviously the answer is “No”. This is because as opposed to other stable facts decided by courts, a well-known mark is a changing process, which cannot be directly used as evidence. It will not have to be re-determined, if not challenged by a party concerned; otherwise, the re-determination must be done. This can be further explained by the non-applicability of the self-admission principle for the judicial determination of well-known marks.

In the present case, Zhejiang Nikang did not accept that the disputed registered trademarks of Nikon as well-known marks, though they had been decided as such by the State Administration for Industry and Commerce. Also, the dispute occurred at a time node different from that of the previous one. Further, whether a trademark is well-known or not is a dynamic fact. In light of the above, the fact that whether the trademarks involved were well-known at the time of the dispute has to be determined by the court.

The authors are of the opinion that the types of cases where the well-known mark determination is required should be limited strictly in accordance with relevant legal provisions. Article 2 of the Interpretation on a Few Issues in the Application of Laws in the Trial of Civil Disputes over Well-Known Marks provides that:

In the following civil dispute cases, when a party bases its claim on the fact that a trademark is a well-known mark, the people’s court shall determine whether such trademark is well known, if it believes it is necessary to do so, subject to the circumstances involved: (1) A trademark infringement action is brought on account of a violation under Article 13 of the Trademark Law; (2) An action of trademark infringement or unfair competition is brought on account of a business name that is identical with or similar to a well-known mark...

Article 6 provides that:

Where the plaintiff brings a civil action on the account that the sued trademark has been used to infringe upon its exclusive right to the use of a registered trademark, and the defendant raises a defense or a counterclaim that the registered trademark of the plaintiff is a reproduction, an imitation or a translation of the sued trademark which is a pre-existing unregistered well-known mark, the defendant shall bear the burden to prove such pre-existing unregistered well-known mark.

As shown, generally speaking, it is impossible for a court to determine whether a trademark is well-known or not, unless in civil dispute cases of trademark infringement or unfair competition where a party requests an order for the opposite party to stop infringing upon a well-known unregistered trademark or the cross-category protection for a registered trademark, or where a business name conflicts with a well-known mark. Moreover, in the case a party requests the well-known mark determination, the court will not have to do this, if the case is settled through mediation, the alleged infringement is not established, or whether or not the trademark is well-known is irrelevant to the determination of the alleged infringement (including the conflict between a domain name and a well-known mark, or whether they are used on products or services that are identical to or similar with each other). The well-known mark determination is not necessary, so long as other laws may be applied to settle the dispute and protect the legal interests of the plaintiff. In the present case, Nikon, which owned the disputed registered trademarks “Nikon” and “尼康” and the business name “尼康,” argued that these registered trademarks had been used by Zhejiang Nikang in a category of goods different from the category registered for such registered trademarks, and that the business name “尼康” had been used by Zhejiang Nikang to compete against Nikon unfairly. It requested that the court examine and determine whether such registered trademarks were well-known, which complied with the case types specified in the relevant law for the well-known mark determination. Therefore, formally the court may determine whether such registered trademarks were well-known or not.

IV. Principles applicable to the judicial determination of well-known marks

Article 22 of the Interpretation on a Few Issues in the Application of Laws in the Trial of Civil Disputes over Trademarks provides that “In the trial of a trademark dispute case, the people’s court may determine whether the trademark concerned is well-known or not, if so requested by a party, subject to the circumstances involved.” This shows that courts determine well-known marks pursuant to the passive principle other than ex officio: they will not do it unless a party so requests and unless the circumstances so require. Then, will they do it by themselves, or by submitting the trademarks concerned to a competent authority for central determination at certain intervals, or in ways at their own discretion? In practice, an administrative mode ever existed where the trademarks concerned were universally sent to a competent authority for determination. With the establishment of the judicial determination system for well-known marks, a consensus has been reached on the fundamental principles to follow in the judicial determination, which have also been explicitly stipulated in law. These principles are that the determination of well-known marks should be done passively, on case-by-case basis, and only if it is necessary to do so. The “passive” principle means that the determination is done ex post facto. After the infringing act has occurred, following the request of the holder of the trademark concerned, subject to the circumstances involved, the court determines whether the trademark concerned is well-known, to create a precondition or a factual basis for the protection for such trademark.

The “case-by-case” principle means that the well-known mark determination may be done only within other than without a given case. The “necessary” principle means that the determination is done on the facts that the court finds from the trial of the case, and on the necessity of the application of laws. It should be noted, however, that the plaintiff that has registered more than one trademark requests the court to carry out a well-known mark determination on all such trademarks. We argue that where the plaintiff claims more than one trademark as a well-known mark in a single action, if the interests of the plaintiff can be protected by determining one of the trademarks is a well-known mark, it will be unnecessary for the court to determine the remaining trademarks. This is because one well-known mark is enough to protect the legal interests claimed by the plaintiff, and it will be meaningless in practice to determine if the other trademarks are also well-known marks. In the present case, Nikon requested the court to determine whether the two registered trademarks were well-known marks. According to the needs principle, the legal interests of the plaintiff can be sufficiently protected so long as one other than all the trademarks concerned is determined as well known. Therefore, the court determined only one of the two trademarks of Nikon. The judgment fully complies with the passive principle, the case-by-case principle and the necessary principle.

V. The cross-category protection for well-known marks

The cross-category protection for well-known marks constitutes an exception to the principle of specialty for trademarks. Its scope is concerned with the balance between fair competition and free competition. It offers protection only if a trademark confuses or damages a mark that is well-known. It should not be so broad as to cover all categories of goods, nor so narrow as to be unable to protect against possible damage to a well-known mark. Instead, it should be appropriate, that is, the scope of protection should be reasonably determined for a given well-known mark.

Moreover, it should be noted that the protection scope may be improperly expanded, and the rights under it misused. The width of the protection scope is proportional to the well-known extent and the distinctiveness of a trademark. It is wider if the trademark is more popular. In the present case, are cameras and electric bicycles similar goods, though they are not identical? Simply speaking, an electric bicycle is a transport vehicle that uses electricity as its driving force and source of energy. A camera is a device that forms an image of an object according to the optical imaging principle, and records such image on a plate. It is an optical device for photography. An electric bicycle and a camera are different from each other in the following aspects: (1) their intended uses. An electric bicycle is mainly used as a transport vehicle, and a camera is mainly used to record images; (2) their manufacturers. An electric bicycle is manufactured by a manufacturer of vehicles, and a camera is manufactured by a manufacturer of photography equipment; and (3) their sales channels. An electric bicycle is often sold separately through a specialty shop or a dedicated shop in a centralized and market-like manner. The sales channel clearly tells consumers what major products the shop sells. A camera is often sold together with other electronic products through a specialty shop or a dedicated shop. However, common consumers are able to distinguish the sales place for cameras from the sales place for electric bicycles.

The above show that due to salient differences between an electric bicycle and a camera in their functions, uses, manufacturers, sales channels and consumers, any one of the consumers or the relevant public can essentially distinguish an electric bicycle from a camera, and will not substitute one for the other in their uses or functions. They are not similar goods under the Trademark Law. The trademark “尼康” on cameras has been popular in China and the world. This super mark is so widely known among common consumers that it certainly deserves wider legal protection.

(Translated by Ren Qingtao)