Along with the accumulation of trial experiences, China administrative agencies and judicial agencies have developed a set of progressive practice for GI protection, and by these case studies, it is expected that GI protection, including foreign GI, will be further strengthened under the trademark regime.
Introduction
On November 6, 2019, the Ministry of Commerce of the People's Republic of China and the Directorate-General for Agriculture and Rural Development of the European Commission signed the Joint Statement on Conclusion of the China-EU Bilateral Agreement on the Cooperation on, and Protection of, Geographical Indications(GI Agreement), marking a milestone in the development of China-EU economic and trade relations. This GI Agreement is expected to facilitate more GI products exports and further promote overall bilateral trade in foodstuffs and agriculture products, meeting consumers' demand for high quality products on both sides, while ensuring a high level of protection for EU and Chinese GI in their respective markets.
However, in contrast to the uniform sui generis regime in the EU, China has a trademark-sui generis dual system with triple parallel and overlapping legal frameworks, namely, GI collective or certification trademark regime, GI product mechanism and GI of agricultural product mechanism. Under this dual system, even if the EU GIs have been listed in the annex to the bilateral agreement, their application for registration as collective or certification marks shall still be examined in the same manner as domestic applications. China exercises a complete substantial examination on the distinctive character as well as the availability of trademark and applies this kind of examination equally to collective or certification marks. Although China trademark authorities have taken the characteristics of GI into account during trademark examination, the EU GI applicants or interested parties, when encountering conflicts with prior trademarks, have to face some insurmountable barriers. Actually, the GI-trademark conflicts and coexistence is the common problem faced by all of GI holders, no matter where they are from. Even within China, if a GI has got protection under GI Product mechanism, when seeking registration as collective or certification mark under trademark regime, the registration might also be obstructed owing to prior trademark obstacles. In this paper, the author will take some model cases in trademark review and adjudication proceeding concerning GI protection to study the principle for dealing with the GI-trademark conflicts and coexistence. Furthermore, given that the administrative review and adjudication decisions might be challenged in subsequent judicial review, the author will also discuss both the divergence and harmonization between the administrative agencies and the judicial agencies.
Case Napa Valley
Napa Valley Vintners opposed the application for trademark registration of No. 4662547 "螺旋卡帕SCREW KAPPA NAPA"(螺旋 is the Chinese translation for SCREW and卡帕 is the Chinese transliteration for KAPPA) (the opposed trademark) which was registered by an investment company located in China and designated for use in goods including wines, the main ground being that the opposed trademark is similar to its prior application for certification mark registration of No. 4502959"NAPA VALLEY 100% and device" (the cited trademark) havingsimilarly-designated goods, such as wines, sparkling wines and carbonated wines, which originate from the American's wine region Napa Valley.
Both the opposition proceeding and the review of opposition proceeding ruled that the opposed trademark is not similar to the cited certification trademark. However, the Beijing High People's Court ruled that they are similar trademarks. And on this basis, although the opposed trademark contains only a part of the GI Napa Valley, "NAPA" is the distinctive part in this GI, therefore, the opposed trademark is still likely to make the public calling this GI to mind and, as a result, mislead the public into thinking that the goods bearing the opposed trademark originated from the region indicated by this GI, the application of the opposed trademark violates Article 16 subparagraph 1 of the China Trademark Law.
By this case, the author will discuss the following key issues: firstly, is it appropriate to compare the similarity between a GI and an ordinary trademark? Secondly, should the same criteria be applied for examining the similarity between a prior GI and a subsequent trademark or between a prior trademark and a subsequent GI? Thirdly, how can the similarity between a GI and an ordinary trademark be determined, where the trademark is comprised of only a part of the components of GI, particularly a foreign GI comprised of several words?
Is it appropriate to compare the similarity between GI and ordinary trademark?
It was unquestionable at all till the beginning of 2014. On January 22, 2014, the Beijing High People's Court published the Guidelines on Judicial Review of Administrative Cases on Granting or Determining Trademark Rights, with regard to the recognization and protection of GI, it pointed out that courts should not accept a claimant's argument that the subsequent registration of a GI as collective or certification mark should be refused or invalidated on the ground that the subsequently-registered GI is similar to the claimant's prior-registered ordinary trademark and therefore violates Article 13 subparagraph 3 or Article 30 of the China Trademark Law, and vice versa. This guideline means that the courts should refuse to conduct any determination as to whether a GI is identical with or similar to an ordinary trademark, no matter whether the application date of GI registration as collective or certification mark is before or after the application date of the ordinary trademark. Virtually, this guideline excludes relative grounds examination from the trademark registration or adjudication proceedings and subsequent judicial review in cases concerning GI. The logic behind this guideline is that the courts held that there is a fundamental difference between the function of trademark and that of GI, consequently, it is not appropriate to make comparisons between two signs bearing two types of rights that completely differ from each other in nature completely. As a result, trademark and GI may co-exist even if they are similar or even identical. After the publication of this guideline, more administrative decisions made by the Trademark Review and Adjudication Department (TRAB) were reversed on judicial review because the conclusion of said judgments were based on similarity between ordinary trademark and GI. The view of this guideline has become so prevailing that it might affect the formulation of the Judicial Interpretation on Certain Issues Regarding Administrative Cases on Granting or Determining Trademark Rights promulgated by the Supreme People's Court of PRC.
1.1 From the perspective of average consumers
However, through the eyes of average consumers, when they encounter two identical or similar signs used in identical or similar goods at the market, how can they and why should they tell which one is a trademark and which one is a GI? Why should they recognize the different functions and natures between two signs having identical or similar appearance? How could they, therefore, avoid being confused or misled about the origin of the goods?
1.2 From the perspective of international or regional reference
When we examine this view of the courts from the international horizon, we can not find any reference in the TRIPS Agreement at the international level, or the EU Regulation 1151/2012 and the EU Regulation 2015/2424 at the regional level. Even in the Settlement Case DS174, what the US complained about was the EU resolution rule of coexistence of GI and trademark, but this did not mean that the EU permits such coexistence unconditionally. None of the WTO, the US and the EU denied the objective existence of the conflict between trademark and GI on the grounds that it is needless to compare two signs bearing different kinds of rights. Further, it is expressly stated in the GI section of the Trans-Pacific Partnership Agreement that the likelihood of confusion with a prior trademark, or the prior application or registration of a trademark in good faith shall be included as grounds for opposition to, cancellation and refusal of a GI under administrative proceedings, whether through a trademark or a sui generis system.
1.3 From the perspective of national law
From the perspective of national law, if a GI has been recognized and protected under the China Trademark Law as a collective or certification mark, there is no provision treating them as a separate category, but the guideline of the Beijing High People's Court does treat such separately. The rationale of this guideline is the denial of the distinctive function of a GI collective or certification trademark, but the deeper reason might be rooted from the view that the trademark regime should not be taken as one of the legal means to protect GI. However, China is a civil law country after all, this view might go too far away from the current legal framework.
1.4 From the perspective of consequence or potential risk
Firstly, it deprives the rights of a prior GI collective or certification trademark registrant to oppose or invalidate a subsequent identical or similar ordinary trademark. Some may suppose that a subsequent GI trademark applicant might benefit from this guideline despite of the coexistence of prior ordinary trademark; nonetheless, if the so-called "subsequent" GI trademark applicants want to claim their trademark rights acquired through "prior" actual use or their existing prior rights (other than trademark rights) such as independent GI product, they might find themselves trapped in another predicament, as described next.
That is, under the first sentence in Article 32 of the Chinese Trademark Law, to resolve the conflict between a trademark right and other existing prior rights, there should be an actual "prejudice" to the existing prior right. But according to the legal logic of this guideline, there would be no basis for confusion, how then could we examine such "prejudice"? And if the "subsequent" GI trademark applicant wants to claim its prior trademark right acquired through actual use based on the grounds of protection for unregistered well-known trademark under Article 13 paragraph 2, or on the grounds of protection for unregistered trademark with certain popularity through actual use under the second sentence in Article 32 of the Chinese Trademark Law, such might be impossible given that the courts do not think that there exists the likelihood of confusion between a GI and another ordinary trademark.
Thirdly, and more importantly, because the relative grounds for refusal are mirrored in the provision on trademark infringement, if the comparison on identity or similarity is not accepted by the courts, and then the likelihood of confusion including likelihood of association is denied, how then should the proprietor of a GI exercises its right against trademark infringement?
This divergence between administrative authorities and judicial authorities on whether the relative grounds should be examined would lead to a large volume of coexistence of GI and trademark in market and the owner of GI cannot find powerful means to protect its GI under the trademark regime. The view from the courts runs counter to the institutional arrangement on GI protection under the trademark regime, and departs from the practice developed by trademark administrative authorities for ages, which jeopardize the reliance interest of GI right holders and then goes against GI protection.
1.5 Harmonization through practice
Fortunately, this divergence could be harmonized through practice. Along with the accumulation of cases, the courts realized that this guideline needed to be amended, and reached a consensus with administrative authorities gradually. Just from this Napa Valley case, the Beijing High People's Court recognized that the examination on relative grounds should be carried out between different sub-categories of trademarks without any discrimination, provided that they are applied for registration as trademarks and there are no any provisions of China Trademark Law that specially applies to any special sub-category of trademarks, it is not the role of courts to play as legislature indeed.
GI-trademark conflict and coexistence – especially the conflict between prior trademarks and subsequent GI
It has been a consistent practice to refuse a subsequent application for trademark registration if it is identical with or similar to an existing GI in the practice of trademark examination. But in the opposite case, should the same criterion apply? As we know, due to the long and rich experiences on GI protection, in most situations in the EU, GIs have been protected before the application for registration of identical or similar trademarks. But on the contrary, under the situations in China, the history of GI protection is much shorter than that for trademarks, thus, in most cases in China, when GI seeks for registration under the trademark regime, it always has to face the obstacles of prior trademarks. How should we strike a balance to ensure GI protection without detriment to prior trademark rights?
2.1 Two mainstream conflict resolution principles
There are two mainstream principles for resolving the conflict between GI and trademarks. One is to respect the intellectual property tenet of "first-in-time, first-in-right", this doctrine is vigorously advocated by the US and promoted by the International Trademark Association. The other is to permit the coexistence of subsequent GI and prior trademark conditionally; this approach is adopted by the EU and has been accepted by the WTO. By this approach, a subsequent PDO or PGI can coexist with an earlier trademark on the conditions that the earlier trademark lacks reputation and renown, and has not been used for a long time, so that the coexistence is unlikely to mislead the consumers as to the true identity of the product.
And an earlier trademark may continue to be used and renewed provided that the trademark right has been applied for, registered or established by use in good faith and there are no grounds for its invalidity or revocation under Trademark Law. In such cases, use of the subsequent PDO or PGI can coexist with use of the earlier trademark. In the Dispute Settlement Case DS174, the US complained this EU approach was in favour of strong protection for GI with restraint of earlier trademark right to some extent, the exclusive right conferred to owners of earlier trademark should not be undermined, but rather, they should still enjoy rights such as to prevent the use of subsequent identical or similar GI in identical or similar goods according to Article 16.1 of the TRIPS Agreement. However, the EU approach was justified by the WTO Panel Report under Article 17 of the TRIPS Agreement, that is, the limited exceptional coexistence allowed in the EU was compatible with the exceptions prescribed in Article 17.
2.2 Adjudication criteria on this conflict in china
In China, the Trademark Review and Adjudication Department has developed a set of adjudication criteria to resolve the conflict between GI and trademarks in practice, and reached consensus with judicial review agencies gradually. These adjudication criteria stress that high attention should be paid to the characteristics of GI, and stress that the reputation, distinctiveness, level of awareness of GI and the actual state of relevant market should all be fully taken into accounts. On the basis of these considerations, the adjudication criteria can be applied to following scenarios when a GI and a trademark are similar:
First, if the application date of a GI’s registration as collective or certification mark is after the application date of an ordinary trademark, the TRAB might tend to approve the subsequent GI application or maintain the subsequent GI registration on account that the subsequent GI is unlikely to confuse or mislead the consumers as to the origin of goods.
Second, in the opposite situation, the TRAB might tend to refuse or invalidate the subsequent trademark registration on account that the subsequent trademark would be likely to mislead the public and misappropriate the reputation of the GI.
Third, if the prior GI has been well-known to the public, it can enjoy stronger protection extending to non-identical, dissimilar or even unrelated goods or services designated by the subsequent trademark.
Fourth, if the prior trademark has been well-known to the public, it also can enjoy stronger protection crossing different categories of goods or services designated by the subsequent GI; however, it should be scrutinized whether the subsequent GI is likely to confuse or mislead the public and therefore harm the interests of the registrant of the prior well-known trademark.
In light of these criteria, a subsequent GI application for registration as a collective or certification mark may be approved, or its registration may be maintained, despite of the existence of a prior similar ordinary trademark under certain conditions. The underlying rationale lies in: although the GI application date of registration is later in time, the so-called registration is just a subsequent recognition of a pre-existing fact but not granting rights to a new creation. And in terms of unregistered trademark, GI has acquired factual distinctiveness so as to be capable of distinguishing its goods from those designated by a prior trademark. Secondly, it is the given qualities, reputation and other characteristics that ensure consumers to distinguish the specific goods bearing GI from other competing products bearing ordinary trademarks, in this sense, subsequent GI are unlikely to confuse or mislead the consumer as to the origin of goods. For all the above reasons, the coexistence of a subsequently-registered GI and a prior-registered trademark seems to restrict prior trademark rights more or less, but just as in the aforementioned EU approach, this restriction is compatible with the exceptions prescribed in Article 17 of the TRIPS Agreement.
2.3 Adjudication practice on this conflict
In fact, the cited trademark No. 4502959"NAPA VALLEY 100% and device" in the NAPA VALLEY case was approved successfully as a subsequent GI certification mark under this adjudication criterion. The cited trademark was opposed by a famous China wine company on the grounds that it was similar to its prior ordinary trademark No. 3216742 "NAVA VALLEY". In the meantime, Napa Valley Vintners filed a counterclaim with the TRAB to declare the prior trademark invalid on the grounds of its prior US GI. The TRAB judgments recognized the subsequent certification mark as a GI and ruled that the subsequent GI can coexist with the prior ordinary trademark because both of them possessed reputation and have been used for a period of time so that they could identify the true identity of the goods respectively. As to the prior trademark, it had been registered and used in good faith, and Napa Valley Vintners did not adduce any evidence to prove that the prior trademark was filed with the intention to free-ride on the prestige of its GI in the course of trade. Therefore, there were no grounds to declare it invalid under Chinese Trademark Law. These practices and criteria under China trademark regime correspond to the EU approach under sui generis regime to some extent.
How to determine the similarity
When determining the similarity between GI and ordinary trademark, if the trademark fully contains the GI, it is clear that they probably are similar. But many GIs, especially foreign GIs, are often comprised of several words. In such case, if the trademark contains the GI only partly, how should we determine the similarity?
Under this circumstance, it should keep the intention for GI protection in mind, take the likelihood of confusing or misleading consequence as to the true origin of the goods as the essential judgment criterion, and take the following factors into full account: the distinctiveness and reputation of the GI, the components of each sign, overall impression, the degree of similarity between the goods and so on. Applying this to the NAPA VALLEY case, the opposed trademark consists of "NAPA" and two other foreign words as well as four Chinese characters, and "NAPA" is merely one part of the GI "NAPA VALLEY". But "NAPA" is the key distinguishing component of the GI. Given the general public's awareness of this GI, the opposed trademark is still likely to mislead the public that the goods bearing the opposed trademark originate from the region indicated by the GI "NAPA VALLEY", and consequently cause consumer confusion. Therefore, the opposed trademark constitutes a similar trademark to the cited trademark, having identical or similar goods.
To sum up, it is enough to render a judgment holding that a trademark is similar to a GI only if the trademark consists of key elements of the GI and need not contain the GI fully, and then it is likewise enough to render a decision to refuse or invalidate such a trademark on the grounds that it is likely to confuse or mislead the public as to the true origin of the goods.
Conclusion
In trademark review and adjudication cases concerning GI, the administrative authorities and judicial authorities have reached certain consensus gradually on the most essential issues, which are: GI can, just like any other sub-category of trademarks, enjoy protection against subsequent trademark registration or against trademark infringement on the basis of the likelihood of confusion, including likelihood of association. In the light of the inherent characteristics of GI, particularly, factual distinctiveness and reputation, GI could coexist with prior-registered trademarks conditionally when in conflict with prior trademarks. The examination criteria might be applied more strictly when comparing the similarity between subsequent trademark and GI, where the trademark consists of key elements of the GI, even if only a part of GIs, GI can still be supported in the conflict with subsequent trademark under certain conditions. Along with the accumulation of trial experiences, China administrative agencies and judicial agencies have developed a set of progressive practice for GI protection, and by these case studies, it is expected that GI protection, including foreign GI, will be further strengthened under the trademark regime.
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