No law is orphanated or can be stand-alone, but an organic component of the entire body of law. A legal practitioner seeks, not a particular solution to the specifics of a case, but a solution of the entire legal system. The decisions in the companion cases of“散列通”and“散利痛” of the Supreme People’s Court, weighing equally between the Trademark Law and the Drug Administration Law, shows a proper legal solution to the cases, through correctly defining the critical dates for the legal attributes of the disputed trademarks, thereby giving protection for the legitimate rights and interests of the parties, and upholding the sanctity of law and the consistency of the legal order.

Southwestern Pharmaceuticals Co., Ltd. (“Southwestern”) entered into a contract with F. Hoffmann-La Roche AG (“Roche”) on November 12, 1987, under which Southwestern would, by using Chinese ingredients, manufacture, promote, market, and distribute in China an analgesic product under Roche’s registered trademark SARIDON (“散利痛”). Southwestern subsequently filed a trademark application on March 17, 1992 for “散列通” and secured a registration on February 28, 1993. Roche, on the other hand, filed for “散利痛” on August 12, 1996, which was approved on October 14, 2000. In 1999, Roche petitioned to cancel the “散列通” trademark registration on the ground that it conflicted with the prior right of Roche, and Southwestern also petitioned to cancel the “散利痛” mark, alleging that it was a generic name for the drug. On the “散列通” mark, the Trademark Review & Adjudication Board (TRAB, or the Board) found it to be semantically distinctive from “散利痛” whose meanings and functions were sufficiently different from each other, which an ordinary consumer would not mistakenly recognize as the same marks, thereby sustaining the “散列通” registration. On the Roche mark “散利痛”, the Board found it to be objectively indicative of the source of the product and not an unregistrable generic name as defined under the provisions of Article 11 of the current Trademark Law, Sub-article 1, para. 1, and also sustained the mark.

Roche, dissatisfied with the Board decision on the “散列通” mark, and Southwestern, dissatisfied with the decision on the “散利痛” mark, filed their respective appeals in the Beijing No. 1 Intermediate People’s Court.

1. The “散利痛” mark. The court of first instance was of the opinion that in determining whether “散利痛片” (an equivalent to SARIDON tablets) was a generic drug name, it should be based on whether the word was widely used [as such] in the pharmaceutical industry, and the drug standards promulgated by the government should not be the sole source to rely on for determining trademark genericness. Although “散利痛片” was listed in the Drug Standards of Sichuan Province and City of Shanghai when Roche filed for the “散利痛” mark in 1996, the fact of the two listings per se would not of necessity be conclusive that “散利痛片” is a generic name. The trial court thus affirmed the Board’s decision that the “散利痛” registration be sustained. Dissatisfied with the court ruling, Southwestern further appealed to the Higher People's Court of Beijing. The court of second instance found that “散利痛片” was listed as a drug name in the Drug Standards of Sichuan and Shanghai in 1988 and 1995 respectively, but these two local standards were ceased, corrected and superseded by a uniform national standard in 2001; moreover, the “散利痛” mark objectively functioned to indicate the source of the goods, and should be registrable as a trademark. The court rejected the appeal and affirmed the decision below.

2. The “散列通” mark. The court of first instance was of the opinion that despite the fact that the “散利痛” mark, being a Chinese equivalent of the registered mark SARIDON in Latin, was not registered in China then, it was created and used extendedly by Roche, which has built certain reputation for the mark as a result. The two marks “散列通” and “散利痛”, both used on the same products of western medicine, and both being of the same word order and style, should constitute similar marks. Being fully aware that “散利痛” was a trademark owned and previously used by Roche with resulting fame, Southwestern obtained its trademark registration “散列通” in contradiction with the provisions of Article 31 of the Trademark Law, and running afoul of the fundamental principle of "good faith" as required by the Civil Code, which constituted an act to "obtain the registration of a trademark through fraudulent means" under Article 41 of the Trademark Law. The court directed that the TRAB remove the “散列通” mark from the register. Dissatisfied, Southwest again appealed to the Higher People's Court of Beijing. The court of second instance found the disputed mark of “散列通” was of the same word order and style as that of “散利痛”, with similar pronunciation, which should be determined as similar marks; Southwestern had used “散利痛” as a mark or product name between 1987 and 1992 with permission under the contract with Roche; Southwestern obtained a registration of the similar mark “散利痛” at the expiration of its contract, with full knowledge of the ownership of “散列通”, which has constituted  with bad faith registration. The court rejected that appeal and affirmed the decision below.

3. Supreme People’s Court review. Dissatisfied with the decisions of the Higher People’s Court of Beijing on the two cases, Southwestern  resorted to the Supreme People’s Court for reexamination. The Court overruled Southwestern’s petition in the “散利痛” case ((2007) XingJianZi No. 111-1, Jan. 13, 2009) by affirming the decisions below, as it found the “散利痛” mark to be distinctive and the registration proper, since the mark, once as generic when listed in the Sichuan and Shanghai Drug Standards, was no longer so after the October 31, 2001 national promulgation of uniform standard. As to the “散列通”case, the Court issued a certiorari ((2007) XingJianZi No. 112-1) to review the case, and rendered a decision ((2009) XingTiZi No. 1) on May 25, 2009 in which the Court rejected the contention for trademark dispute as unfounded because “散利痛” would not give Roche any right for raising trademark dispute; and reinstated the “散利痛” registration, explaining that the TRAB decision ((2005) No. 0675), despite its erroneous finding of facts that “散利痛” was Roche’s unregistered trademark, was correct in its conclusion for upholding the “散列通” registration.

The facts of the two cases span an entire period of 12 years – from March 1993, when the “散列通” trademark was registered, to April 2005, when a decision was made on this trademark by the Trademark Review & Adjudication Board. During this period, the Trademark Law was twice amended  (in 1993 and 2001); the Trademark Adjudication Procedure was promulgated in 1995, as in 2002 and again in 2005; and for the special goods of drugs, the local and national standards were made, corrected and/or repealed. These intertwining factors make it extremely difficult to apply the correct rules, and lend a great challenge to the decision-making process. Moreover, what was involved was how to determine the applicability of previous and present versions of the Trademark Law, how to understand the applicable provisions of the Trademark Adjudication Procedure, and how to identify critical dates for the legal attributes of the disputed trademarks. Therefore, to address these issues or questions correctly will be the key to the judgment.

I.     The applicability of the current and previous versions of the Trademark Law.

       In the review process at the Supreme People’s Court, the litigant brought up the issue whether the current or any previous version of the Trademark Law should apply. It argued that a trademark registration under the previous Trademark Law may not be cancelled under the revised version. This argument sounds reasonable at first, but, is untenable, in this author’s opinion upon studying the related rules on law application. The current Trademark Law became effective on December 1, 2001, as revised with the Decision to Revise the Trademark Law of the People’s Republic of China (“Decision”) passed on the 24^th session of the Standing Committee of the 9^th National People's Congress on October 27, 2001. Neither the Decision nor the current Trademark Law explicitly provides whether the pre-amendment or the amended version of the Trademark Law should be applicable if a dispute is raised on the governing law for a trademark which was registered before the amendment of the Trademark Law. Before the latest amendment of the Trademark Law, it was provided in the Trademark Law 1983 and the Trademark Law 1993 that the TRAB decision was ultimately final as to trademark disputes. As a result, the conflict between the old and new versions was not quite obvious in their applications. The 2001 amendment gives the power to the courts to review such trademark disputes. In trying trademark-related civil cases, the courts come into the issue of the application of the old or new versions of the Trademark Law. As a result, the law application conflict becomes surfaced. To correctly address the disputes between the parties, the Interpretation of the Supreme People's Court on the Jurisdiction and Law Application Scope in the Trials of Trademark-Related Cases (“Interpretation”) was issued and became effective on January 21, 2002, which specially sets out rules for law application in trademark-related cases. Article 5 of the Interpretation provides that “except otherwise stipulated, the Trademark Review & Adjudication Board decisions made after the amendment in respect of issues raised before the amendment which are specified  under the amended Articles 4, 5, 8, 9(1) 10(1)b,, c.,d., 10(2), 11, 12, 13, 15, 16, 24, 25 or 31, shall be reviewable in courts under the amended provisions; for all others, the pre-amendment version shall apply In the present case, Southwestern requested the TRAB to cancel the “散利痛” trademark on the ground that the mark was a generic name. Such reason is set out in Article 11, as amended, of the Trademark Law. Therefore, according to the Interpretation, the case should be governed by the amended Trademark Law. In the “散列通”case, Roche based its request to cancel the registered “散列通” mark on Article 27 of the pre-amendment Trademark Law and Rule 25 of the Implementing Regulations, which was specified in its application to the Board as “[Southwestern’s act was] in contraction to the principle of good faith and registered a mark of others which has already been well known to the public, by copying, imitating or translating the same. It infringes upon the lawful prior right of this applicant.” According to this statement of Roche, the specific reason corresponds with the pre-amendment Rule 25(1)b., “to register by copying, imitating or translating a mark of another that is well-known in contradiction to the principle of good faith,” and Rule 25(1)d., “… in violation of the prior rights of another,” which was codified into Articles 13 of the Trademark Law as amended. (Since Bayer [the substitute requester] dropped its Article 13 complaint in the review hearing, the “散列通” case touched only Article 31 issues). Therefore, according to Article 5 of the Interpretation, the case should be examined in accordance with the amended Trademark Law.

II.   Ascertaining critical dates so as to determine the legal attributes of the trademarks is key to the cases

1.    Textual interpretation of Rule 38 of the Trademark Adjudication Procedure and ascertainment of time of occurrence of the facts in the “散利痛” case should be  that when the  Board examined the “散利痛” trademark.

(1)   The critical date for Rule 38 of the Trademark Adjudication Procedure.

As stated, the “散利痛” case is concerned with whether “散利痛” was a generic name, i.e., whether it was distinctive. According to the Trademark Law, the distinctiveness of a mark shall be assessed by the Trademark Office and the Trademark Review & Adjudication Board before the mark is approved for registration; and by the Board after registration.

The factual basis on which a decision can be made for either of these two cases is set out in Rules 35 and 38 of the Trademark Adjudication Procedure of 2002, which specified in Rule 35 that such factual basis includes the status quo when the mark is assessed, in Rule 38 that “the assessment shall be timely made in respect of the facts, reasons and claims raised in the parties’ request or response thereto.” However, the point in time of the facts raised therein was not specified. Here, in the opinion of this author, it is necessary for the proper  understanding and application to interpret this provision based on relevant interpretational procedures. To be specific, this provision must be clarified by analyzing its contextual meaning along with the legislative intent. As stated, both the Trademark Office and the TRAB function to examine the distinctiveness of a mark, whereas the  Board does so by making reviews of office actions, oppositions and disputes. For this sake, this author believes that the factual basis for distinctiveness assessment and determination should be the same, since a mark, registered or unregistered, is examined by the same TRAB. Moreover, since the distinctiveness of a mark varies naturally, it decides that the fact on which a judgment can be made should be the fact when the mark is assessed. For this sake, this author believes that the context of the Trademark Adjudication Procedure shows that the critical date for Rule 38 should be the same as those set out in Rule 35, that is, when the mark is assessed.

(2) The legal attribute of “散利痛” when it was listed in the drug standards.

In the cases of both “散利痛” and “散列通”, the parties fully agree to the fact that “散利痛” was included into the local Drug Standards of Sichuan Province in 1988, and into the local Drug Standards of Shanghai City in 1995, for a period from 1988 to 2001. But, they have different opinions as to how this fact may influence the legal attribute of “散利痛”. Roche contended that it was still a trademark. Southwestern counterargued that “散利痛” had become a generic name for the drugs since it was included into the local standards, according to applicable stipulations of the Ministry of Health and the State Food and Drug Administration. As a result, the registration of “散利痛” contradicted the stipulation of the Trademark Law that a generic name cannot be registered as a trademark, [on the basis of which], Southwestern further argued that its registered trademark of “散列通” should not have been cancelled. Although both the TRAB and the court in the first and second instances held that “散利痛” was not a generic name, they arrived at their conclusions on different bases. The court in the first instance, for example, took the position that "a generic name is one that is generally accepted in the industry, or that is popularly recognized by the public through custom, as a product name; and whether “散利痛片” (SARIDON tablets) is generic use should be determined on the basis of whether this name was widely used [as such] in the pharmaceutical industry, rather than relying on evidence alone out of government standardized listing of drug name." This position, in effect, denies the existence of a statutory generic name. The court of second instance arrived at its conclusion on the basis that “散利痛”, because of the modified national standard and its actual use, works an objective indication of source of goods, and not a generic name. It thus should be registrable. This conclusion, in effect, avoided determination of the nature of “散利痛” mark for the period between 1988 and 2001 when it was listed in the National Drug Standards, and avoidance of such facts of the nature of “散利痛”, materially affecting Southwestern’s interests and failing to take into account of drug administration situation, contributed to an inappropriate determination of the legal attribute of “散利痛”. The Supreme People’s Court made a finding of the legal attributes of “散利痛” in two phases in its decisions of XingTiZi No. 1 (2009) and of XingJianZi No. 111-1 (2007) on the Rejection of Reconsideration: Phase 1 relates to the legal status of “散利痛” when it was listed in the local drug standards; and Phase 2 relates to the status after the national drug standards were modified. Generic names, as stated in the Supreme People's Court judgment (MinSanZhongZi No. 1, (2002)), to be considered “not only in light of its being listed in the national or industrial standards, or in professional guidebooks or dictionaries, but also in light of general denomination of a type of goods through business convention of the industry or wide use,” comprise de jure determination and de facto determination of conventional popular usage. A name is generic de jure when it is so stipulated by law or regulation, and de facto when it is well known within the territorial boundaries of China. Because of the provisions of Drug Administration Law and relevant regulations, a drug name listed in the pharmaceutical standards is its generic name. Therefore, “散利痛” during the period of 1988 to 2001 when it was listed in the pharmaceutical standards, must be a de jure generic name.

(3) The legal status of “散利痛” at the time of TRAB review after the drug standards modification.

As shown, “散利痛” was generic de jure during the period of 1988 through 2001, because it was listed in the national drug standards. Its registration was therefore improper under the Trademark Law. But the unique fact in this case was that the State Food and Drug Administration issued a National Standard Promulgation (GuoYaoBiaoZi No. XG-013 (2001)) on September 20, 2001, stopping the use of local standards name for “复方对乙酰氨基酚片(II)” (Compound Paracetamol Tablets) from October 31, 2001 and adopting “散利痛片” (SARIDON tablets) as a former name for provisional use. From the facts of the above modification, it can be seen that the local standards listing of “散利痛” was the result of mixed actions of the parties and those of the local administrations of drugs in the unique historical context, which result, it would be inequitable, to be suffered or benefited from by any of the parties alone. Moreover, the result of the TRAB fact-finding showed no genericition of “散利痛” in the actual industry use after many years since its listing into the local standards, and the Court in this case found Southwestern and Roche to be the sole users. If, however, this name had been widely used among other pharmaceutical companies than the parties, it could not have been found distinctive even if it was a non-standard generic name, or the drug standards have been modified, or the generic name has been corrected.

To sum up, since “散利痛” was no longer generic de jure after the modification of the related local and national drug standards when this name was reviewed by the TRAB, nor was it generic de facto through popular use, and remained distinctive as indicator as to source of products, its registration should not be canceled.

II.   Registrability of “散列通” hinges upon whether it will hinder the prior right of Roche, i.e., whether Roche had established any fame in its use of the unregistered“散利通” prior to the filing date of “散列通” trademark application.

On this issue, the Board did not see eye to eye with the court of both first and second instances, particularly in regard of whether “散列通” should be cancelled. The Board’s position was that it should not, for the main reason that “散列通” was sufficiently different from “散利痛” in textual composition, connotation and function, which will not be regarded as same by an ordinary consumer. Roche’s claim that “散列通” as a Chinese transliteration of "SARIDON" would be likely to cause confusion among consumers with “散利痛” was unfounded. The court, on the other hand, was of the opinion that “散列通” registration should be cancelled because it affected Roche’s prior right. Therefore, establishment of prior right by Roche with relative fame in the unregistered “散利痛” at the time of filing of the “散列通” application was the key.

(1)   “散利痛” became a generic de jure during the period of 1988 through 2001 under the Drug Administration Law when it was listed in the local standards from 1988 to 2001, that is, “散利痛” was generic de jure at the time when “散列通” application was filed. According to Article 11(1) of the Trademark Law, a generic name it is not registrable for lack of distinctiveness. The filing of an application therefore can hardly be said as stepping on the prior user right [of such an unregistrable mark] even though “散列通” was close to “散利痛” which was a de jure generic name.

(2)   Roche’s labeling of “散利痛” on the drugs was an indication of the product’s a generic name, because under Article 37 of the Drug Administration Law of July 1, 1985, “the packaging for drugs is required to include labels, along with instructions. The label or instructions must indicate the name, specification, manufacturer, approval number, batch number, main ingredients, indications, directions, dosage, contraindications, side effects and warnings of the product.” Similar requirements can be found in Article 54 of the Drug Administration Law 2001. In addition, such administrative regulations as the Provisions on Administration of Labels for Drugs, etc. contain explicit provisions on the position and size of the labels. Therefore, in some sense, the Roche marking of “散利痛” on its products is a mere compliance with the labeling requirement and an execution of its legal obligations.

(3)   Both the Drug Administration Law and the Trademark Law at the time of the dispute prohibit the use of unregistered trademarks on drugs. This makes it statutorily a non-feasibility for “散利痛” to be considered as an unregistered trademark on the drugs. Article 41 of the Drug Administration Law, effective on July 1, 1985, provides that “Except for TCM (traditional Chinese medicine) materials or TCM medicines prepared in ready-to-use forms, a registered trademark must be used for all drugs; if [a trademark] is not approved and registered, any drug [bearing this trademark] shall not be permitted to be sold on the market. The registered trademark must be noted on the package and label for the drug.” Article 5 of both the 1982 Trademark Law and the 1993 Trademark Law provides that “A registered trademark must be applied for, for any goods which the State requires to have a registered trademark; if [a trademark] is not approved and registered, any drug [bearing this trademark] shall not be permitted to be sold on the market.” Similar provisions can also be found in Article 6 of the 2001 Trademark Law. Article 4 of the Implementing Regulations of the 1983 Trademark Law provides that “A registered trademark must be used for any drug.” Article 7 of both the Implementing Regulations of the 1988 Trademark Law and the Implementing Regulations of the 1993 Trademark Law provides that “A registered trademark must be used for any human drugs and tobacco products specified by the State and published by the State Administration for Industry and Commerce.” Article 4 of the Implementing Regulations of the 2002 Trademark Law provides that “The goods for which a registered trademark must be used, as specified in Article 6 of the Trademark Law, shall mean any goods that are required to have a registered trademark under law or regulation.”From the applicable provisions of the Drug Administration Law and the Trademark Law, and their implementing rules, one sees that a registered trademark must be used on human drugs as required by all the versions of the Drug Administration Law and all the versions of the Trademark Law and their implementing rules. Therefore, this author believes that it goes against the legal spirit to determine an unregistered mark forbidden under the Trademark Law and the Drug Administration Law as a prior art under legal protection. Objectively speaking, this damages the order of trademark registration and drug administration of China.

On the basis of the above analysis, the Supreme People’s Court holds that when the”散列通”trademark was applied for registration, “散利痛” could not be determined as an unregistered trademark that Roche had used previously with certain influence. Therefore, the registration of the”散列通”trademark does not infringe upon the prior art of the other and should not be withdrawn.

With the rendering of the administrative judgment (ZhiTiZi No. 1 (2009)), the sensational cases of “散列通” and “散利痛” are settled finally, but disputes never stop on how to determine a generic name. Some say that the Supreme People’s Court, by means of these cases, defines a legal standard that the critical date for determining a generic name should be the date when the dispute is reviewed. However, as one of the judges to handle these cases, this author cannot agree to this viewpoint. It is true that in the case of “散利痛”, the Supreme People’s Court held that whether the disputed trademark was a generic name should be determined on the state of facts when such disputed trademark was reviewed by the Trademark Appeal Board. However, it should be noted that the judgment result of this case is based on a special fact, that is, it occurred in a special historical period of China, when the related laws and regulations were not well developed. The “散利痛” name was included into the drug standards upon a request of one of the parties. But it is never a normal drug standard, and such name is inconsistent with the drug naming rules of China. Under the unique historical context, the party that enjoyed the benefits of its drug name being a standard name should assume the legal consequences for it being included into the drug standards. Therefore, considering the reality or the applicable provisions of the then laws and regulations, it fits with the legal spirit for the Supreme People’s Court to hold “散利痛” as a generic name when it was included as a standard drug name. Certainly, the final judgment of the Supreme People’s Court does not mean that the date of review should always be the date critical to determine a generic name. But, the common standards should be applied, and the application date for the disputed trademark be used as the critical date. A name that has been generally used when it is approved and registered as a trademark should still be determined as a generic name. This is mainly because usually, a mark that becomes a generic name has entered the public domain and can hardly acquire any distinctive features. The situation here, however, is different. The drug name “散利痛” was included into the national standards and in accordance with the Drug Administration Law, became a statutory generic name. Despite of this, it was never widely used as a generic name, and the national standards were revised later. Therefore, this case is only an exception from the special facts of the case under the special historical conditions. It is still improper now to use the critical date in this case as a universal legal standard in generic name determination.