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LI LONGFENG V. TRADEMARK REVIEW AND ADJUDICATION BOARD AND SANYA HAITANGWAN MANAGEMENT COMMITTEE (2013) ZXZ Nos. 41, SPC

Cause of action: Administrative dispute over a trademark

Collegial panel members: Xia Junli | Yin Shaoping | Dong Xiaomin

 Keywords: other improper means, trademark registration

Relevant legal provisions: Trademark Law of the People’s Republic of China (as amended in 2001), articles 4 and 41

Basic facts: In the retrial of an administrative trademark dispute between Li Longfeng and the Trademark Review and Adjudication Board of the State Administration for Industry & Commerce (hereinafter the “TRAB”), in which Sanya Haitangwan Management Committee (hereinafter “Haitangwan Management Committee”) was the third party, the facts were as follows. On June 8, 2005, Li Longfeng had registered Trademark Nos. 4706493 “Haitangwan” and 4706970 “Haitangwan” (the disputed trademarks). Trademark No. 4706493 was for services under Class 36 of the International Classification of Goods and Services for the Purposes of the Registration of Marks, including rental of real estate and management of real estate and residence (apartments); Trademark No. 4706970 “Haitangwan” was for Class 43 services, spanning accommodation bureau services (hotels, boarding houses), tourist home services, hotel services and restaurant services. Under the provisions of articles 31, 41(1) and 10 of the Trademark Law of the People’s Republic of China (as amended in 2001), Haitangwan Management Committee requested that the TRAB cancel its registration of the disputed trademarks. The TRAB, in its Decision on Trademark Dispute over Trademark No. 4706493 “Haitangwan” (2011) SPZ No. 13255 (hereinafter “Decision No. 13255”) and Decision on Trademark Dispute over Trademark No. 4706970 “Haitangwan” (2011) SPZ No. 12545 (hereinafter “Decision No. 12545”), ruled to cancel the two “Haitangwan” trademarks. Li Longfeng found the decisions unsatisfactory and brought administrative lawsuits against both.

At first instance, the Beijing No. 1 Intermediate People’s Court overruled the TRAB and overturned Decision Nos. 13255 and 12545. Dissatisfied, the TRAB and Haitangwan Management Committee appealed.

 At second instance, the Beijing Higher People’s Court overruled the first instance judgment and affirmed Decision Nos. 13255 and 12545. Dissatisfied, Li Longfeng applied for permission to appeal to the Supreme People’s Court.

Held: On August 12, 2013, the Supreme People’s Court denied Li Longfeng permission to appeal.

Reasoning: The Supreme People’s Court held that, under article 41(1) of the Trademark Law, if the registration of a trademark is “obtained by fraudulent or other illegitimate means”, other entities or individuals may request that the TRAB cancel that registration. To determine whether registration of the disputed trademark has been obtained by such means, the courts need to consider whether the registration has been acquired not by fraud, but by using any means that disrupt the authorized procedure for trademark registration, impair public interests, improperly occupy public resources or otherwise are in pursuit of unjust profits. Article 4 of the Trademark Law provides that any natural person, legal person or other organization that needs to obtain the exclusive right to use a trademark for the goods or services that they produce, manufacture, process, select or market shall apply to register the trademark with the Trademark Office. It may be inferred from this article that, to validly apply for a registered trademark, the civil subject should have a genuine intention to use the trademark to meet their own needs and that the means the subject uses to achieve trademark registration shall be reasonable or legitimate.

According to the facts established by the TRAB and at first instance, relevant governmental authorities in Hainan Province had already been using and promoting the name “Haitangwan” before Li Longfeng applied to register the disputed trademarks, and it had become the publicly known name of a resort area in Sanya City, as well as the name of a major comprehensive development project, demonstrating distinct meaning and designation. When interviewed in the press, Li Longfeng had admitted that he applied to register the trademarks only because media coverage had led him to believe that the mark would become very famous and thus profitable when renowned entrepreneurs from Hong Kong participated in the Haitangwan development project. As an individual, Li Longfeng had obtained registration of the trademarks at issue not only for Class 36 services, including rental of real estate, management of real estate and residence (apartment), and for Class 43 services, spanning accommodation bureau services (hotels, boarding houses), tourist home services, hotel services and restaurant services, but also for use in relation to other classes of goods and services. Li Longfeng had obtained registration of more than 30 additional trademarks, such as “Xiangshuiwan” and “Yelinwan” for various classes of goods and services, some of which marks were related to well-known names of places and scenic spots in Hainan Island. In so doing, Li Longfeng intended to exploit the huge influence of the governmental authorities’ efforts to promote and market Haitangwan as a resort area and of investment in the Haitangwan development project, and hence he squatted several trademarks related to “Haitangwan” and obtained registration of a large number of other trademarks without justifiable reason.

The Supreme People’s Court found that Li Longfeng’s conduct demonstrated that he had no intention to use the mark himself and had no legitimate justification for registering such a trademark, and that his application for permission to appeal constituted improper occupation of public resources and disruption of the authorized procedure for trademark registration.