China

CHRISTIAN DIOR PERFUMES LLC V. TRADEMARK REVIEW AND ADJUDICATION BOARD (2018) ZGFXZ No. 26, SPC

Cause of action: Administrative dispute reviewing rejection of a trademark application

Collegial panel members: Tao Kaiyuan | Wang Chuang | Tong Shu

Keywords: administrative lawsuit, extension of territorial protection, international registration, trademark

Relevant legal provisions: Implementing Regulations of the Trademark Law of the People’s Republic of China, articles 13 and 52

Basic facts: The trademark at issue is International Registration No. 1221382 (as illustrated), for which the applicant is Christian Dior Perfumes LLC ( hereinafter “Dior”). The country of origin for the trademark at issue is France, with an approved registration date of April 16, 2014, and an international registration date of August 8, 2014. The international registration owner is Dior, and the designated products include eau de parfum and perfumes.

Trademark at issue

After the trademark at issue was registered internationally, according to relevant provisions under the Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, Dior applied to the International Bureau of the World Intellectual Property Organization (WIPO) (hereinafter the “International Bureau”) for an extension of territorial protection to Australia, Denmark, Finland, the United Kingdom and China, among others. On July 13, 2015, the Trademark Office of the State Administration for Industry and Commerce (hereinafter the “CTMO”) issued notice to the International Bureau that it rejected the application for the extension of territorial protection over all of the designated products in China on the ground that the trademark at issue was lacking distinctive features. Within the statutory time limit, Dior appealed to the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce (hereinafter the “TRAB”). The TRAB affirmed that the trademark at issue was not capable of distinguishing the source of goods and was lacking distinctive features; hence the TRAB issued Decision No. 13584, rejecting Dior’s application for extension of territorial protection of the trademark at issue in China. Dior was dissatisfied with the decision and filed an administrative lawsuit, in which it argued that:

(a) the trademark at issue is a three dimensional (3D) mark in a specific color and while Dior had submitted to the TRAB the 3D drawing of the trademark at issue, the TRAB had based its decision incorrectly in fact on an understanding of the trademark at issue as an ordinary graphic trademark; and (b) the trademark at issue has a unique design that has become so significant, in light of Dior’s long term efforts to promote and market it, that the application for extension of territorial protection should be approved.

Held: Both the Beijing Intellectual Property Court and the Beijing Higher People’s Court rejected Dior’s claim, finding that Dior did not inform the CTMO that the trademark at issue was a 3D mark nor did it submit technical drawings of the trademark including at least three views within three months of the date of its international registration at the International Bureau. Only in its first communication of supplementary reasons, when it requested a review of the TRAB’s decision, did Dior inform the CTMO that the trademark at issue was a 3D mark and provide the three views. Under the circumstances, in which Dior did not originally state that the trademark at issue was a 3D mark or submit the relevant documents, the courts at first and second instance found that the CTMO did not err in treating the trademark at issue as an ordinary graphic trademark. Whether the CTMO committed errors when recording in the register the designated color, marks and other information relating the scope of the present case, and the courts advised Dior to seek relief in that regard through other channels. Dior rejected the second-instance judgment and lodged an application to appeal with the Supreme People’s Court. The Supreme People’s Court issued its first administrative ruling on December 29, 2017, granting Dior permission to appeal ((2017) ZGFXS No. 7969), and it issued its judgment on April 26, 2018, overruling the first instance and second-instance decisions, and ordering the TRAB to review the case and issue a new decision ((2018) ZGFXZ No. 26).

Reasoning: The Court held that the designated type of the trademark at issue was indeed “a three-dimensional mark”, with specific description of the 3D form clearly indicated in its international registration documents. In the absence of evidence to the contrary, the record in the international registration information of the specific type of the trademark at issue should be deemed to be the applicant’s statement that it is a 3D mark. It can also be reasonably presumed that, when the application was filed for an extension of territorial protection of the trademark at issue in China, the application information that the International Bureau transmitted to the CTMO was the same as the international registration information, so that the CTMO should have known the specific type of the trademark at issue. Since an applicant for international registration of a trademark is not required to file a separate application for registration before any designated country, any information relating to that trademark that the International Bureau transmits to the CTMO shall constitute the factual basis on which the CTMO examines the application and decides whether or not to grant extension of territorial protection of the trademark at issue in China. According to the evidence presented, the type of the trademark at issue for which the territorial protection was sought in China was “a three dimensional mark”, not the “conventional trademark” that the CTMO recorded in its register, which record served as the basis for the CTMO’s examination and the TRAB’s review. During the specific type of the trademark at issue was a 3D mark and requested correction of the registration documents by additionally submitting technical drawings with three views. However, the TRAB did not accurately record these facts in its Decision No. 13584 nor did it, following Dior’s request, verify whether the factual basis on which the CTMO decided to reject the application was erroneous. Instead, the TRAB continued to consider the trademark at issue as “a graphic trademark” and simply rejected Dior’s request that the TRAB review its decision, which rejection violated legal procedure and had the potential to impair Dior’s legitimate interests, and hence the Court found that it should be remedied. The Supreme People’s Court provided that the CTMO and the TRAB were to review again whether the trademark at issue was lacking distinctive features – this time, as a 3D (that is, not graphic) mark. The Madrid Agreement Concerning the International Registration of Marks and its Protocol were designed to establish an international cooperation mechanism that improves procedures for the international registration of trademarks, streamlines and simplifies those procedures, and provides applicants with a convenient way of obtaining trademark protection in any country at the lowest possible cost. The facts of this case show that the trademark at issue was based on an application for international registration under Madrid, with China being designated, so that the relevant application information was to be based on that which the International Bureau transmitted to the CTMO. It can be reasonably presumed from the evidence presented that Dior made a statement in the international registration application that the trademark at issue was a 3D mark, clarified the specific use of the trademark at issue and submitted a single perspective technical drawing of the trademark at issue. Where an application document lacks only formalities within the meaning of the Implementing Regulations of the Trademark Law, such as providing incomplete views of a 3D mark, the competent trademark authority should adhere to the principle of performing its obligations under international agreements, while giving the applicant a reasonable chance to submit supplements and to make corrections to the application documents. In this case, the CTMO did not keep accurate records in the international registration documents of Dior’s statement as to trademark type nor did it give Dior a reasonable chance to submit supplements and to make corrections to those documents. In the absence of a factual basis for doing so and in ignoring Dior’s requests, the CTMO unilaterally changed the trademark at issue to an ordinary graphic trademark and reached its decision on this basis to Dior’s disadvantage. The TRAB’s failure to remedy the situation also has no basis in fact or law and had the potent ial to impair Dior’s legitimate expectations; hence the Supreme People’s Court ordered that it be rectified. To conclude, the TRAB should, based on the reasons proposed by Dior in respect of the trademark type, rectify the CTMO’s improper affirmation and review the application for extension of territorial protection of the trademark at issue in China, and it should do so according to the criteria for assessing whether the 3D trademark has distinctive features. In their reviews, the CTMO and the TRAB shall focus on: (a) the distinctiveness of the trademark at issue and the distinctiveness derived from use of the trademark at issue – particularly the date on which the trademark at issue entered into the Chinese market, evidence of its actual use, promotion and marketing, and the extent to which the trademark at issue serves to identify the source and function of the product; and (b) the principle of unified examination criteria – that is, the principle that while trademark review and judicial review procedures will necessarily involve consideration of the particular circumstances of the individual case, the basic standards for review shall adhere to the provisions under the Trademark Law of the People’s Republic of China and the relevant administrative regulations, and these standards shall override any individual circumstances.