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.