Determining ‘distinctiveness’ in the OneTouch trademark cancellation case

Recently, media have reported the news of the ruling by the Trademark Review and Adjudication Board (TRAB) cancelling the trademark OneTouch, registered for many years by Johnson & Johnson for blood sugar test strips on the grounds that the sign means “touch the switch, easy to operate (one touch and that’s it)”, constituting the circumstance of consisting exclusively of a direct designation of a characteristic of the goods as specified in item (2) of the first paragraph of article 11 of the Trademark Law.

Subsequently, news unfavourable to Johnson & Johnson, i.e. that its goods face the prospect of being removed from the shelves, caused a temporary clamour. In fact, the ruling is not immediately effective, as Johnson & Johnson has the right to institute an administrative action in a court in respect of the ruling, and it has expressly indicated that it will do so, meaning that the fate of the trademark OneTouch will be finally determined in a judgment of the court. The lead author is of the opinion that the legal issue at the crux of this case is the issue of the distinctiveness of the trademark, and the outlook for the case is not necessarily as dire for Johnson & Johnson as has been portrayed in the media.

Legal provisions

Article 9 of the Trademark Law specifies that “trademarks for which registration is applied shall have distinctive characteristics and be easy to distinguish”; and article 11 specifies that the following marks may not be registered as trademarks: (1) those which consist exclusively of the generic name, depiction or model number of the goods; (2) those which consist exclusively of a direct designation of the quality, main raw materials, functions, intended purpose, weight, quantity or other characteristic of the goods; and (3) those which are lacking in distinctiveness. A sign that consists exclusively of direct designation of a characteristic of the goods may be registered as a trademark if it acquires distinctiveness through use.

Analysing the foregoing provisions, it can be seen that the substance of “distinctiveness” is the function that a trademark has in distinguishing the source of the goods, and if the sign, sound, colour, three-dimensional sign, etc., cannot fulfil the function of distinguishing the source of the goods, it lacks distinctiveness and cannot be accorded the protection due a registered trademark.

It is generally held that there are two types of trademark distinctiveness – inherent distinctiveness and acquired distinctiveness, where inherent distinctiveness means that the sign, etc., itself can fulfil the function of distinguishing the source of the goods. On the other hand, acquired distinctiveness means that a descriptive trademark originally lacking in distinctiveness acquires through use a new meaning in addition to the original descriptive meaning that distinguishes the source of the goods or services. In practice, Little Sheep Hot Pot, registered for restaurants, and 酸酸乳 (Chinese characters for sour yoghurt), registered for dairy products, both acquired their distinctiveness through use.

Relevant public

Which criteria are to be used to determine distinctiveness is in reality of great significance. Different entities have different professional backgrounds, cognitive capacity, etc., which will produce a relatively large divergence in the recognition of distinctiveness. Article 6 of the Opinions on Several Issues Concerning the Trial of Administrative Cases Involving the Granting and Confirmation of Trademark Rights, issued by the Supreme People’s Court, expressly specifies that when trying a trademark case, a court is required to review and determine whether a foreign-language trademark has distinctive characteristics based on the common knowledge of the relevant public in China. Pursuant to relevant judicial interpretations, the term “relevant public” means the consumers that have a connection with the goods or service bearing the trademark, as well as other business operators that have an immediate connection with the marketing of the goods or service in question.

In analysing the foregoing provisions, it can be seen that the sole criterion for determining the distinctiveness of OneTouch is the degree of recognition among consumers and other business operators that have a connection with blood sugar test strips of the combination of English letters in question. If, in the eyes of such consumers and other business operators, OneTouch consists exclusively of a direct designation of the characteristics of blood sugar test strips, then it lacks distinctiveness and ought to be cancelled.

If the outcome shows that people directly associate OneTouch with the source of the goods, namely Johnson & Johnson, then it is distinctive and its registration ought to be upheld. As stated in the legal provisions, even if OneTouch is merely a direct description of the characteristics of blood sugar test strips, it too can acquire distinctiveness if, through its use by Johnson & Johnson, the relevant public associates the sign with Johnson & Johnson.

According to media reports, Johnson & Johnson has been using OneTouch for more than 10 years, and its sales of the product rank in the top of the industry. Johnson & Johnson raised with the TRAB the notion that its trademark has become distinctive through use, however in its ruling, the TRAB held that Johnson & Johnson failed to present sufficient evidence to prove that particular claim. From this it can be seen that the TRAB’s grounds for denying that OneTouch has become distinctive through use was insufficient evidence which, in fact, leaves Johnson & Johnson a certain opening in the administrative action.

Factors considered

In the past, when determining distinctiveness generated through use, the following factors were generally considered: (1) the length of use of the mark on the designated goods, and advertising and publicity using the mark; (2) sales performance; (3) awards and honours received; and (4) consumer survey reports, etc. Accordingly, if Johnson & Johnson can provide sufficient additional evidence showing actual use of OneTouch, familiarity of the relevant public with OneTouch, etc., there remains a possibility of reversing the unfavourable ruling.

In short, the lead author is of the opinion that given the determination of distinctiveness is one of the most widely debated issues related to the Trademark Law, it is still too early to come to a conclusion as to whether OneTouch will ultimately be cancelled. The ultimate outcome of the case will depend on the arguments surrounding distinctiveness of the parties involved in the action, the evidence presented and the court’s determination on the issue of distinctiveness.