How to avoid the headache of your brand’s ‘genericisation’

By Yao Wei and Huang Li, Chang Tsi & Partners
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One of the major bright lights in China’s new Trademark Law, which entered into effect on 1 May 2014, is that it specifies the system of cancellation on the legal basis of genericisation.

姚伟 Yao Wei 铸成律师事务所 高级律师、商标小组负责人 Senior Associate, Head of the Trademark Practice Group Chang Tsi & Partners
姚伟
Yao Wei
铸成律师事务所
高级律师、商标小组负责人
Senior Associate,
Head of the Trademark Practice Group
Chang Tsi & Partners

The second paragraph of article 49 of the Trademark Law specifies that if a registered trademark becomes the generic name of the good for which it has been approved, any entity or individual may apply to the Trademark Office to have the registered trademark cancelled.

From the new provision, we can discern the following points: (1) in contrast with the law and practice before the implementation of the new Trademark Law, once a registered trademark becomes the generic name of the good for which it has been approved, the registration of that trademark can be cancelled. Now, not only are generic names not able to be registered at the time of trademark registration, but a trademark may be cancelled after it has been successfully registered, if it becomes genericised; (2) anyone may apply to have a genericised trademark cancelled; and (3) the system of cancellation based on genericisation should be limited to the goods or services for which a trademark is approved.

Three circumstances

Based on current Chinese trademark laws, regulations and practice, the three circumstances under which a disputed trademark will commonly be found to have been genericised are as follows:

  1. Where, based on laws, or national or industry standards, it is the generic name of a good, it should be found to be the generic name. This is the recognition of a statutory generic name and is mainly determined based on the relevant national or industry standard, as well as what is recorded in reference books, dictionaries, etc. Provided the relevant basis is given, the determination of a statutory generic name is generally not problematic.
  2. Where the relevant public generally is of the opinion that a certain name can refer to a class of goods, it should be found that such name has become genericised through common usage. For a finding of genericisation through common usage, the most common method is to take the producers in the relevant industry as the determining entities, while taking into account the cognition of the general consumer of the industry.
  3. For a good that is restricted to a specific geographical area, the question of whether a disputed trademark is a generic name is determined based on the common point of view in the relevant market, although current trademark law practice on this point is far from unanimous.
黄力 Huang Li 铸成律师事务所 初级律师 Junior Associate Chang Tsi & Partners
黄力
Huang Li
铸成律师事务所
初级律师
Junior Associate
Chang Tsi & Partners

Costly negligence

A significant number of registered trademark owners have, due to negligence in protecting the right to the exclusive use of their trademarks, seen their trademarks become the generic name of the relevant good as the name’s notoriety increased. A typical case would be the “Jinjunmei” generic name administrative trademark case (see administrative judgment [2013] Gao Xing Zhong Zi No. 1767 of the Beijing Municipal Higher People’s Court). Given that the new Trademark Law has set out the system of cancellation based on genericisation, trademark owners must make the proper preparations to prevent their well known trademarks, on which they have expended a great deal of effort and money to maintain, from weakening and becoming genericised.

Owners of registered well known trademarks may approach the problem of preventing the weakening and genericisation of these trademarks by the following means:

  1. Establishing a sound trademark monitoring system and adopting proactive trademark right protection measures. We know the main reason that many registered trademarks ultimately suffered “genericide” was that the trademark rights holders were negligent in protecting their trademark rights. With the increase in trademark infringement, certain well known trademarks gradually became the generic brand of the relevant industry, and ultimately the genericised name, following which their registration was cancelled. To avoid this fate, a trademark rights holder must erect a sound trademark monitoring system for its well known trademark, and if it discovers an identical or confusingly similar trademark, it should have it eliminated in an administrative procedure or trial procedure.
  2. Keeping a close watch on the relevant market and actively purging infringing brands and products from the market. In present day China, situations where a company’s trade name, etc., is added before a specific well known brand, thereby constituting a so-called new brand that then appears concurrently in the market with the well know brand, have become common. In such a situation, the holder of the well known trademark should use its prior trademark right to crack down on the above-mentioned infringing entity, e.g. by issuing it a lawyer’s letter, applying for investigation and handling by the administration for industry and commerce, applying for customs investigation and seizure, etc., and where necessary instituting a civil infringement procedure, or even a criminal procedure.

Entering a new era

  1. Carrying out media publicity and guarding against erroneous use of the well known trademark by the media. China has entered the era of rapid dissemination of information. Due to reasons such as the limited knowledge level or the low professional standards of individual media workers, the erroneous use of well known trademarks to indicate a certain class of goods in the course of media reports, or use of a term, occasionally occurs. In the face of this the owner of the well known trademark cannot just sit idle. If it fails to act, the repeated reprinting of similar reports will give rise to misunderstanding among consumers, and with time the notoriety of the trademark could be weakened and it could become a generic name.
  2. Preserving evidence of efforts to safeguard trademark rights to combat the risk of genericisation of the trademark due to a flood of infringements. Cases like the “Jinjunmei” case provide an excellent warning for owners of well known trademarks. If preparations are not made in advance to actively combat trademark infringements and evidence of efforts to safeguard trademark rights is not kept, the risk of a trademark owner’s well known brand becoming genericised will increase where there is a flood of trademark infringements. Accordingly, preserving evidence of efforts to safeguard trademark rights is absolutely necessary.

Yao Wei is a senior associate at Chang Tsi & Partners and head of the trademark practice group; Huang Li is a junior associate at the firm

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