Intellectual property – Trademark infringement – Similar trademarks used on similar commodities – Prior rights – Appeal to against registration of the disputed trademark – Evidence to prove market reputation – Whether the cited trademarks enjoyed certain market reputation prior the date of application of the disputed trademark – Trademark Law, Art 28, Art 31, Art 41 sec 2 and Art 43 .
 
In April 1999, an optical products factory in Shenzhen city applied for registration of the “GAP” trademark (the “disputed trademark”) for use on glasses under Category 9. The disputed trademark was subsequently transferred to the third party of the case, Xinhenli Co. Upon preliminary examination and announcement of the disputed trademark, THE GAP, INC. submitted an objection to the Trademark Bureau of the State Administration for Industry and Commerce.
 
The Trademark Bureau deemed that the commodities for which the disputed trademark were used were different from the commodities and services for which the plaintiff’s “GAP” series registered trademark (the “cited trademark”) were used in terms of function, application, service method and targets, thus the disputed trademark did not constitute similar trademark on similar commodities and services. The word “GAP” was an existing word with meaning and was not created by the plaintiff, hence the assertion that the disputed trademark imitated the cited trademark lacked evidence, and the registration and use of the disputed trademark would not confuse or mislead consumers in the market. As such, the Trademark Bureau ruled that registration of the disputed trademark shall be approved.
 
THE GAP, INC disagreed with the above decision and applied to the Trademark Review and Adjudication Board (the “TRAB”) for review.
 
The TRAB ruled was of the view that:
 
(1) The cited trademark was used on commodities and services such as cosmetics, backpacks, apparels, fashion advisory services on Category No 3, 18, 25 and 42. The commodities and services using the two trademarks were relatively distant in terms of production process and equipment, raw materials used and sales channels. The use of similar trademarks would not easily confuse or mislead consumers. The evidence submitted by THE GAP, INC was inadequate to prove that apparels and eyeglasses were similar commodities. Therefore, the registration of the disputed trademark did not violate the provisions of Art 28 of the Trademark Law.
 
(2) Based on the evidence submitted by THE GAP, INC, prior to the date of application for registration of the disputed trademark, there was little reporting and publicity on THE GAP, INC and its trademark on newspapers published in Mainland China. There was inadequate evidence to prove that the disputed trademark was well-known by the relevant public and that it became a famous trademark referred to in Art 13 of the Trademark Law. Therefore, THE GAP, INC’s assertion that registration of the disputed trademark should not be approved pursuant to the provisions of Art 13 of the Trademark Law lacked evidence.
 
(3) Although “GAP” was the enterprise name of THE GAP, INC, and had been used before the date of application for registration of the disputed trademark, but the commodities such as eyeglasses which used the disputed trademark were in an industry which was different from commodities such as apparels operated by THE GAP, INC. Moreover, the word “GAP” was an existing word, the evidence submitted by THE GAP, INC was inadequate to prove that the brand name “GAP” was well-known by the relevant public prior to the application for registration of the disputed trademark. Therefore, registration and use of the disputed trademark would not cause the relevant public to confuse it with THE GAP, INC, and therefore would not cause harm to THE GAP, INC’s enterprise name rights, and did not violate the provisions of Art 31 of the Trademark Law.
 
Therefore, the TRAB ruled that registration of the disputed trademark shall be approved.
 
THE GAP, INC disagreed with the TRAB ruling and filed a lawsuit with the Beijing No 1 Intermediate People’s Court which later ruled that the TRAB ruling shall be upheld. In second instance, the Beijing High People’s Court endorsed the judgment of first instance.
 
Following issuance of the judgment of second instance, THE GAP, INC transferred all the cited trademarks to GAP (ITM) INC. GAP (ITM) INC. applied to the Supreme People’s Court for re-trial in its own name.
 
Held: the judgment of first and second instance revoked and the TRAB ordered to review the case
 
The Supreme People’s Court held that the disputed trademark and the cited trademark were basically identical. The key issue in determining whether registration of the disputed trademark should be approved lied in whether the commodities such as sunglasses and eyeglass frame which use the disputed trademark shall be deemed similar to commodities such as apparels which used the cited trademark, and whether the co-existence of the two trademarks would cause confusion easily.
 
Based on facts, although the evidence submitted by GAP (ITM) INC. was inadequate to prove that its “GAP” series trademarks were well-known in China prior to the date of application for registration of the disputed trademark, but was able to prove that the trademarks enjoyed a certain reputation. In addition, on evidence that Xinhenli Co claimed itself to be from the United States and flaunted that its apparels had the same characteristics as “GAP” apparels and used trademarks with evidently extended and dark colour background similar to “GAP” trademark of GAP (ITM) INC., Xinhenli Co was well aware of the reputation of the cited trademark and intentionally sought association to the “GAP” brand.
 
Although the commodities such as sunglasses and eyeglass frame which used the disputed trademark were classified in a different class in the “Table of Comparison of Similar Commodities and Services” from the commodities such as apparels which use the cited trademark, there was a high level of association in terms of function and use, sales channels and consumer groups of the commodities. Particularly, it was common for a fashion brand company to operate the same brand of apparels and accessories such as eyeglasses. Taking into account that the cited trademark enjoyed a certain reputation, the applicant of the disputed trademark had free riding intent. The disputed trademark and the cited trademark were basically identical and were used on eyeglasses and apparels respectively, and would easily cause the relevant public to believe that the commodities were provided by the same entity or that the providers were associated. Therefore, the disputed trademark and the cited trademarkconstituted similar trademarks used on similar commodities, and registration of the disputed trademark shall not be approved.