Case explanation: Trademark renewal registration must overcome four "thresholds"

　　On January 18, 2017, Beijing Times Pioneer Business Co., Ltd. (hereinafter referred to as the plaintiff) filed an application for registration of the "cohiba" trademark (hereinafter referred to as the disputed trademark) No. 22669371, designated for use on goods in Class 34, such as butane gas (for smoking), flint, and gas canisters for lighters. After review, the Trademark Office rejected the registration application of the disputed trademark on the grounds that the disputed trademark is a similar trademark to trademark No. 520005 "COHIBA" (hereinafter referred to as the cited trademark) used on the same or similar goods. The plaintiff then applied to the original Trademark Review and Adjudication Committee (hereinafter referred to as the original TRAC) for review, but its review request was rejected by the original TRAC.

　　On August 21, 2018, the plaintiff filed an administrative lawsuit with the Beijing Intellectual Property Court against the original TRAC, and submitted the registration certificates of its held trademarks No. 14796304 and No. 16975617 "Gao Xiba" (hereinafter referred to as the basic registered trademarks), claiming that the disputed trademark is a continuation registration of its basic trademark, which can be distinguished from the cited trademark and should be approved for registration. After trial, the Beijing Intellectual Property Court held that the disputed trademark constitutes a similar trademark to the cited trademark used on the same or similar goods; the plaintiff's evidence is insufficient to prove that its basic trademark "Gao Xiba" has high reputation through use, so that its business reputation can extend to the disputed trademark, and will not cause relevant public confusion or misidentification of the source of goods designated for use by the disputed trademark and the goods approved for use by the cited trademark. Therefore, the court did not support the plaintiff's relevant claims.

　　In fact, in trademark authorization and confirmation administrative cases, many trademark right holders will request the court to consider the continuation of reputation between prior and subsequent trademarks on the grounds that their basic registered trademarks have high reputation. However, in practice, this claim is rarely recognized by the court. This article attempts to analyze the "threshold" of trademark continuation registration.

　　 The continuation and inheritance of goodwill is the essence

　　Trademark continuation registration, also known as goodwill continuation registration, is not a mature legal concept, but it frequently appears in China's judicial practice. In 2014, the "Guiding Opinions on the Trial of Trademark Authorization and Confirmation Administrative Cases by the Beijing Higher People's Court" was published, which standardized the applicable rules for trademark continuation registration. According to Article 8 of the Guiding Opinions, trademark continuation registration refers to "the basic registered trademark of the trademark registrant has obtained a certain degree of reputation through use, which leads the relevant public to associate its subsequent application for registration of the same or similar trademark on the same or similar goods with its basic registered trademark, and believe that the goods using the two trademarks are both from the trademark registrant or have a specific connection with it, and the business reputation of the basic registered trademark can be continued on the subsequently applied registered trademark".

　　Trademark continuation registration is not contradictory to the principle of independence of trademark exclusive rights. The essence of trademark continuation registration is the continuation and inheritance of goodwill between different trademarks. China is a trademark registration system country, and trademark exclusive rights are generated based on registration. The trademark registrant enjoys independent trademark exclusive rights for its different registered trademarks. Therefore, trademark exclusive rights cannot be naturally continued or inherited by other trademarks. However, goodwill is different from trademark exclusive rights, and the goodwill carried by different trademarks is not independent. The generation of goodwill does not require examination and approval by state-specific organs, and it is naturally formed in the economic activities of business entities. It is a comprehensive evaluation by the relevant public of its production, products, sales, services, etc. As an important basis for identifying the source of goods or services, trademarks can link this comprehensive evaluation with the provider of goods or services, and are the main tool for indicating goodwill. For two trademarks applied for by the same entity, if the basic registered trademark has already carried a large amount of goodwill, and consumers can associate the subsequent trademark with the basic registered trademark, then the goodwill carried by the basic registered trademark may be completely transferred to the subsequent trademark, enabling it to achieve high reputation in a short time, and objectively forming a distinction from other commercial marks.

　　 Trademark continuation registration requires conditions

　　Trademark rights have two basic functions: exclusive rights and exclusion rights. Trademark exclusive rights are limited to the approved registered trademark and the designated goods, while exclusion rights can be extended to the same or similar trademarks on the same or similar goods. Recognizing trademark continuation registration is equivalent to opening a "gap" in the boundary of the exclusive rights of the basic registered trademark, which may enter the scope of the exclusion rights of other trademarks, improperly seizing the market share of others, and affecting the normal market competition order. In practice, some trademark malicious registration cases will indeed claim continuation registration to request the registration of their subsequently applied trademarks. Once the legitimacy of trademark continuation registration is universally recognized, it may lead to unfair competition. The author believes that trademark continuation registration should not be allowed in principle, unless the party claiming continuation registration can prove that it has met the following four conditions:

　　First, the basic registered trademark has high reputation through use. Recognizing trademark continuation registration is actually a protection of the commercial value created by the trademark owner due to the use of the trademark. Only through the use of trademarks can market entities establish a corresponding relationship with the goods or services they provide, and continuously accumulate goodwill on the trademark. When goodwill accumulates to a certain extent, the basic trademark obtains high reputation and has a strong representative function, and the goodwill carried by the basic trademark has the possibility of transmission.

　　Second, the reputation of the basic registered trademark is higher than that of the cited trademark. On the one hand, if the reputation of the basic trademark is not higher than that of the cited trademark, that is, the relevant public's understanding of the basic trademark is not stronger than its understanding of the cited trademark, then the relevant public may think that the goods or services using the basic trademark come from the owner of the cited trademark, and the disputed trademark cannot be distinguished from the cited trademark based on the reputation of the basic trademark. On the other hand, the reputation of the basic trademark is higher than that of the cited trademark, which can prove that the registration of the disputed trademark is based on legitimate business needs and use purposes, and there is no subjective malice to attach to the cited trademark.

　　Third, the basic registered trademark and the disputed trademark are the same or similar trademarks on the same or similar goods or services. The trademark legal system actually divides the market scope by symbols. It is necessary to avoid a certain mark seizing the market share it has not made actual efforts for by virtue of its high reputation. The reason why the disputed trademark can be registered is that it continues the goodwill carried by the basic trademark. This goodwill should be limited to the market scope where the basic trademark has made efforts, and cannot be arbitrarily expanded to new market areas.

　　Fourth, the relevant public can associate the basic registered trademark with the disputed trademark. Only when the relevant public believes that the source of goods or services indicated by the basic registered trademark and the disputed trademark is the same or has a specific connection can a bridge be built between the two, so that the goodwill carried by the basic trademark can naturally flow to the disputed trademark, and will not be confused or misidentified with the cited trademark.

　　"The principle of prior application for trademark registration, the impact of goodwill continuation on the registrability of trademarks can only be an exception." The author believes that a cautious attitude must be adopted towards the issue of trademark continuation registration. For the claim of trademark continuation registration raised by the parties, the court should, based on the specific circumstances of the case, comprehensively consider the above conditions, treat it cautiously, and strictly control it.

　　Author's Affiliation: Beijing Intellectual Property Court