Case Introduction

1. Trademark Opposition Stage

Guangzhou Dongfang Glasses Chain Enterprise Co.,Ltd.(hereinafter referred to as Guangzhou Dongfang Company) applied for the registration of trademark No. 4213953 "东方"(The pronunciation is Dongfang). During the opposition stage, Shanghai Dongfang glasses Co.,Ltd. (hereinafter referred to as Shanghai Dongfang company) filed an opposition on the ground that the application for the subject trademark infringed its prior enterprise name right. The Trademark Office determined that the opposed trademark constituted an infringement on the company's enterprise name right of Shanghai Dongfang Company, so the opposed trademark was not approved for registration.

2. Trademark Opposition Review Stage(Trademark Law 2001)

Guangzhou Dongfang company refused to accept the ruling and filed an request for opposition review to the Trademark Review and Adjudication Board. After hearing, the Trademark Review and Adjudication Board held that the evidences submitted by Shanghai Dongfang company could prove that it had a certain popularity in Shanghai. However, in view of certain regional constraints on its services, and the low originality of "Dongfang" as a enterprise name, as well as the fact that Guangzhou Dongfang company has formed a high reputation in Guangzhou and its surrounding areas, it was considered that the registration of the opposed trademark would not infringe the enterprise name right of Shanghai Dongfang company.

3. First Instance Stage

Shanghai Dongfang Company refused to accept the trademark opposition review ruling and filed a lawsuit with the Beijing No. 1 Intermediate People's Court. Upon trial, the court of first instance found that Shanghai Dongfang Company's enterprise name "Dongfang" was well-known among the relevant Chinese public and belonged to a time-honored Chinese brand. As a competitor in the same industry, Guangzhou Dongfang Company should have a good understanding of the reputation of the enterprise name "Dongfang". The application for registration of the opposed trademark can easily lead to confusion and misunderstanding of the source of the service by the relevant public, which damaged the prior enterprise name right of Shanghai Dongfang Company.

4. Second Instance Stage

Guangzhou Dongfang company filed an appeal to Beijing Higher People's court against the first-instance judgment. Beijing Higher People's court held that the evidence provided by Shanghai Dongfang company was insufficient to prove that the popularity of its enterprise name "Dongfang" had extended to Guangdong Province of China before the application for registration of the opposed trademark, even though its influence had extended to Guangdong. While considering that "Dongfang" was not a fabricated word, it is difficult to discern malice when used by others. On the whole, the two companies have formed their own fixed consumer groups and formed a stable market order, and there will be no confusion about the source of services. Therefore, it is determined that the opposed trademark has not damaged the prior enterprise name right of Shanghai Dongfang Company.

5. Retrial

Shanghai Dongfang Company refused to accept the second-instance judgment and applied to the Supreme People's Court for a retrial. After the Supreme People's arraignment and trial, the Supreme People's Court held that the evidence provided by Shanghai Dongfang Company was sufficient to prove that its enterprise name "Dongfang" had a certain influence nationwide. Moreover, the opposed trademark "Dongfang" has the same text and the same business scope as Shanghai Dongfang Company. It was finally determined that the application for registration of the opposed trademark caused damage to Shanghai Dongfang Company's prior enterprise name (brand name) right and should not be approved for registration.

Referee Points

The Supreme People's Court holds that the foci of the dispute are: (1) Whether the goodwill of the enterprise name is restricted by administrative divisions; (2) Whether Guangzhou Dongfang Company's application for registration of the trademark "Dongfang" has damaged Shanghai Dongfang Company's prior enterprise name right. Regarding the first focus, the Supreme People’s Court believes that although the registration of enterprise names in China is geographically differentiated, the goodwill carried by the enterprise names or brand names and their reputation influence should not be directly restricted by the administrative divisions, they should be comprehensive analysis and judgment based on the company's business history, product sales scope, and the extent of corporate publicity. In this case, the evidence provided by Shanghai Dongfang Company is sufficient to prove that the enterprise name "Dongfang" of Shanghai Dongfang Company has formed a certain influence nationwide. The court of second instance determined that the influence of the enterprise name "Dongfang" of Shanghai Dongfang Company was limited to the surrounding areas of Shanghai, which is obviously improper. Regarding the second focus, the criterion for judging whether an application for registration of a trademark harms the rights of a prior enterprise name is whether the trademark is likely to cause confusion among the relevant public about the source of goods/services, which may damage the interests of the holder of the prior enterprise name. In the case, the trademark "Dongfang" has the same text and the same business scope as the Shanghai Dongfang Company's enterprise name. The application for registration of the trademark "Dongfang" is sufficient to cause consumers to confuse the source of goods/services. Under the circumstances that Shanghai Dongfang Company enjoys the right of prior enterprise name, it should be concluded that the application for registration of "Dongfang" trademark has caused damage to Shanghai Dongfang Company's prior enterprise name right, and registration should not be approved.

Case Analyses

After the case went through the trademark opposition, trademark opposition review, first instance, second instance, and retrial proceedings, the case was finally settled and the opposed trademark was not approved for registration.
During the whole process of the case, Shanghai Dongfang company responded positively and provided a large number of relevant evidences, including the evidence materials of the company's reform process and being rated as "China time honored brand", a number of newspapers’ reports on Shanghai Dongfang Company and its brand name "Dongfang", such as Xinmin Evening News; Shanghai Morning Post; Liberation Daily; China Business Herald; Shanghai Trademark; Finance and Trade Research; China Time-honored Brand; Annals of Luwan district; Modern Optical Magazine; Chinese Watches, Glasses and Jewelry. In addition, a large number of contracts for the establishment of franchise stores of Shanghai Dongfang Company and certificates of honors were submitted. The above evidences were formed earlier, which can form a complete chain of evidences. It proved that the history of Shanghai Dongfang company using "Dongfang" enterprise name can be traced back to 1928, and was recognized as "China Time-honored Brand" by the Ministry of domestic trade at the time in 1993. At the same time, it also proved the popularity and influence of "Dongfang" enterprise name in the same industry nationwide. Finally, the Supreme People's court held that Guangzhou Dongfang company's application for the registration of the trademark "Dongfang" damaged the prior enterprise name right of others, and refused to approve the registration of the trademark "Dongfang".

As an intangible asset of an enterprise, the right of enterprise name is an important civil right that should be protected according to law. Applying for trademark registration shall not damage other people's prior right of enterprise name with certain popularity. The standard to judge whether the trademark applied for registration damages the prior enterprise name right is whether the trademark is likely to cause confusion among the relevant public about the source of goods/services and damage the interests of the prior enterprise name right holders. Therefore, when judging whether the application for trademark registration infringes the prior enterprise name right of an enterprise, it is necessary to analyze whether the trademark is the same or basically the same as the prior enterprise name, and whether the business scope of the goods/services designated by the trademark is consistent with that of the owner of the prior enterprise name right. At the same time, it is also necessary to consider the goodwill, popularity and influence of the enterprise enterprise name. Finally, it is emphasized that the goodwill and popularity influence carried by the enterprise enterprise name should not be limited by the scope of administrative division, but should be comprehensively analyzed and judged according to the enterprise's business history, the scope of product sales and the breadth of enterprise publicity.