Solution to Conflict on Intellectual Property Rights in China

Conflict on intellectual property rights (IPRs) is now a common problem not only in a number of countries but also in China, the most populous and the largest market of the world. The conflict of IPRs in China usually occur between trademarks vs. industrial designs; trademarks/industrial designs vs. copyrights; trademarks vs. trade names; trademarks vs. domain names etc.

Conflict of rights arise mainly due to lacking institutionalization of legal system for protection of various IPRs objects, where each object to be governed by different rules both establishment and enforcement of the rights. For example, a copyright is protected automatically when the work is completely created, while the rights conferred to a trademark, a patent or a trade name are only established when registering with the competent authorities. The problem of conflict sometime become complicated since the IPRs are often overlapped when a new product may be protected by various IP objects and may be owned by various holders.

To solve the conflict on IPRs in China, the right holders have two options as follows.

First, the competent authorities may be required to solve the conflict of rights by cancellation actions.

Second, the right holder can sue in the court to request a transfer or a cancellation of the rights. However, in practice, the courts usually were not willing to participate in settlement of the cases which were conferred the rights by the administrative governing Body. So, it needs to pursue all administrative remedies before filing a lawsuit to confirm the legal basis of the case or not? On the increase of the IPRs cases, the Supreme Court issued Circular dated March 01, 2008 guiding the jurisdiction as well as the procedures to settle cases related to conflict of IP rights.  

• A case related to conflict of rights between a registered trademark with a prior right such as a copyright, an industrial design, a trade name, which would be filed directly with the court.

• Conflict of rights between registered trademarks would be settled by the State Trademark Office (STMO) or the Trademark Review and Adjudication Board (TRAB), the people's court would not handle this litigation in a law court.

According to Article 1 (2) of the Circular, civil disputes related to unauthorized uses will be directly handled by the court, namely:

1. A registered trademark was used by the others for their products out of the list of goods or services being protected.

2. Someone else altered characteristics of the mark to such an extent that made a major alteration.

3. Trademarks being registered in the same goods/services with an original registered mark by the way of weakening elements and highlighting other elements of the earlier mark so that it would be a likelihood of confusion.

All of the above situations would make a fundamental change beyond the scope of protection of trademark rights, and would be considered as a new unregistered mark. Therefore, the court would handle such disputes.

If a trade name was so identical or similar to the corporate name of other business that found a likelihood of confusion to exist where the relevant public could be confused, the case would be settled under the Unfair Competition Law.

In addition, a corporate name being used in China, including the fact that it was registered or met foreign regulations shall not be conflicted with business names or trademarks being used prestigiously in China. The acts of using such corporate name would be considered as an unfair competition or a dilution of trademark according to the territorial conception of intellectual property. In this case, the court may order the infringer to change its trade names or trademarks along with the civil liability.

TVH