HongFangLaw ~ Law Updates ~ n’ 78
01 March 2019

Seeking protection of merchandising rights in trademark opposition
A review on the case “MAO LI LUAN BU”

Case Overview

1. The Facts

The Opposed Trademarks No. 18742871 and No. 18742961 “MAO LI LUANBU” were filed by Xike (Shanghai) Culture Development Co., Ltd. (“Xike Co.”) on 29 Dec 2015. They were published for opposition on Trademark Gazette Vol. 1526. The designated services were “traffic information, car rental, tour guides, tourist agencies (except hotel reservation), escorting of travelers, sightseeing, booking of seats for travel, arranging of cruises, arranging of travel tours” etc. in Class 39 and “text publishing (except advertising text), publication of books, electronic books and magazines online publishing, providing online electronic publications (not downloadable), training, organization of exhibitions for cultural or educational purposes, film production, other than advertising films, production of shows, production of radio and television programs, television entertainment” etc. in Class 41.

2. The Grounds

Our client and Opponent Wang?Zichuan?(aka Mao Li in stage name and pen name) is the author of MAO LI LUAN BU, a best-selling travel book. In the opposition, we claimed his exclusive rights to using the name Mao Li and to merchandising his book’s title. The namesake trademarks which incorporated Mao Li was opposed for their infringement upon the Opponent’srights of name and merchandising rights. Meanwhile, the Opponent’s interests were impaired in view of him being a celebrity and his influential work. If the Opposed Trademarks were to be registered, consumers might be misled to associate the services bearing the mark with the Opponent and his book.

In addition, the Respondent may have filed the Opposed Trademarks in bad faith. A shareholder of?Xike?Co. had known and cooperated with Mao Li, and thus should be aware of his name and work. Still, Xike Co. attempted to register the identical marks on highly relevant services, which could hardly be considered as without fault.

Based on the above, we cited the Opponent’s prior rights to using his name Mao Li and merchandising the book title MAO LI LUAN BU pursuant to Article 32 of the Trademark Law and argued against the Respondent’s preemptive filings as a violation of Article 15 of the same law.

3. Official Decision

The China Trademark Office (CTMO) determined based on our submitted evidence that the Opponent’s pen name Mao Li and his travel-themed work MAO LI LUAN BU published in 2013 had a certain influence among the relevant public. The Opposed Trademarks were identical to the book’s title and likely to damage the Opponent’s rights and interests by falsely indicating to consumers licensing or other relationships between the subjects.

It was therefore decided that the No. 18742871 and 18742961 applications “MAO LI LUAN BU” in Classes 39 and 41 should not be registered.

Case Analysis

Among the rights we asserted in the proceedings, the “merchandising rights” of the best-selling book title deserve more discussion. It is actually an interest not stipulated in earlier Chinese law, as opposed to copyrights, trademark rights and rights of an image that is more explicit and more often cited. Nevertheless, it is still applicable because authors or other owners of names of works and characters may attain reputation, popularity and other benefits from the creations or ownership, and are thus entitled to make profits by the merchandization of such.

As for rights of a name, we believe the following conditions should be in order when seeking protection on such basis, as revealed by the Trademark Law, the Anti-Unfair Competition Law, and relevant judicial interpretations as well as similar precedents. 1) The name at issue should be known by and familiar to the relevant public, and concerning the natural person laying such claims. 2) There should be a stable cross-reference between the name and the person. From a psychological standpoint, though clashes of names do happen, the most famous bearers first occur to consumers when a name is given. Therefore, a celebrity’s name (real name or not) harbors great value and influence and will translate into massive sway in advertising and on consumer behavior once it is exploited in the business world.

Besides the Opponent and the names’ fame and popularity, we also view the relevance of the services under the Opposed Trademarks and the likelihood of confusion as an important factor in light of similar precedents. Trademarks function to identify the source of products and services, distinguishing one from the other as effectively as they could. When citing prior work or character names that have wide coverage, the interests attached thereto do not certainly thwart other’s rights across the board but are limited within a scope that is relevant. As in the “Kung Fu Panda” case where the trademark squatter’s filing was eventually dismissed, the court held that, considerably well-known work titles or character names may provoke the desire to purchase and increase the rate of transaction by attracting consumers with the symbols’ distinctiveness and influence, when they are used on particular goods or services.

After the thorough analysis, we approached the case and prepared the evidence with the following three points in mind, trying to establish the merchandising rights and rights of name that the Opponent enjoyed.

The Opponent, with the stage name and pen name Mao Li and his best-selling two-book travel series, is an influencer among the relevant public. Mao Li had become known to his readers and prompted the audience as his books hit the market. As a celebrity blogger, he had also been recognized as Mao Li on Weibo, the Chinese equivalent of Twitter, and amassed a huge following. His comments on travel topics had quite a weight in the circle. Moreover, the Opponent was interviewed, advertised, adopted to popularize brands, and televised on reality shows as Mao Li, thus boosting his fame and popularity.

The Opponent’s books had already become well-known before the Opposed Trademarks were filed. According to statistics from online book-sellers, an impressive number of copies were sold to vast areas in China. His works were also reviewed and recommended by mainstream media including popular websites, newspapers, and magazines. Thus it could be said that the Opponent’s books had well been known and recognized by the mainstream media and the relevant public, adding more influence to them.

The book MAO LI LUAN BU authored by the Opponent based on his personal experience on journey, had a theme highly relevant to the services designated under the Opposed Trademarks in Classes 39 (“escorting of travelers, sightseeing, booking of seats for travel” etc.) and 41 (“text publishing (except advertising text), publication of books, electronic books and magazines online publishing, providing online electronic publications (not downloadable)”). As a best-selling travel journal, the publication had offered the Opponent an advantageous footing and transactional opportunities in travel-related markets. The acquired reputation and interests were expected to be undermined given the work’s earlier formation and the public’s recognition of its genre as closely related to the Opposed Trademarks’ coverage.

Legal Implications

Protection of merchandising rights has not been enacted but rather granted in individual precedents. And it has long been absent from the court’s consideration. The earlier cases concerning trademarks “TARZAN”, “TIAN XIA BAOBAO” (Teletubbies in Chinese) etc. did not deliver favorable outcomes to the opponents, until such rights were first affirmed against “BANG DE 007 BOND” in an administrative lawsuit. By the time the “Kung Fu Panda” case was heard, the court had developed quite sophisticated logic and standards for examination of claims to merchandising rights against trademark filings.

Later in 2017, such rights became traceable in law as the Provisions of the Supreme People’s Court on Several Issues Concerning the Hearing of Administrative Cases Involving the Granting and Affirmation of Trade Mark Rights entered into effect. It is provided in Article 22 Paragraph 2 that, Where a party claims for the right of name with its pseudonym, stage name, translated name and other specific names, the specific name has certain reputation, the party has established stable correspondence with the natural person, and relevant public refers to the natural person with the name, the people’s court shall grant support thereto.

Notwithstanding that the stipulation was designed for administrative court proceedings, it still plays an important role, as a guideline for how merchandising rights could be protected and how far the protection could go, in oppositions with the Trademark Office and invalidations with the Trademark Review and Adjudication Board. Specific to our case, our opposition argumentation, presentation of evidence and the official decision all aligned with the essence of the enactment, and served well to bring it to practice.

Notes:

1. Judgment No. (2016) Jing-Xing-Zhong 2012

2. Judgment No. (2015) Jing-Zhi-Xing-Chu-Zi 6361

3. Judgment No. (2009) Gao-Xing-Zhong-Zi 516

4. Judgment No. (2010) Yi-Zhong-Zhi-Xing-Chu-Zi 432

5. Judgment No. (2010) Gao-Xing-Zhong-Zi 1237

6. Judgment No. Gao-Xing (Zhi) Zhong-Zi 37

If you would like some more personalized review of the news from us, please kindly let us know by writing to:public.relation@hongfanglaw.com. Thank you.