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Sony Ericsson and other trade marks in China

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Released 20 October 2008

This case involving Sony Ericsson is of great interest to foreign companies doing business in China, particularly those threatened by bad faith registrations in China.

Paul Jones, a lawyer from the Toronto-based firm Jones & Co, has the responsibility for preparing the section on IP in China for the ABA International Sections Year In Review. Whilst making his preparations he came across this case involving Sony Ericsson.

Paul reports that a number of famous marks have had problems in China with bad faith registrations by third parties. If somehow the registration of the mark in China has been overlooked, the third parties will register the mark in the Latin alphabet. And if not they will try to register the Chinese characters. He emphasises the importance to always develop and register a Chinese character version of the brand.

Sony Corporation has been doing business in China for many years. Its Chinese character name, pronounced "suo-ni", is well recognized throughout China. Ericsson, a Swedish company, was founded in 1876 and it too has a Chinese character name, pronounced "ai li xin". Paul reports that in 2001 the two comapnies formed a joint venture to manufacture and sell mobile phones. The problem of registering the new name Sony Ericsson in Chinese characters as a trade mark then became apparent.

Unfortunatlely for Sony Ericsson, an astute Chinese businessman, Liu Jianjia from Guangzhou, southern China, filed an application to register the mark pronounced "suo'ai" with respect to DVD/CD players, mobile phones, speakers and entertainment goods, cassette players and the like on March 19, 2003 (No. 3,492,439). Sony Ericsson opposed the application but the mark was registered on August 7, 2004. Sony appealed to the Trade Mark Review and Adjudication Board ("TRAB") but it lost again. China is a first-to-file jurisdiction.

Sony Ericsson then appealed against the TRAB decision to the Beijing No.1 Intermediate Peoples Court. The decision, dated August 10, 2008, is available at the following link: http://ipr.chinacourt.org/public/detail_sfws.php?id=22442

Sony Ericsson had put forward three reasons as to why Mr. Lui's registration should be removed:

1. That the registration was contrary to Article 10 (8) of the Trade Mark Law. This provision denies registration to marks which are "detrimental to socialist ethics or customs, or having other unwelcome influences." The court decided that while the dispute has a certain public interest, its impact does not reach the field of ideology or the political system.

2. Sony Ericsson said that their mark was "well-known". However their joint venture in China was known as "Sony Ericsson Mobile Communications Products (China) Ltd." (in Chinese - Suo'ni Ailixin Yidong Tongxin Chanpin (Zhongguo) Youxian Gongsi) and had only been in existence for a short time, and the evidence to prove such status was insufficient. So Sony Ericsson lost on this point also.

3. Lastly, Sony Ericsson argued that the registration was contrary to Article 31 of the Trade Mark Law, which provides that "No applicant for trade mark registration may infringe another person's existing prior rights, nor may he, by illegitimate means, rush to register a trade mark that is already in use by another person and has certain influence'. Sony Ericsson had been advertising on Chinese websites since December 2002 using the mark "suo'ai". The Court took note of the fact that, to the average Chinese speaker, the name "Suo'ni Ailixin" can be cumbersome and that Chinese speakers often shorten such names or phrases by using the first characters of each word. Thus the Court said that the abbreviation of Sony Ericsson to "suo'ai" would be very natural and that it is not surprising that most Chinese would consider the mark to suggest the goods are associated with Sony Ericsson.

The Court stated that the purpose of Article 31 is to prevent violations of the principle of good faith - this being a key principle of China's civil law system and is enunciated in Article 4 of the General Principles of the Civil Law. The Court said that the joint venture between Sony and Ericsson was widely reported in the press and that therefore Mr. Liu would obviously know about it. Therefore his actions do not have a clear legitimacy. Mr. Liu's application for the mark was in violation of the principle of good faith. Accordingly the Court ruled that the decision of TRAB in favor of Mr. Liu was overturned and that the opposition by Sony Ericsson to the registration of the mark by Mr. Liu is to be reviewed again by TRAB.

Paul Jones also reports that the currently proposed amendments to the PRC Trade Mark Law include a new Article 7 that requires that all applications for and use of a trade mark be undertaken in good faith.

This case brings good news to large companies whose brands are well advertised and well known, and who have the resources and time to pursue such cases. Unfortunately, one can imagine that it isn't as easy for smaller business enterprises.

Inam Ali is a Solicitor specialising in Intellectual Property and Commercial Law. He can be contacted by email at inam.ali@lawdit.co.uk


About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.



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Article Published/Sorted/Amended on Scopulus 2008-10-25 00:19:43 in Legal Articles

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