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
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
Inam Ali is a Solicitor specialising in Intellectual Property and
Commercial Law. He can be contacted by email at
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Article Published/Sorted/Amended on Scopulus 2008-10-25 00:19:43 in Legal Articles