China trade marks – clarity on enforcement of colour combinations and changes to the law

24/02/2014

Colour Marks

John Deere has become the first brand owner to be awarded remedies by a Chinese court for infringement of a registered trade mark consisting of a colour combination since Chinese trade mark law first made provision for them in 2001.

In a decision handed down in January, the Beijing Second Intermediate People’s Court found that Chinese manufacturer Jotec’s use of a green harvester with yellow wheels infringes Deere’s registration of the following specific combination of colours registered in classes 7 and 9 for harvesting machines and tractors:

The mark is also the subject of a number of Community Trade Mark registrations and registrations in other territories.

John Deere had been selling green harvesting machines with yellow wheels since 1997 and applied to register their colour combination for harvesting machines and tractors in Classes 7 and 9. They sued Jotec for use of the same colour combination, seeking an injunction and compensation of 500,000 Yuan (the statutory limit on damages available under the law in force at the time) for economic losses and reasonable expenses. Deere argued that they had used the specific colour combination extensively and that it had acquired distinctiveness and achieved widespread recognition.

The Court decided that marks consisting of two or more colours are capable of functioning as trade marks and enable consumers to identify products as those of the brand owner. The court therefore found in Deere’s favour, granting them an injunction against two Jotec companies and awarding them compensation in the amount of 450,000 Yuan (around £50,000).

This decision offers some clarity that colour combinations are enforceable in China and brings China’s into line with other jurisdictions where protection is already offered to this category of marks.

Key to the decision was John Deere’s ability to demonstrate use of the specific colour combination over a number of years. Brand owners are therefore advised to keep comprehensive records of use of their colour marks which may help to prove distinctiveness of less traditional marks such as colour combinations

The decision also suggests that more reasonable compensation awards may be available to brand owners seeking to enforce their rights through Chinese courts. It remains to be seen whether other Courts will follow suit and whether the threat of greater compensation will act as a real deterrent to would-be infringers.

Interestingly, it seems there are no current plans for Chinese law makers to expand the categories of potentially registerable marks to include single colour marks.

Changes To Chinese Law

Recent updates to Chinese law have made provision for a higher statutory limit on compensation and for interim injunctions to be imposed on infringers, although clarity is needed on the attitudes of the Courts to granting interim relief.

Further changes to the law form 1st May 2014 are expected to include:

1. a further, substantial, increase in the statutory limit for compensation in Intellectual Property disputes to 3,000,000 Yuan (around £300,000) suggesting that there is potential for an award of compensation to be more in line with the actual economic impact of an infringer’s actions;
2. likelihood of confusion analysis when determining infringement at the Courts and the Trade Mark Office. This brings Chinese law more into line with other jurisdictions and is like to affect clearance of marks and watching and enforcement strategies;
3. multi-class filings allowing brand owners to designate multiple classes in a single application;
4. a requirement for Examiners to provide a preliminary determination on the registrability of a mark within a shortened period of nine months;
5. provisions for owners of “well-known” marks to prevent others from using the same mark on dissimilar goods if the use causes confusion and prejudices the owner of the well-known mark;
6. measures to tackle bad faith applications including government imposed fines for use or registration of marks in bad faith and the Office refusing to consider further applications filed by the same person;
7. registerability of sounds as trade marks.

Contact your usual Reddie & Grose attorney for advice on extending protection for your brands to China.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.