Asia IP

A trademark dispute on the Weixin mark – the Chinese name of WeChat messaging and calling app – decided by the recently-established Beijing IP Court has caused heated discussion. Two months before the release of WeChat by Tencent in January 2011, Trunkbow Asia Pacific (Shandong) applied for the Weixin trademark. The two parties applied for and used the trademark without knowledge of the other’s use.

The court later issued the first instance judgement, afirming the Trademark Review and Adjudication Board (TRAB)’s refusal to register the Weixin trademark, because the earlierregistered mark would harm public interest, since WeChat has exerted great influence on the Chinese social media market. Therefore, registration of Trunkbow’s Weixin mark would have unhealthy inluence on the existing and stable market and public recognition of the origin of WeChat.

According to He Jing, a senior consultant at Anjie Law Firm in Beijing, controversy lied in the court’s application of Article 10(1)(8) and its reasoning about the public interest. “This judgment received both appraisals and criticism. Major concerns towards this judgment relate to its overlybroad interpretation of Article 10(1) (8) of the Trademark Law and its negative inluence on the first-to-file trademark registration system in China. Opponents believe that determination of unhealthy inluence should be based solely on the existing conditions at the time of trademark application,” he says.

The judge of the case, Zhou Liting, later wrote an article (published via WeChat) defending the opinion. To her, the original well-intended idea of Trunkbow registering Weixin trademark does not mean the social inluence it may exert will not be harmful.

Trunkbow provides a service that helps users locate the calling numbers from their cell phones. Tencent, on the other hand, gained big success in promoting the WeChat brand – the registered number of users was 400 million in July 2013, and double that in November 2014. Zhou believes that the wide use and recognition of WeChat functions by different kinds of institutions –including government sectors, banks and schools, etc. – serve the public to a large extent. “Under this circumstance (that WeChat has had great impact to the society), the controversial registration of Weixin mark (by Trunkbow) would cause confusion among users in terms of origin, content and nature of the service,” she says, adding the negative inluence may also bring ill effects on the gradually stabilizing market.

Richard Bird, head of Freshields Bruckhaus Deringer’s intellectual property practice group in Asia, provides some insights on this case. While some commentators have asserted that the WeChat decision calls into question China’s commitment to the first-to-file principal, Bird finds this doubtful, saying that it is more accurate to view the decision as an example of creative judicial decision-making.

The court used some of the more flexible tools available to it under the Trademark Law to balance the conflicting interests in the case to reach what the court considered to be the “right outcome.” Although the court’s approach is not without precedent in terms of the occasional use of Article 10(8) to resolve cases that did not it within other provisions of the Trademark Law, the Weixin decision has to be viewed as a oneoff given the unique fact pattern, Bird says. “Very few trademarks have ever penetrated the consciousness of the Chinese public in such a short period of time. Had the court ruled in favour of the owner of the earlier-filed mark, this could have led to the social media service being forced to change its names – which, were this occur outside of China, it would be equivalent to Facebook being forced to change its name,” he says.

Mr. He adds that the way the judge looks at the internet is very interesting, because she seems to genuinely believe that if the Weixin mark is registered to someone other than Tencent, the potential confusion caused to 800 million WeChat users would be so significant that it would reach to a level that the court would have to intervene on the grounds of public interest. “She gives a much bigger weight to what trademark means for hundreds of millions of internet users and elevates the potential confusion on the Internet to a level of public interest,” he says.

While the decision is inevitably controversial, Mr. He believes it remains of the same argument that the internet has made the world flat, and Chinese trademark authorities should recognize those smaller brands reputable in other countries but not in the China market but which may have gained reputation in China through the internet.

Bird adds that although the new China Trademark Law contains additional provisions to frustrate trademark squatting, including the general requirement in Article 7 that all applications must be made in good faith, it is too early to tell whether or not the new law will result in significant changes in the approach of the China Trademark Office (CMTO), TRAB, and the courts to bad faith filings. For example, the CTMO’s trademark examination handbook has not been updated to reflect changes in the new law.

“For foreign SMEs, China continues to carry heightened trademark-related risks when compared to other jurisdictions in Asia and elsewhere, due in large part to the dificulty in successfully opposing and invalidating bad faith trademark registrations,” Bird says.