Leveraging Copyright-Based Civil Lawsuits to Combat Incontestable Pre-emptive Registrations and Infringements in China

Background

Since the establishment of its trade mark registration and protection system, China has adopted the first-to-file principle, which stipulates that the trade mark rights shall be granted to the applicant who files an application for registration in China first, adding that evidence on the use of the trade mark in other jurisdictions can scarcely be taken into account when deciding the validity or ownership of a mark. Such system facilitates the management by the China National Intellectual Property Administration (CNIPA) of the largest number of trade mark registrations in the world.

In the meantime, it provided a substantial loophole for bad-faith trade mark applicants who took advantage of such system and submitted applications for registrations of foreign brands that had not yet registered their mark in China or that had just registered their mark in its core classes but wished to expand their business scope subsequently.

GQ magazine

Condé Nast is a global mass media company that was founded in 1909 and is owned by Advance Publications. It attracts more than 72 million consumers in print, 394 million in digital and 454 million across social media platforms. Gentlemen's Quarterly, or GQ, is an international monthly men's magazine that is owned by Advance and is based in New York City; it focuses on fashion, style and culture for men, although articles on food, movies, fitness, sex, music, travel, celebrities, sports, technology and books are also featured. The US version of GQ magazine entered China in 1988 through distribution via China International Book Trading Corporation, and Zhizu Magazine was subsequently jointly published as the Chinese version of GQ magazine: 智族GQ (Zhizu GQ).

The magazine accumulated a huge reputation amongst the Chinese population through substantial distribution and commercial collaborations over the last two decades, introducing a modern lifestyle and advertising numerous international brands, focusing on men’s products.

However, for a variety of reasons, the brand owner merely registered the “GQ” mark in relation to the magazine in respect of Classes 16, 18 and others but not Classes 3 or 10, between 1994 and 2003.

Guangzhou-based individual LV Biao noted the commercial interests and potential in the reputation and commercial value of the GQ brand in the areas of men's products, as well as the absence of prior registrations of the brand. He pre-emptively applied for and registered the GQ mark in 2004, covering men’s cosmetics and products including condoms in Classes 3, 5 and 10.

Facts

Under the current legal system in China, a mark is scarcely contestable if it is registered with CNIPA for more than five years, unless it is proved that the registration is for a reproduction, imitation or translation of a prior well-known mark, adding that there is evidence to prove that the application was made in bad faith according to Article 13 of the PRC Trademark Law.

In the meantime, an investigation by Condé Nast revealed that LV had also engaged in unauthorised manufacture and distribution of infringing products by using the “GQ” mark, including facial cleanser (0301), skin care product (0306), cosmetics (0306), moisturiser (0306), toner (0306), perfume (0306), condom (1006), magazine (1606), jewellery (1403) and clothing (2501). In addition, LV Biao acquired the domain names “www.gq.cn”, “www.gqman.cn”and“gqmen.cn” from others via lawsuits based on his pre-emptive trade mark registrations. He also promoted his infringing products through websites linked to his domain names and through his WeChat account (“GQ Men's website”) and his Weibo account (“GQ Men's website official blog”), as well as other channels.

LV arbitrarily used the GQ logo on the website pages related to the gq.cn and gqman.cn domain names, and distributed infringing condom products through his WeChat account. He engaged in unauthorised use of the GQ logo in the relevant pages of the Toutiao (TikTok) account of “GQ Men’s website”, and indicated that his condom products are from an international luxury brand, implying Condé Nast.

He also copied or plagiarised a large number of articles and photographs from Condé Nast’s official website and substantially distributed them via his “GQ Men’s website” Toutiano account (identical to the official name of the official website and Condé Nast’s original Toutiao account), in order to confuse consumers (see here) and to promote his own infringing products such as condoms (see here) and cosmetics (see here).

Proposal and actions

Condé Nast sought to take action against these serious infringements on multiple fronts, including the use of the “GQ” logo on infringing products and viamedia including WeChat, Weibo and Toutiao, although its trade marks in the same classes of goods had not been registered. Rather than filing an invalidation against LV's pre-emptive registrations, it was proposed to file a civil lawsuit against LV Biao on the basis of GQ-based copyright infringement and GQ trade name-based unfair competition directly, in order to exert the following effects:

• cease all infringements and seek damages with an emphasis on cessation of the use of the GQ logo and name; and
• force LV Biao to cease his use of the mark, which will likely facilitate subsequent non-use cancellation.

Acting in this order rather than filing invalidation first and then filing a civil action will save substantial time (reducing the procedure from three to five years to one to two years – see “Actions Against Infringement” diagram) to cease infringement and acquire damages, and will avoid the obstacle of the period of immunity where the marks of LV Biao have been registered for more than five years and are essentially unchallengeable, as discussed above (given no feasibility for well-known recognition due to evidence).

Difficulties and solutions

However, this strategy did not come without difficulties, specifically relating to the following three aspects.

Whether “GQ” constitutes a copyrightable work under the law

According to Article 2.2 of the Guidelines for the Trial of Copyright Infringement Cases of the Beijing High People's Court (“The Copyright Guidelines”), the following factors should be considered when determining the originality (copyrightability) of a subject matter:

• whether it is independently created by the author;
• whether the arrangement of expression reflects the author's choice and judgement; and
• whether the fact it is original is irrelevant to its artistic merits.

Under such provision and according to other previous cases, the constitution of copyrightable work is an open-ended question that would depend on factual evidence, including how the artist created the artwork of the GQ logo independently and how the logo expressed the author's choice and judgement. Therefore, the following evidence was presented:

• a detailed description of the artist's process of creating the work;
• the arrangement of expression in the GQ artwork reflects the author's unique choice and judgement; and
• a reflection of the author’s choice and judgement from three aspects:
1. the creation of the letter typeface;
2. the selection and judgement of the letter combination; and
3. the selection and judgement of the position and combination of the letters “G” and “Q”.

Whether the use of a registered mark can still be found to be infringing – “ostensible” conflict of rights

The use of the logo on the goods not covered by the trade mark registrations of LV Biao does not constitute a conflict of right, or it constitutes an “ostensible” conflict of rights. Specifically, Article 10 of the Opinions of the Supreme People's Court on Several Issues concerning Making IPR-related Trials Serve the Overall Objective under the Current Economic Situation, issued by the Supreme People's Court in 2009, states: “Apart from civil disputes involving conflicts between registered trade marks, for civil disputes involving conflicts between registered trade marks, enterprise names, and prior rights, including disputes where the defendant has actually changed the registered trade mark in use or used the registered trade mark beyond the approved scope of goods, as long as they belong to civil rights disputes and meet the conditions for acceptance stipulated in the Civil Procedure Law, the People's Court shall accept them.” Furthermore, it is stipulated that “The fact that the allegedly infringing trade mark has not been registered at the time the case is accepted by the People's Court shall not hinder the People's Court from accepting and adjudicating it in accordance with the law”.

“Real” conflict of rights

Use of the logo in regards to the goods that are covered by the trade mark registrations of LV Biao can still be found as infringing.

In accordance with Article 1 of the Provisions on Several Issues Relating to the Adjudication of Cases of Civil Disputes Involving Conflicts between Registered Trade Marks, Enterprise Names and Prior Rights by the Supreme People’s Court in 2008, where a plaintiff initiates a lawsuit on the grounds that the words, graphics, etc, used in another's registered trade mark have infringed upon the plaintiff's prior rights, such as copyright, design patent right and enterprise name right, and insofar as the provisions of Article 108 of the Civil Procedure Law have been satisfied, the People's Court shall accept the case.

In addition, according to the Interpretation and Application of Law on Several Issues Concerning the Trial of Civil Disputes Involving Conflicts between Registered Trade Marks, Enterprise Names, and Prior Rights by the Supreme People's Court, such prior rights include not only copyrights, design patent rights and enterprise name rights listed in the articles but also the distinguishable brand names, packaging, decoration, domain names of well-known goods as defined by the regulations of the Anti-Unfair Competition Law, and other prior rights or interests.

Therefore, even for the use of marks in regard to goods being covered by registered marks of LV Biao, it was elaborated to the court that they could still be found as infringing.

Constitution of unfair competition between men’s magazine goods and men’s cosmetic goods

There is a critical question regarding whether unfair competition can be found between the distinctive name regarding the men’s magazine and men’s cosmetics and products.

Apart from copyright infringement, it was alleged that there was unfair competition between the distinctive QG name in regard to the men’s magazine and the infringing men’s cosmetics and products under the Anti-Unfair Competition Law, it was asserted that “GQ” is the name of the plaintiff's influential magazines “GQ” and “智族GQ”. Due to the plaintiff's long-term advertisements for men's fashion and lifestyle products via the “GQ” and “智族GQ” magazines, the fame of the “GQ” product name in the men’s magazine has been well recognised in the industries of men's life supplies, especially in the field of men's cosmetics, contraceptives and other daily necessities (men’s magazine v men’s products).

Constitution of unfair competition between men’s magazine and men’s cosmetic and men’s products, including condoms

The State Administration of Industry and Commerce issued a Response on “Determination on the nature of use of other’s distinctive name, packaging and decoration in regards to different and dissimilar goods”, whereby it provided that unauthorised use of another’s distinctive name, packaging and decoration in regards to different and dissimilar goods could also cause confusion and shall be found as constituting unfair competition. The plaintiff also quoted the Supreme People’s Court Xiao Mu Zhi Automobile Case, where the Court found that unfair competition may not be restricted as between direct competitors but could also exist between indirect competitors. In another case, it found unfair competition in the use of the distinctive name of Great Lake on juice products against the use of the same name on shampoo products.

Results and implications

In June 2023, Haidian District People's Court ruled that LV Biao and his affiliated Guangzhou Chloe Co., Ltd shall immediately cease infringing copyrights and engaging in unfair competition behaviour, including:

• ceasing other infringements of copyrights and unfair competition behaviours, specifically the use of infringing GQ patterns in male facial cleansers, moisturisers, toners, perfumes and other grooming products produced and sold by them;
• ceasing the online sale of goods containing the infringing GQ patterns;
• ceasing the use of GQ patterns in profile photos and articles published on three accused websites, the official WeChat account of the GQ Men Website, and the official Weibo account of the GQ Men's Website; and
• compensating Condé Nast for the loss of CNY2 million.

The same judgment was upheld in the second instance at the Beijing IP Court in May 2024.

The judgment has a significant positive effect not only on the civil lawsuit but also on the whole brand protection landscape for the plaintiff in the following perspectives.

• It established that “GQ” is a protectable artwork under Copyright Law and a famous trade name under the Anti-Unfair Competition Law of China, thus overcoming the incontestable registration of LV by finding his infringement.
• It provided the ground-breaking ruling that the GQ logo is copyrightable, giving a huge advantage to the brand protection strategy of Condé Nast as a whole, which can be quoted in fights against other pre-emptive registrations in China as well.
• LV Biao suspended his use of the GQ logo and GQ name for more than three years while the trial was ongoing, due to fear of potential legal liability, which facilitated the plaintiff's non-use cancellation against the rest of his registrations and thus completely saved Condé Nast from pre-emptive registrations and confusing use by infringers.

What can be learned from the case

Whether the brand owner could have success in China would largely depend on its selection of good lawyers and an efficient litigation strategy.

In this case, the strategy resulted in favourable court decisions and efficient deterrence, not only winning the injunction and damages but also having a significant impact on the brand protection strategy and landscape of trade mark protection for the client in China as a whole.

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Condé Nast was represented by Tahota (Beijing) Law Firm in its case against LV Biao.