China’s Supreme Court List Dior trademark case as the leading case

Recently, China's Supreme People’s Court (“SPC”) released a new batch of leading cases, covering the fields of intellectual property, enforcement and environmental protection. Among these leading cases, the trademark case ruled in favor of Christian Dior (“Dior”), a famous French cosmetics company, has aroused widespread attention.
This case implies a strong signal of China’s efforts to encourage international trademark registration and to create a hospitable environment to international business. This article will give a brief introduction of the Dior case.

Backgrounds
On 8 August 2014, Dior applied for trademark territorial extension to China through the international bureau of World Intellectual Property Office (“WIPO”), requesting China to grant trademark protection to this three-dimensional trademark.

On 13 July 2015, China Trademark Office (“CTMO”) issued a notice of rejection, rejecting Dior’s application on the grounds of lack of distinctiveness. Dior filed an application for review of the refusal, but on 22 February 2016 the review was rejected by the review committee of CTMO due to the same reason.

According to the  conclusion of the review, the applied trademark is a figure composed of bottles, which can easily be identified as a common container for designated commodities. It is difficult for consumers to recognize and distinguish the origins of the designated commodities. The evidence on the record submitted by Dior is not enough to prove that the applied trademark has formed a unique linkage with Dior through publicity, and has not obtained the significance in long-term use.

Dior filed an administrative lawsuit against the review decision at Beijing Intellectual Property Court and pointed out that in the review of the refusal the three-sided view of the applied trademark has been submitted to the review committee, which showed that the applied trademark contains the distinctive text "j'adore", so the applied trademark can play a role in distinguishing the origin of the commodity. In addition, Dior also claimed that the applied trademark has obtained strong distinctiveness through use.

Still, the first hearing was denied by Beijing Intellectual Property Court. Dior filed an appeal at Beijing Higher People's Court after that. On 23 May 2017, Beijing Higher People's Court made a second hearing judgment, rejecting DIOR's appeal and upholding the initial judgment.

In addition, Beijing Higher People's Court held that where an application for the registration of a three-dimensional trademark is filed, the applicant shall declare that in the application, otherwise it shall be deemed as a graphic trademark. According to the Implementation Regulations of trademark law, Dior should apply for the trademark to be a three-dimensional mark and submit the trademark design with at least three sides of view to the trademark office within three months from the date of registration in WIPO. However, Dior failed to provide the trademark before the deadline, so the Court deemed the trademark as a graphic trademark in this case.

On 18 September 2017, Dior filed a retrial at the SPC upon the denial verdict of Beijing Higher People's Court. On 26 April 2018, the SPC held a public hearing on the trademark rejection review case of Dior.

Focus of Disputes in this Case

1. Whether the applied trademark has inherent significance

Dior's opinion:

1. The applied trademark is a distinctive three-dimensional trademark designed by Dior for J'adore perfume. Trademark distinctiveness refers to the elements and combinations that constitute a trademark, which have obvious characteristics on the whole and can be distinguished from other trademarks on the same or similar commodities, thus having the function of identifying the source of products with inherent distinctiveness.
    
2. The design of the perfume bottle had been registered in China as early as 2011 with the trademark no. 7505828. The two trademarks are identical in appearance.
   Compared with the previous application, Dior now requested the territorial extension of the identical three-dimensional trademark aiming to expand the application scope of the trademark and especially emphasize the application in perfume, which strengthened the protection of the three-dimensional trademark.
    
3. Third parties have generally recognized the uniqueness of perfume bottle design in perfume and related commodities worldwide.
    
4. Some three-dimensional trademarks with a slightly lower significance than the trademarks in the case have been registered earlier. (e.g., Beer bottle on 33 categories of alcoholic goods).

CTMO's opinion:

The unique design is not the same as being creative. Otherwise, copyrighted paintings and even some artworks can be applied as trademarks. The subject of trademark recognition is the consumer. The supported evidence is supplemented by words to explain its origin, which demonstrated the insufficiency of the distinctiveness of the applied trademark.

2. Whether the applied trademark has gained significance through use

Dior's opinion：
After 20 years of long-term and stable promotion, popularity, and significance have been steadily improved. There is a linkage between the trademark application and the applicant. The applied trademark has already played a role in identifying the source of commodities.

CTMO's opinion:
The perfume bottle has the character "J'adore" on the bottom, and some text descriptions. All the evidence of its use cannot prove whether it is merely the recognition function of the three-dimensional trademark or the combined function of words. In practice, it is impossible to verify whether consumers only like bottles with aesthetic taste and buy them, or only take bottles as a consideration. If it is the latter, it means that the bottle is not the identification of the product source, but the design of the outer package to attract consumers to buy, which is not the use of the trademark. The significance of trademark should be decided by whether the use or authorization will result in obstructing competition. If “J' adore” is well-known enough, it would be protected by the famous commodity packaging and decoration rights in the anti-unfair competition law, but not necessarily by the trademark rights.

After exchange of evidence and statements of both parties, the SPC held that CTMO should re-examine the application for territorial extension protection of Dior’s trademark, and the following factors should be taken into account in the re-examination:

• The significance of the trademark obtained through the use
• The principle of consistency of review standards

SPC also noted that trademarks similar to “J'adore” have been registered. So CTMO should not use a case-by-case review as an excuse to ignore the uniformity of enforcement standards. Therefore, the SPC denied the verdicts of the first and second hearings as well as the decision of refusal review made by CTMO, and decided that CTMO shall re-review and make a new decision.

Outlook
Till 17 January 2020, the applied trademark of Dior is still pending as shown by the search result in CTMO’s website. It remains to be seen what decision will be made by CTMO. However, this case shows China’s aim to optimize its trademark registration regime and to create a more unprejudiced intellectual property environment for foreign companies. We will keep an eye on this case for further update.