China is one of the countries that examines trademark applications not only for absolute grounds for refusal, but also for Risk of Confusion with earlier Trademarks. It is not uncommon for Trademarks that are not considered to be confusingly similar in practice to be opposed. While the Office has only rarely taken coexistence agreements into account in the past, a recent court decision has defined the extent to which such agreements must be taken into account.

The Beijing Higher People’s Court has ruled that a declaration of consent by the owner of the earlier trademark in favor of the registration of the later trademark application (coexistence agreement) cannot be disregarded when deciding on trademark registration. This is for two reasons:

1. the assessment of the Risk of Confusion in the registration procedure is based on a preliminary assumption of the trademark authority or the court about the view of the relevant public in the specific case. In comparison, the declaration of consent of the proprietor of the earlier Trademarks reflects the view of a directly interested party. Their view is likely to be closer to the market reality than that of the registration authority. It is very unlikely that the proprietor of the earlier Trademarks would give his consent to the later trademark if the later trademark could be confused with the earlier one because it would harm his interests. For this reason, a declaration of consent is strong evidence against the Risk of Confusion, unless specific factors to the contrary are obvious.

2 A Trademarks is a property under civil law. Based on the principle of autonomy of Injunctions in property, the trademark owner can freely dispose of his rights as long as this does not violate a vital public interest. The declaration of consent is an expression of the trademark owner’s free will, with which he permits the coexistence of a similar trademark with identical or similar goods. In view of the fact that the Trademark Act is intended to protect the interests of earlier trademark owners and consumers, a coexistence agreement should only be disregarded if there is sufficient evidence that the coexistence agreement infringes the interests of consumers.

In view of this judgment, the following groups of cases can be distinguished when two Trademarks are opposed whose goods or services are identical or similar:

a) If the Trademarks applied for is identical to the opposing earlier Trademarks, the Trademarks can no longer perform the central function of distinguishing origin. The consumer’s interest in being protected against the Risk of Confusion therefore prevails. For example, the Application for the Word Mark RANGER was rejected despite a declaration of consent because it was identical to the earlier mark.

b) If the opposing Trademarks are similar because the dominant elements of the Trademarks are identical, a declaration of consent will only be taken into account if there is a legal relationship between the trademark owners that precludes confusion about the origin of the goods. For example, the word/figurative mark “NTT Data” was approved although the dominant and only distinctive part, namely “NTT”, was identical to the earlier word/figurative mark “NTT Communications”. This was because the Trademarks applicant was the subsidiary of the owner of the earlier mark.

c) If the Trademarks applied for and the opposing Trademarks are very similar, the declaration of consent will be taken into account as one of several factors in the overall assessment. Other criteria to be taken into account are, for example, the reputation of the opposing Trademarks and the fields of application of the goods and services. For example, the trademark application “UGG” was allowed against the similar trademark “UCG” because, in addition to the declaration of consent, the business areas were also different. If, in addition to the matching parts, there are also striking graphic differences between the Trademarks, a coexistence agreement can usually lead to registration of the application.

Therefore, if third-party trademarks are opposed in Chinese Examination Proceedings, it is worth examining the circumstances of the individual case in detail. In addition to the arguments against the Risk of Confusion, the coexistence agreement will be given greater weight in the future.

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