Legal cases on ambush marketing - Two cases in China

Ambush Marketing is known as the attempt of advertisers to associate themselves or their products and services with a major event (mostly a sports event) without being an official sponsor. The intention of which is to capitalize on the goodwill, the reputation, and the popularity of the event. Such campaigns hover on the borderline between ingenious marketing and lawbreaking. Ambush Marketing activities are most likely to be expected on the occasion of this years major sports events, the UEFA EURO 2012 in Poland and Ukraine and the Olympics taking place in London. We will present you cases and news throughout the year and will inform you about the legal impact.

Today we present you the stories of two thrilling trademark cases currently going on before Chinese Courts. Two popular sportsmen fight for their naming rights. The Chinese Lawfirm Vivien Chan & Co. summarizes and comments the cases and gives us an insight into the legal backgrounds.

Case No 1: Big Trouble in China - Michael “Air” Jordan fights for his naming rights
What is going on?

Qiaodan Sports is a Chinese manufacturer of sports products and apparel, founded in 1984, formerly known as “Fujian Province Jinjiang CheDai Xibian Commodity No. 2 Manufactory”. It acquired its new name “Qiaodan Sports” in 2000 and until today registered a huge number of trademarks containing the name QIAO DAN in Chinese characters and “QIAO DAN” for apparel as well as the following picture:

Michael “Air” Jordan, the former NBA basketballstar, is widely recognized as “QIAO DAN” (being a transliteration of "Jordan") in China. Qiaodan Sports used the Chinese name of Michael Jordan as its trademark and trade name, which misled the public that there is some relationship between Michael Jordan and Qiaodan Sports, or the use of the trademark and trade name by Qiaodan Sports is authorized by Jordan. In fact, a market survey in Shanghai shows that 90% of 400 local people believed that Qiaodan Sports was Jordan's brand.

In February 2012, Michael Jordan sued Qiaodan for name right infringement with the Court of Haidian District of Beijing. However, the case was rejected by the Beijing Court, since the Court found that the name “Jordan” is a common name in the USA and therefore not unique, and that there is no exclusive relationship between “QIAO DAN” and “Michael Jordan”.

Subsequently, Jordan filed a lawsuit with the Second Intermediate Court of Shanghai, which was accepted on 6 March 2012. Jordan claimed that Qiaodan Sports infringed upon his name right. The court hearing has not been held yet.

So what does relevant law governing the protection of personal name rights in China say?

  1. Under Article 99 of the Chinese Civil Code, “Citizens shall enjoy the right of personal name and shall be entitled to determine, use or change their personal names in accordance with relevant provisions”.
     
  2. Under Article 31 of the Chinese Trademark Act, “No trademark application shall prejudice another person’s existing prior rights and unfair means shall not be used to preempt the registration of the reputable trademark of another”. In this case, “prior rights” refers to rights apart from trademark rights, such as trade name right, copyright, rights to the name of a natural person, etc.
     
  3. Under Article 5(3) of the Chinese Anti-Unfair-Competition-Act, a business operator should not adopt unfair means in their business transactions so as to damage their competitors. This can include using the name of another enterprise or individual name, and causing confusion between commodities.
     

However, in this case, Qiaodan Sports only adopted the Chinese transliteration of the name “Jordan”. As Michael Jordan sued Qiaodan Sports, he must provide evidence

  • that there is an exclusive similarity between “Michael Jordan” and “QIAO DAN”, and
  • that the similarity causes confusion among consumers.

What about cancellation actions against a registered mark in China?

In China, actions for cancellation of a registered trademark should be filed with the China Trademark Office (“CTMO”) and Trademark Review and Adjudication Board (“TRAB”). After going through these administrative proceedings, if either party disagrees with these decisions, it may file an appeal with the Court.

There are two kinds of cancellation proceedings in China: (1) cancellation based on non-use for three consecutive years and (2) cancellation based on improper registration, which shall be filed within five years from date of registration. However, for bad-faith registrations, the owner of a well-known trademark is not bound by the five-year limitation.

In the Jordan-case, non-use cancellation is obviously not applicable since Qiaodan Sports has used the marks for over ten years. Furthermore, the marks QIAO DAN and were approved for registration for over ten years, so cancellation based on improper registration is also not applicable

As such, Jordan filed an action on infringement against his personal naming right. If he succeeds, the remedies available will be awards of damages, prohibition of use of the marks by Qiaodan Sports, etc., but he will not be able to cancel the registrations.

Case No 2: Yi Jian Lian

A similar case is Yi Jian Lian vs. YI JIAN LIAN Sports Products (China) Ltd.

Yi Jian Lian is a famous basketball star in China. He plays for the Dallas Mavericks (last NBA champion) and is widely regarded as China's most promising prospect since Yao Ming.

YI JIAN LIAN Sports, a Chinese manufacturer of clothes, registered the mark "yi jian lian" for apparel. There is no relationship between the basketball star and YI JIAN LIAN Sports.

Yi filed cancellation of this trademark based on improper registration. TRAB found that the right to a name is one of the prior rights as prescribed in Article 31 of the Chinese Trademark Act. However, when deciding whether the trademark in dispute has caused damage to the prior naming right of a person, the popularity of the person shall be taken into consideration.

In this case, Yi was able to provide substantial evidence to establish his popularity in China before the filing date of the mark in dispute, such as the awards that Yi had obtained in the basketball games. Therefore, TRAB found that the trademark in dispute infringed rights in the name Yi, and cancelled the trademark.

YI JIAN LIAN Sports did not agree with the TRAB’s decision, and appealed to the First Intermediate Court of Beijing, then to the Higher Court of Beijing, but failed. The mark "yi jian lian" was finally cancelled.

 About Vivien Chan & Co.:

Vivien Chan & Co. is a full-service law practice with offices in Hong Kong (1985), Beijing (1993) and Shanghai (2003). They are consistently recognized as a premier law firm for and in GreaterChina. With nearly 30 years of doing business in China, their Hong Kong and China teams have an in-depth understanding and knowledge of the Greater China legal culture and market dynamics. Vivien Chan & Co. have advised on some of the most significant acquisitions, arbitrations and intellectual property enforcement to date. Their ability to collaborate across practices and borders with ease allows them to bring the right team to every transaction, regardless of location.

28. April 2012