2016 was a winning year for Western trademarks in China. It produced an unprecedented number of decisions – two, to be exact – in which China won praise for protecting foreign trademarks, affirming intellectual property rights, and developing a friendlier environment for international businesses. The only loser was trademark law itself, as the two decisions illustrate that the Chinese courts can be just as well-intentioned and misguided as the Western courts when it comes to foreign trademarks.
Air Jordan
December 8, 2016 began with newspaper headlines proclaiming: Michael Jordan wins trademark case in China's top court; Michael Jordan wins his Chinese name back; and Michael Jordan finally won the rights to his own name in China.
Although the headlines exaggerate, the newspapers are correct about China’s top court’s decision that Michael Jordan can now claim the Chinese translation for JORDAN (written as 乔 丹 and pronounced as QIAO DAN) as his trademark and exclude others from such use. This decision is astounding for a number of reasons.
First, there is an internationally accepted standard Chinese translation for JORDAN as a country and as a name (written as 约 旦and pronounced as YUE DAN). So why would any court decide that Michael Jordan is identified specifically by the first translation? The decision is based on evidence that the Chinese media has referred specifically to Michael Jordan by the first translation since as early as the 1984 Olympics, when he debuted on Chinese television playing for the U.S. basketball team. This evidence exposes a weakness in Michael Jordan’s case from a trademark perspective, and that is the fact that the Chinese translation was neither used by Michael Jordan nor used as a trademark. The evidence suggests that the Chinese translation was actually used by the public and used as information. Nevertheless, there is support for China’s top court’s decision that such use can enure to a specific owner in light of the American court decision of Coca-Cola v Busch.[1] The Coca-Cola Company advertised its products in association with the COCA-COLA trademark, which the public abbreviated as COKE. Since The Coca-Cola Company was not using the abbreviation, a competitor started using the abbreviation. The Coca-Cola Company stopped its competitor by persuading an American court that use of the COKE abbreviation by others should enure to it as the owner of the COCA-COLA trademark in order to avoid confusion.
Second, there is nothing distinctive about the name JORDAN. So why would any court decide that the first translation only identifies Michael Jordan and does not also identify anyone and everyone named Jordan? The decision is based on evidence that the Chinese company accused of taking the first translation from Michael Jordan also registered other trademarks associated with Michael Jordan specifically: a NBA silhouette that was amended to reflect Michael Jordan’s physique, the number 23 that used to be on Michael Jordan’s basketball jersey, and the Chinese names of Michael Jordan’s children. This evidence could be dismissed on the basis that none of the registrations relate to trademarks or names actually belonging to Michael Jordan; the trademarks belong to the NBA and the names to his children. Nevertheless, there is support for China’s top court’s decision in light of academic criticism of passing off, the common law forefather of trademark infringement: “why should the court be astute to say that the defendant cannot succeed in doing that which he is straining every nerve to do?”
Third, there is at least a 10-year delay between the Chinese company registering the first Chinese translation in 2000 and Michael Jordan commencing lawsuits in 2012. So why would any court reward Michael Jordan for the inexcusable delay, especially when trademark registrations are supposed to be difficult to invalidate after passing the 5-year registration period? During that time, the Chinese company had become well known to the public through its large-scale activities: registering almost 500 trademarks, investing over $10 million USD in annual advertising, establishing over 5,700 retail outlets, and attempting to become a publicly traded company. If it is wrong for one to benefit from Michael Jordan’s popularity, then is it not equally wrong for the other to benefit from the Chinese company’s decade of advertising? This evidence could be a reason behind China’s top court’s decision that Michael Jordan can only claim the Chinese translation for JORDAN with respect to the writing (乔 丹) but not with respect to the pronunciation (QIAO DAN). This means that although the Chinese company can no longer use the Chinese characters, it can continue to use the English Romanization by which it is also known. It can also use other Chinese characters with the same pronunciation, which will compete with and dilute the uniqueness of the Chinese translation that Michael Jordan just won.[3]
If Michael Jordan could have known that this would be the result, would he still commence the lawsuits in 2012 or would he choose to rebrand instead? His decision was probably pre-determined by the advice he sought. For example, an ad agency would know nothing of litigation but be quick to advise on rebranding. The marketing experts might realize that there is no mandatory Chinese translation for JORDAN. This means that Michael Jordan was free to ignore both the internationally accepted standard Chinese translation and the specific translation given to him by the Chinese media. He was free to create and register his own Chinese name, use it in all future communications, and publicize in future interviews that any other Chinese translations have nothing to do with him. Doing so could have neutralized the Chinese company and publicized its illegitimacy just as effectively, but without the years and fees spent on litigation. On the other hand, a law firm is not in the business of rebranding but would have ample advice on litigation. The legal experts might assume that Michael Jordan’s situation is the same as that of Jeremy Lin and Donald Trump.
Linsanity
Jeremy Lin now plays point guard for the Charlotte Hornets, the NBA team owned by Michael Jordan. When he filed applications in China for his trademarks, including JEREMY LIN and LINSANITY in English, he discovered that another company in China had already registered his Chinese name. His situation differs from that of Michael Jordan, however, because he does not have the option of rebranding. His Chinese name is independent, as it is neither a standard translation nor a media designation of his English name. His Chinese name is also much more personal, as it what his parents have called him since birth. Fortunately for Jeremy Lin, his boss already knows how to litigate and win a trademark case.
Trump Toilets
Donald Trump owns multiple trademark registrations in China for TRUMP, which he licensed on everything from steaks to universities. He failed to invalidate other trademark registrations in China such as TRUMP toilets and DUMP WITH TRUMP toilet paper, and he was unsuccessful in invalidating a registration in 2006 for TRUMP construction services. That registration in 2006 blocked his repeated attempts for a decade to register TRUMP real estate services. His situation differs from that of Michael Jordan, however, because this surname is a common word in the English dictionary. In light of the facts that China has a first-to-file trademark system, that the registration in 2006 is supposed to be difficult to invalidate after passing the 5-year registration period, and that TRUMP is a common word, it was nothing short of astounding when the prior registration was invalidated and Donald Trump registered his own application. Although this happened shortly after the U.S. election, the reasons are still unclear for the decision.
The two decisions illustrate that the Chinese courts struggle with foreign trademarks as much as Western courts. As countries continue to harmonize intellectual property laws and negotiate trade treaties, it is equally important for courts to make decisions that are in consistent with their own trademark practices and respectful each other’s trademark theory.
U. Shen Goh is a Ph.D. Candidate at Osgoode Hall Law School.
[1] Coca-Cola v Busch et al, 44 F Supp 405 (ED Pa 1942).
[2] NG-LOY Wee Loon, Law of Intellectual Property of Singapore (Singapore: Sweet & Maxwell Asia: 2008) at para [18.1.4].
[3] The problems and solutions associated with Chinese characters and their English Romanization are discussed in U. Shen Goh, “Branding Unfair Competition: What Foreign-Language Marks Mean for International Businesses” (2015) 15 Asper Rev Int’l Bus & Trade L.