Shanghai Saiyang Technology Co., Ltd. (Saiyang) applied to register the trademark “莫代尔” (Chinese translation of Modal) in August 2000, to cover clothes in Class 25, and the trademark was registered in December 2001.

Thereafter, the name “modal” became the common name for a fiber raw material out of which yarns, fabrics and other textile materials are made. This was shown in the "No. 1 Amendment to the National Standard of Textile Terminology (Chemical Fibre)" (No.1 Amendment) that came into effect on March 1, 2006.

In February 2009, Lenzing AG (Lenzing) requested the cancellation of the “莫代尔” trademark on the grounds that Modal had become the generic name of a fiber material, and that the use of such generic name as a trademark for clothes, shoes and caps was against the Trademark Law.

In August 2010, the Trademark Review and Adjudication Board (TRAB) dismissed Lenzing’s request and upheld the registration of “莫代尔”. The TRAB maintained that the No.1 Amendment, which included Modal as the name for a fiber made by chemically resolving cellulose, was dated December 31, 2005 and came into effect on March 1 2006, and that both dates were later than the registration date of the trademark in question. Moreover, Lenzing had not provided evidence to show that Modal had been used as the common name for a new generation artificial fiber prior to the registration of the “莫代尔” trademark. 

Lenzing filed a lawsuit before the Beijing No.1 Intermediate Court, who upheld the TRAB’s decision. The Court considered, not only, that the registration date of the trademark was far earlier than the date of the No.1 Amendment, but also, that since a Chinese word may have multiple meanings, the fact that Modal (in Chinese) designates a fiber name according to the national standard does not deprive such word of the possibility to indicate the source of goods. Lenzing further appealed to the Beijing Higher People’s Court, who upheld the first instance judgment, considering that any factual change (in the distinctiveness of the trademark) that may occur after the registration cannot be taken as grounds for cancellation of that registration.

Comment:

This case opportunely points at two questions for which the Current trademark Law of China has no response : (1) there is no provision relating to the cancellation of a trademark that has become the generic name of the products that it designates, and vice-versa, to this lack of provision in law corresponds another “loop hole” : (2) if a trademark has been registered in spite of not being distinctive at the time of the registration (which makes it a potential target for a cancellation procedure), but which, since that date, has acquired through use a satisfactory level of distinctiveness …Can it still be revoked ?