According to the Beijing No. 1 Intermediate People’s Court, the term “other harmful influence” only refers to public order, not to private interests.

This article of the current Trademark Law (or article 9 of the preceding version of the law), provides that “The following signs shall not be used as trademarks: …. (10) those detrimental to socialist morals or customs, or having other harmful influence”.

In this case, the French company Lacoste applied, through the international channel, for the registration in China of the mirror image (facing left) of its already famous crocodile device (facing right), a trademark already registered in China.

 
The CTO objected to this application, citing another prior trademark application for a “left facing” crocodile device, very similar to the Lacoste trademark. This application had been made by a HK company called Crocodile Garments Ltd (CGL). The cited trademark was, in fact, subject to an opposition by Lacoste and, after a long procedure, both sides reached an agreement whereby CGL withdrew all its crocodile device trademark applications.

 
As a result of this settlement, there was no obstacle left for the registration of the “left facing” crocodile device of Lacoste.

Yet, when the case came to be examined by the TRAB, the decision of rejection was maintained on the grounds of Article 10.8 of the Trademark Law: “other harmful influence”.  The TRAB took the view that because the CGL trademark had been used for a long time, the consumers had been able to distinguish the difference between the two trademarks (left and right), and considered that, if Lacoste was allowed to register its own trademark facing left, this could cause misidentification in the market.

Lacoste appealed to the Beijing No. 1 Intermediate Court who overruled the TRAB’s decision, and on this occasion, clarified the exact meaning of the term other harmful influence.

The Court mentioned that Article 28  of the Law provides that a rejection takes place“ Where a trademark application is not in conformity with the relevant provisions of this Law, or is identical with or similar with a trademark of another person…”, and explained that the term “not in conformity with the Law” refers to article 10 (signs that may not be used as a trademark), whereas the other part of the text “identical with or similar to…” refers to the presence of a prior trademark (applied or registered). The Court added that harmful influence only refers to the public interest and public order, and not to the existence of other private rights.

Wan Hui Da acted for Lacoste in this case.

Comment

In fact, the trademark owner is entitled to change the direction of its trademark device without altering the distinctive characters. The judgment constitutes a useful clarification of the meaning of harmful influence of article 10.8, which is, sometimes, abusively quoted ex officio as a systematic “back up” argument.