The Beijing Intellectual Property Court’s rejection of a deceptive trade mark application: ‘THE QIXIA APPLE BRANDY’

A deceptive sign is not eligible for trade mark registration. Such rule, in the Trade Mark Law of China (TMLC), is directly stipulated in Article 10.1 (7):

None of the following signs may be used as trade marks:

(…) (7) Those that are deceptive and are likely to mislead the public in terms of the quality, place of production or other characteristics of the goods;

How does this provision apply when the sign at issue is in a foreign language, e.g., English?

On the 20th of July 2022, the Beijing Intellectual Property (IP) court posted a case* addressing all this on its Case Bulletin webpage.

Case background

The disputed sign is ‘THE QIXIA APPLE BRANDY’ (filing no 52242572 in class 31 for brandy). The applicant is ‘Dragon Whisky (Qixia) Brewing Co.’ (‘DWB’), located in a village under the administration of Qixia, the Yantai City of Shandong Province in China. As a place specified by DWB’s location and the administrative region it belongs to, the latter two ‘Qixia’ are clear and represent the sole corresponding Chinese characters: 栖霞.

栖霞 is known as the Roof of Jiaodong Peninsula. With an ideal natural and climatic environment and over a hundred years of growing apples, ‘栖霞 apple’ is famous in China.

栖霞 is also a county-level city in Yantai. Yantai may be seen as even better known for cultivating apples - ‘Yantai Apple’ is listed in the EU-China Agreement on GIs.

Shelly: '🍎 ???'

On 17 December 2020, DWB filed a trade mark application for the disputed sign to the China National IP Administration (CNIPA), which was rejected on the basis of Article 10.1 (7) TMLC. 

DWB then filed a lawsuit to the Beijing IP Court to have CNIPA’s decision overturned. Both the first and second instance courts (the courts) upheld the CNIPA’s decision. 

The respective courts pointed out that ‘Qixia’ could be transcribed as '栖霞’. Following that possibility and after having carefully considered the sign’s overall meaning (‘THE QIXIA APPLE BRANDY’) as well as the brandy product the sign was designated to, the courts concluded that the public ‘with general cognitive ability would likely assume that the brandy product at issue contains ingredients or raw materials of ‘apple’ or ‘栖霞apple’. In this regard, however, DWB failed to provide relevant evidence, which led to the conviction of conveying false information as to the product’s quality and ingredients to consumers, as prohibited by Article 10.1 (7) TMLC. 

Comment

This case clearly demonstrates that whether a sign is deceptive must be assessed having regard to both the sign and the designated product. The mere possibility of misidentification rather than the actual deception suffices for applying Article 10.1 (7) of the TMLC. 

Furthermore, this Kat finds the English-Chinese language part of particular relevance to non-Chinese speaking readers. Each Chinese character is, roughly speaking, an image; each of them, by itself, has an individual meaning or several meanings. Different Chinese characters may share the same pronunciation (not considering the different tones in Chinese language). 

Therefore, the romanised expression ‘Qixia’ in the disputed sign has multiple corresponding Chinese characters and meanings. They could be, e.g., 旗下 (under a flag)，奇侠 (wonder swordsman), 七下 (seven times), 其下 (under it), 绮霞 (beautiful sunshine). Simply put, ‘Qixia’ does not uniquely refer to ‘栖霞’. 

This case demonstrates that the non-Chinese verbal elements in a sign also matter: using one that is phonetically identical to a deceptive Chinese expression will not avoid being caught and rejected from trade mark registration. 

Another point worth mentioning is that this case echoes the Beijing IP Court’s public conference dedicated to deceptive signs held in April 2021. As noted by judges from this Court, in the six years since the court’s establishment in 2014, they received more than 1,000 administrative cases involving deceptive trade marks. In the three years preceding 2021, that number had exceeded 350 cases yearly. The court upheld the CNIPA decisions in 81.3% of the cases, showing a consistent standard of review which led to stable and predictable outcomes regarding evaluating trade mark deception. 

Last but not least, the Beijing IP Court, as the first national IP case guidance research base designated by the Supreme People’s Court of China, has actively promoted IP protection on the Case Bulletin webpage, briefly introducing representative cases with explanations. This frequently updated source of cases could therefore be of much value to interested observers. 

*The case reference will be added here once it is published. 

Photo: Shelly, Tian's kitten