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MICHAEL JEFFREY JORDAN V. TRADEMARK REVIEW AND ADJUDICATION BOARD AND QIAODAN SPORTS CO., LTD. (2016) ZGFXZ No. 27, SPC

Cause of action: Administrative dispute over a trademark

Collegial panel members: Tao Kaiyuan | Wang Chuang | Xia Junli | Wang Yanfang | Du Weike

Keywords: dispute procedure, existing prior right, fair competition, good faith, right in a personal name, specific name, trademark, use in bad faith

Relevant legal provisions: Tort Law of the People’s Republic of China, articles 2 and 20; Trademark Law of the People’s Republic of China (as amended in 2001), article 31; General Principles of the Civil Law of the People’s Republic of China, articles 4 and 99

Basic facts: In the retrial of an administrative dispute over a trademark between the appellant, Michael Jeffrey Jordan (hereinafter “Michael Jordan”), and the respondent, the Trademark Review and Adjudication Board, State Administration for Industry & Commerce of the People’s Republic of China (hereinafter “TRAB”), and the third party from the first-instance case, QIAODAN Sports Co., Ltd. (hereinafter “QIAODAN Company”), the trademark “乔丹” (pronounced Qiao Dan), Trademark No. 6020569 (hereinafter “the disputed trademark”), was filed by QIAODAN Company on April 26, 2007, and was approved for use for sports equipment, swimming pools (for entertainment), roller skates and Christmas tree decorations (except lighting and confectionery) under Class 28 of the International Classification of Goods and Services for the Purposes of the Registration of Marks (hereinafter the “Nice Classification”); the validity period of the exclusive right was March 28, 2012, to March 27, 2022. On October 31, 2012, Michael Jordan filed a cancellation request on the grounds that the registration of the disputed trademark infringed his existing prior right in his personal name. On April 14, 2014, the TRAB issued its Decision on No. 6020569 “乔丹” Trademark Dispute [2014] SP ZI No. 052058 (hereinafter “Decision No. 052058”) and maintained the registration of the disputed trademark. Michael Jordan subsequently filed an administrative lawsuit.

The Beijing No. 1 Intermediate People’s Court (the court of first instance) held that the evidence in this case was insufficient to prove that the name 乔丹 alone was clearly identified with Michael Jordan. In addition, the products designated by the disputed trademark were quite distinct from the field of basketball in which Michael Jordan bore influence. It was not easy for the relevant public to associate the disputed trademark with Michael Jordan. The existing evidence was insufficient to prove that the registration and use of the disputed trademark improperly drew on Michael Jordan’s popularity or could have other effects on Michael Jordan’s right in his personal name. The registration of the disputed trademark did not infringe Michael Jordan’s right in his personal name. The court of first instance therefore affirmed Decision No. 052058.

Unconvinced, Michael Jordan lodged an appeal with the Beijing Higher People’s Court, which dismissed the appeal and affirmed the original judgment.

Still unconvinced, Michael Jordan appealed to the Supreme People’s Court and the Supreme People’s Court ruled that the case should be reviewed.

Held: On December 8, 2016, the Supreme People’s Court issued its administrative judgment, in which it stipulated that the TRAB’s decision and the judgments of the lower courts were overturned, and ordered the TRAB to review the case and issue a new decision.

Reasoning: The Supreme People’s Court held that the issue in this case was whether registration of the disputed trademark infringed the appellant’s right in his personal name and thereby violated article 31 of the Trademark Law, which provides that “no applicant for trademark application may infringe upon another person’s existing prior rights”.

The issues, in this case, were divided among eight specific questions, as follows.

I. What are the legal grounds on which the appellant claims protection of a right in the name? II. What is the specific content of the name over which the appellant asserts a right to protection?

III. What is the degree and scope of the appellant’s popularity in China?

IV. Did the appellant and Nike Company (as authorized by him) actively use the name 乔丹, and what effect did the fact of active use have on the right that the appellant claims in this case?

V. Does the specific context of the disputed trademark lead the relevant public to mistakenly associate the disputed trademark with the appellant?

VI. Did QIAODAN Company act in bad faith in registering the disputed trademark?

VII. What has been the impact of QIAODAN Company’s business status and its efforts in promoting, using, winning awards and protecting its own name and related trademark?

VIII. Was there unreasonable delay on the part of the appellant in asserting protection of his right in his name and what impact does that delay have on the present case?

In answering these eight specific questions, the Supreme People’s Court respectively held as follows.

I. Legal grounds on which the appellant claims a right in the name

Article 31 of the Trademark Law provides that “no applicant for trademark application may infringe upon another person’s existing prior rights”. Therefore existing prior rights specifically defined under the Trademark Law shall be protected in accordance with its special provisions. Civil rights or interests that are not specified in the Trademark Law, but which were legally accorded to civil entities prior to the application date of the disputed trademark, shall be protected in accordance with the provisions of the General Principles of the Civil Law, the Tort Law and other laws. Such general provisions shall apply to such civil rights and interests.

Article 99(1) of the General Principles of Civil Law of the People’s Republic of China and article 2(2) of the Tort Law of the People’s Republic of China stipulate that natural persons enjoy a right in their personal name in accordance with the law. Such a right may therefore constitute an “existing prior right”, as defined in article 31 of the Trademark Law. Where the registration of a disputed trademark infringes another person’s existing prior right to their personal name, that trademark shall be deemed to violate the provisions of article 31.

Names are used to refer to, address and distinguish between specific natural persons. Name rights are important personal rights enjoyed by natural persons. With the continuous development of China’s socialist market economy, it has become increasingly common for natural persons with a certain level of popularity to commercialize their names, and to obtain economic benefits under contracts to endorse specific goods and services. When article 31 of the Trademark Law is applied to protect the existing prior right in a personal name, it protects not only the personal dignity of the natural person, but also the economic interests of the natural person in their name – especially the name of a celebrity. Where the name of a person with a existing prior right to that name is registered as a trademark without their permission and hence misleads the relevant public to believe that the goods or services bearing the trademark have specific connections with that natural person, such as that person’s endorsement or authorization, the registration of such trademark shall be deemed to have infringed that person’s existing prior right to their name and to have violated the provisions of article 31.

II. Specific content of the name over which the appellant asserts a right to protection

When a natural person claims a right in a specific personal name under article 31 of the Trademark Law, they must satisfy three conditions:

(a) the specific name must have a certain degree of popularity in China and be known to the relevant public;

(b) the relevant public must use the specific name to refer to the natural person; and

(c) a stable connection must have been established between the specific name and the natural person.

In relation to the first and second conditions – the specific name should have certain popularity and be known to the relevant public, and should be used to refer to the natural person – article 6(2) of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Unfair Competition defines as unfair competition those acts that “use the name of another person without permission and mislead the relevant public”. Such acts are closely related to the registration of a disputed trademark that is likely to mislead the relevant public and hence, in this case, the provisions of the Interpretation can be applied, mutatis mutandis, to establish the conditions under which a natural person’s right in their personal name will be protected.

In relation to the third condition – that a stable connection must have been established between the specific name and the natural person – in resolving the conflict involved in this case between the existing prior right in the personal name and the rights in a registered trademark, the standard of protection for the existing prior right shall be reasonably determined, and the interests of the holder of the existing prior right to the personal name and the interests of the trademark owner shall be balanced. On the one hand, registration of the disputed trademark shall not be deemed to sabotage the right of a natural person in their name just because the disputed trademark uses or incorporates that person’s name if it is known only to a limited circle of people or if is used only occasionally. On the other hand, rigorous standards shall not be imposed on a natural person asserting such a right, as was the case when the TRAB held that there must be one and only one connection between the name and any natural person for that natural person to claim protection of a right in their name. When a specific name claimed by a natural person has established a stable connection with that natural person, even if the relationship between the person and that name is not “unique”, that person’s right in their name can be protected in law.

When judging whether a foreigner can claim a right in the Chinese translation of their name, it is necessary to consider the relevant public’s common use of such names in China. If the translated name meets the three conditions under article 31 of the Trademark Law, it may be granted protection accordingly. The existing evidence in this case is sufficient to prove that the name 乔丹 has high reputation in China and is known to the relevant public. The relevant public in China usually refers to the appellant as 乔丹, and a stable connection has been established between the name 乔丹 and the appellant; hence the appellant can claim a right in the translated name 乔丹.

III. Degree and scope of the appellant’s popularity in China

Correctly ascertaining the degree and scope of the appellant’s popularity in China will have a significant impact on specific issues such as whether the appellant enjoys a right in the name 乔 丹, whether QIAODAN Company may have registered the disputed trademark in bad faith and whether the relevant public is likely to mistakenly assume that the products marked with the disputed trademark are connected with the appellant.

The evidence in this case proves that, before the filing date of the disputed trademark and through to 2015, the appellant had always had a high reputation in China and that the scope of his popularity was not limited to the field of basketball; rather, he had become a highly popular public figure.

IV. Whether the appellant and Nike Company (as authorized by the appellant) actively used the name 乔丹, and what is the impact of that use on the right now claimed

First, according to the provisions of article 99(1) of the General Principles of the Civil Law of the People’s Republic of China, the right to use a name is not an obligation, but one among a bundle of rights enjoyed by holders of the right in a personal name – and it is by no means a legal precondition imposed upon the holder of that right when applying to prohibit “interference with, usurpation of and false representation of the name” or to assert protection of the name.

Secondly, in applying article 31 of the Trademark Law to the protection of existing prior rights, whether the relevant public mistakenly believes that the goods or services marked with the disputed trademark have a specific connection with the natural person, such as their endorsement or authorization, is an important factor in ascertaining whether or not the natural person’s right in their name has been infringed. Where the three conditions under article 31 are satisfied, therefore, the natural person is entitled to protection of their right in a specific name even if they do not actively use that name.

Finally, for foreigners who have a certain level of popularity in China, it is possible that they or interested parties may not actively use their names in China or that, for reasons of greeting, linguistic habits or cultural differences, the “name” familiar to the relevant public and news media in China is not exactly the same as the name that the right holder actively uses. For example, in this case, the relevant public and news media in China generally refer to the appellant as 乔丹, whereas Michael Jordan and Nike Company mainly use 迈克尔·乔 丹. However, both 迈克尔·乔丹 and 乔丹 have high popularity among the relevant public, which generally uses either to refer to the appellant, to which use the appellant has no objection. The claim of the TRAB and QIAODAN Company that the appellant and Nike Company do not actively use 乔丹 and that the appellant is not entitled to enjoy a right in the name 乔丹 is therefore not persuasive.

V. Whether the specific context of the disputed trademark leads the relevant public to mistakenly associate the disputed trademark with the appellant

Trademark No. 6020569 “乔丹”, the disputed trademark in this case, is designated for “sports equipment, swimming pool (entertainment), roller skates, Christmas tree decorations with the exception of lighting and confectionary” under Class 28 of the Nice Classification. Among them, “sports equipment, swimming pool (entertainment), roller skates” are common commodities in sports, while “Christmas tree decorations with the exception of lighting and confectionary” are common commodities in daily life. Consumers of these commodities are likely to mistakenly believe that the products marked with the disputed trademark have specific connections with the appellant, such as that he has endorsed or approved them, for the following specific reasons.

First, the evidence in this case is sufficient to prove that the appellant and the name 乔丹 have enjoyed long-term and extensive popularity in China, and that the relevant public is familiar with and generally uses the name 乔丹 to refer to the appellant. A stable connection has been established between 乔丹 and the appellant. Since the disputed trademark comprises only the Chinese characters 乔丹, it will be easy for the relevant public to associate it with the appellant and even to mistakenly believe that products marked with the disputed trademark have specific connections with the appellant.

Secondly, QIAODAN Company specifically issued the following statement in its prospectus, under the heading “Brand risk”: “Investors are specially reminded that ‘some consumers may associate the issuer and its products with Michael Jordan, which may create a misunderstanding or confusion’.” This indicates that QIAODAN Company was aware that the relevant public would be likely to mistakenly associate QIAODAN with the appellant and that its trademark would thereby cause confusion. In the record of the case at first instance, QIAODAN Company also acknowledged that “there is a possibility that the public who has not purchased our products may be misled”.

Finally, the two market research reports put forward as part of the evidence in this case further prove that the relevant public is likely to mistakenly assume that the name 乔丹 has specific connections with the appellant.

VI. Whether QIAODAN Company registered the disputed trademark in bad faith

In this case, whether QIAODAN Company registered the disputed trademark in obvious bad faith is an important factor to consider in determining whether the trademark infringes the appellant’s right in his personal name. The evidence in this case is sufficient to prove that QIAODAN Company was fully aware of the appellant’s popularity and that of his name 乔丹. Instead of consulting and negotiating with the appellant to obtain his permission or authorization to use the name, QIAODAN Company willfully registered a large number of trademarks closely related to the appellant’s name, including the disputed trademark, and misled the relevant public to believe that the products so marked had a specific connection with the appellant. In this way, QIAODAN Company achieved the effect of the appellant’s “endorsement” without incurring the relevant costs. QIAODAN Company’s action violates the principle of good faith stipulated under article 4 of the General Principles of Civil Law of the People’s Republic of China, and it exhibited obvious subjective malice during the registration of the disputed trademark and related trademarks.

VII. Impact of QIAODAN Company’s business status and its efforts in promoting, using, winning awards and protecting its own name and related trademark

QIAODAN Company’s business status and its efforts in promoting, using, winning awards and protecting its own trade name and related trademarks are not sufficient to render registration of the disputed trademark legal.

First, from the perspective of the nature of the right, as well as the actus reus involved in sabotaging the existing prior right, a name is used to refer to, address and distinguish a specific natural person, and it therefore constitutes a natural person’s personal right, whereas a trademark is used for distinguishing the source of goods or services and hence constitutes a kind of property right that is substantially different from the right in a personal name. To ascertain whether registration of the disputed trademark infringes another person’s existing prior right in a name, it is critical to determine whether the relevant public has been misled to think that the goods or services marked with the disputed trademark have specific connections, such as endorsement or authorization, with the holder of the existing prior right in the name. In this regard, the actus reus is different from that of trademark infringement and therefore, even though QIAODAN Company and its “乔丹” trademark have gained a high popularity in specific product categories after years of operation, marketing and use, and even though the relevant public can recognize that products marked with “乔 丹” are from QIAODAN Company, these factors are not sufficient to prove that the relevant public will not easily be misled into thinking that there is a specific connection between the products marked with “乔丹” and Michael Jordan.

Secondly, since QIAODAN Company registered the disputed trademark in bad faith, obviously contradicting the principle of good faith operation and infringing Michael Jordan’s existing prior right in his name, the market position or commercial success put forward as evidence by the TRAB and QIAODAN Company was not a legitimate outcome of QIAODAN Company’s business, being, to some extent, derived from its confusion of the relevant public. Maintaining such a market position or commercial success on this basis is detrimental not only to the protection of a natural person’s legitimate rights in their name, but also to the safeguarding of consumers’ interests and to the maintenance of a sound environment for the registration and use of trademarks.

VIII. Whether there was unreasonable delay on the part of the appellant in asserting protection of his name right and what impact that delay might have on the present case

Article 41(2) of the Trademark Law stipulates that, “[w]here a registered trademark is in violation of … article 31, the holder … may, within five years upon the registration of the trademark, request the Trademark Review and Adjudication Board to declare the registered trademark invalid”. The five-year period stipulated is therefore the statutory time limit within which a complainant must ask the TRAB to invalidate a disputed trademark.

The legislators fully considered the balance of interests between existing prior right holders and trademark owners when stipulating these time limits. The statutory time limits may urge the right holder or the interested party to claim rights promptly according to law, so as to avoid the legal validity of a disputed trademark remaining contentious long after its registration. Such contention will hinder the trademark owners in promoting and using the disputed trademark, as well as impair the legitimate interests of the holder of a prior existing right.

In this case, the appellant filed with the TRAB an application for revocation of the disputed trademark within five years of the date of its registration, in accordance with the provisions under article 41(2). The claim of the TRAB and QIAODAN Company that the appellant has been negligent in protecting his right therefore has no basis in fact or law, and is not supported.