1. The Case

Ikeda Muhi (Muhi), a well-known Japanese pharmaceutical manufacturer, is highly reputable and influential in making mosquito bite prevention and other products. As early as 1994, Muhi registered a trademark for its Japanese kana "ムヒ", which was widely used in Japan. From 1986, Muhi began applying for registration of its trademarks in China, and it has so far registered nearly 700 trademarks. Muhi's products sell well in the Chinese market, and the products bearing the trademarks "ムヒ" and "ムヒべビ一" marketed in Japan have also entered China in large volume. These products, now available online and offline, are well received by consumers in China.

To promote and market its products in the Chinese-speaking regions, China included, Muhi specially named its liquid "ムヒ" trademark as "无比滴" (pronounced “wubidi” in Chinese), and began applying for the registration, in China from 2010, of trademarks, such as "MUHI" of Roman letters and "无比滴" of Chinese characters, which are corresponding to the "ムヒ" trademark, but its failure to registered the Japanese kana trademark "ムヒ" in China has caused the troubles encountered in the following case.

In 2016, the Guangzhou Mofantang Biotechnology Development Co., Ltd. (Guangzhou Mofantang), was transferred the trademark No. 13722463 "ムヒ" (the disputed trademark) registered in respect of goods of "human medicine, medical ointment, water preparation, medicinal wine, frostbite ointment, and antipruritic water" in class 5. Upon discovering this, Muhi requested to invalidate the disputed trademark of Guangzhou Mofantang, with a lot of evidence provided, and succeeded in invalidating it.

1. Determination

In the preceding invalidation case, the Chinese trademark examiners determined that registration of the disputed trademark constituted a case of "preemptive registration of a trademark that has been used by another party and has certain influence" under Article 32 of the Trademark Law for the following reasons:

1 A lot of evidence submitted by Muhi from such websites as the China Supplier Network and NetEase, and the Picture Book of Popular Medicines in Japan shows that before the application for registration of the disputed trademark, Muhi had used the trademarks "ムヒ" and "ムヒベビー" in respect of the Mosquito repellent and antipruritic medicinal products with certain reputation.

2. The disputed trademark is similar to Muhi's prior trademarks of "ムヒ" and "ムヒベビー". The human medicine and antipruritic water in respect of which the former was  used, and the Mosquito liquid and antipruritic lotion products in respect of which Muhi's trademarks "ムヒ" and "ムヒベビー" are actually used, are similar or closely related in terms of function, use, and sales channel.

3. The product packaging bearing the disputed trademark in actual use is basically the same as that of Muhi's products, and Guangzhou Mofantang also used the wordings of "Japan drops", "domestically authorized version", "domestically licensed", and "Muhi" in its advertising and publicity.

4. The registration and use of the disputed trademark is likely to mislead the relevant sector of the public into believing that the goods in respect of which the disputed trademark was approved for use are from, or were specifically associated with, Muhi, thus causing confusion and inflicting damage to Muhi, and impairing the commercial interests that Muhi should enjoy in the trademarks "ムヒ" and "ムヒベビー", which is damaging to the interests of the relevant sector of the public, and inconducive to maintaining the market and economic order of fair competition.

1. Factors of Determination

According to the Guidelines for Trademark Examination and Adjudication released by the China National Intellectual Property Administration (CNIPA) in 2021, where the disputed trademark applicant knows or has reason to know that another party's prior unregistered trademark exists, and preemptively registers it, he will be held using "unfair means". The determination is made considering the following factors on the basis of the relevant evidence in the examination practice:

1. Whether the disputed trademark applicant has ever had trade or any other cooperative relationship with the prior user, or has contacted and negotiated with the latter to reach said relationship;

2. Whether the disputed trademark applicant and the prior trademark user are located in the same region or in proximity, or are competitors in the same industry;

3. Whether the disputed trademark applicant had any other dispute with the prior user, and hence knows about the latter's trademark;

4. Whether the disputed trademark applicant and the prior user used to have any cross or mutual employee;

5. Whether the disputed trademark applicant is a relative of, or otherwise associated with, the prior trademark user;

6. Whether the disputed trademark applicant uses the goodwill and influence of the prior user's trademark that has certain influence to execute misleading publicity, or coerce the later to trade  with him, or demand high transfer fees, licensing fees or infringement damages from the prior user or any other party; and

7. The prior user’s trademark is strongly distinctive or highly popular, and the disputed trademark is identical or highly similar to it.

1. Implications

The preceding case study has three implications for Japanese businesses:

First, while the average Chinese cannot read the Japanese Kana and Japanese businesses seemingly do not need to register their Kana trademarks in China, they should apply to register them when registering their alphabetic and/or Kanji trademarks in cases like the above in China to prevent others from preemptively registering their Kana trademarks, especially those that have certain influence, to make misleading publicity and impair to their interests.

Second, pursuant to the International Classification of the Graphic Elements of Trademarks released by the Chinese trademark office in 2007, Chinese trademark examiners usually consider Japanese kana as graphic, rather than, word marks in their examination practice. In other words, when examining the subsequent "ムヒ" trademark filed by Guangzhou Mofantang in respect of the same or similar goods in class 5 as in the case studied above, the Chinese trademark examiners would not, and did not, regard Muhi's prior corresponding Roman alphabet "MUHI" and the Chinese characters "无比滴" as the same or similar to the Japanese Kana "ムヒ" trademark of Guangzhou Mofantang, and cited the former to reject the latter. Such a Japanese Kana trademark is likely to be registered, which would inflict damage, and cause risks to, the Japanese business.

Third, if a Japanese Kana trademark that is owned by a Japanese business, has been in use, and has had certain influence in China is preemptively registered by another person in respect of the same or similar goods or services, the Japanese business should try all means to provide the relevant evidence of the above standards to prove the "unfair means" of the squatter to stop the latter's improper acts of preemptive registration, prevent its or his trademark from being registered through the opposition procedure, or request to invalidate the latter's trademark if registered, so as to stop it or him from interfering in, or obstructing, its use of its own Japanese Kana trademark in marketing its products bearing the Japanese Kana trademark in the Chinese market, and avoid any legal risks if such squatters make counterclaim accusing the legitimate business of trademark infringement.