Enterprise names and trademarks are both distinctive identifiers in the commercial sphere and important carriers of business reputation. Both can be presented in written form, and many market entities use identical wording for their enterprise name (trade name) and trademark. Consequently, conflicts between enterprise name rights and trademark rights frequently arise in practice. This article discusses conflicts and handling of enterprise name rights and trademark rights in practice, so as to position complaint types more precisely in administrative complaints involving enterprise names.
An enterprise name is the name lawfully obtained by an enterprise; it is the identifying designation that distinguishes a company from other economic actors when it engages in business activities, and it is the sole specific appellation used by the company when conducting business. In essence, an enterprise name is a commercial identifier and, in terms of distinctiveness, has the same function as a trademark. Enterprise names and trademarks are both distinctive identifiers in the commercial field and important carriers of corporate reputation; both can be presented in written form, and many market entities use identical wording for their enterprise name (trade name) and trademark.
I. Differences Between Enterprise Name Rights and Trademark Rights
1. Different characteristics of the rights
An enterprise’s right to its name falls within the scope of personality rights under general civil rights and corresponds to a natural person’s right to a name. Because the right to an enterprise name belongs to the category of personality rights and always accompanies a specific enterprise, it has the following characteristics:
First, the right to an enterprise name is a basic civil right that must be lawfully obtained upon the enterprise’s establishment; in other words, it is both statutory and mandatory for an enterprise to obtain the right to a name in accordance with the law.
Second, each enterprise may lawfully register and use only one name; that is, any enterprise may lawfully enjoy the exclusive right to only one name.
Third, due to the personal nature of the right to an enterprise name, the period of validity of the right to a name “begins with the establishment of the enterprise and ends with its termination,” that is, it “shares the same life and fate” as the specific enterprise.
Fourth, an enterprise may not simultaneously license the name it uses to others. In other words, within the same region, one name cannot be used concurrently by two or more enterprises.
Trademark rights are also civil rights, but they are not personality rights; they are intellectual property rights. Therefore, trademark rights have characteristics different from name rights.
First, after an enterprise is established in accordance with the law, it generally has the right to decide, according to its own business activities and market competition needs, whether to register a trademark in accordance with the law. That is, whether an enterprise registers a trademark and thereby enjoys trademark rights is optional (except where registration is mandated by the state).
Second, an enterprise may lawfully apply for multiple registered trademarks and thereby hold the exclusive right to multiple registered trademarks.
Third, as a trademark owner, an enterprise may lawfully license others to use its registered trademarks, and it may also assign its registered trademarks to others.
Fourth, trademark rights have a clear term of validity, namely ten years. Upon the expiration of ten years, renewal may be effected in accordance with the law; each renewal extends the term by ten years, and there is no limit on the number of renewals.
2. Different methods of acquisition and different scopes of the rights
Both enterprise name rights and trademark rights must be obtained through lawful registration. Trademark rights are obtained by applying for registration to the China National Intellectual Property Administration (CNIPA) in accordance with the law. Enterprise name rights are obtained by applying for registration to market regulation authorities at different levels at or above the county level in accordance with the law. In other words, trademarks are registered uniformly by CNIPA; enterprise names are registered in a graded manner by national or local market regulation authorities depending on the nature and scale of the enterprise.
Because of these differences in the methods of acquiring enterprise name rights and trademark rights, the corresponding scope of rights also differs. The right to a name enjoyed by the subject of the right is valid or protected only within the administrative region under the jurisdiction of the registration authority for the name. On this point, Article 3 of the Regulations on the Administration of Enterprise Name Registration explicitly provides: “When an enterprise applies for registration, the registration authority in charge of enterprise names shall examine and determine the enterprise name. The enterprise name may be used only after registration is examined and approved, and the exclusive right shall be enjoyed within the prescribed scope.”
Therefore, different enterprises have different registration authorities for their names, and the scope of rights differs accordingly. For example, an enterprise name right registered in accordance with the law by the State Administration for Market Regulation enjoys exclusivity nationwide within the same industry; an enterprise name registered in accordance with the law by a county-level market regulation department enjoys exclusivity only within that county. Trademark registration is implemented on a unified national basis; therefore, whether an enterprise is national or local, the scope of effectiveness of its lawfully obtained trademark right is the same—it is effective nationwide.
II. Types of Conflicts Between Enterprise Name Rights and Trademark Rights
In determining whether a conflict exists between trademark rights and enterprise name rights, the criterion is generally whether confusion exists or is likely to exist.
According to Article 10 of the Opinions of the Supreme People’s Court on Several Issues Concerning IP Adjudication in Light of the Current Economic Situation, “Where an enterprise name, due to prominent use, infringes the exclusive right to a prior registered trademark, it shall be handled as trademark infringement in accordance with the law; where the enterprise name is not prominently used but its use causes market confusion and violates fair competition, it shall be handled as unfair competition in accordance with the law.” In practice, conflicts between enterprise name rights and trademark rights can be divided into two types:
1. Prominent use of the trade name (字号) in an enterprise name constitutes infringement of the exclusive right to a registered trademark
Article 1(1) of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes over Trademarks provides that prominently using wording identical or similar to another’s registered trademark as the enterprise’s trade name on identical or similar goods, which easily causes the relevant public to be misled, constitutes conduct that damages the exclusive right to another’s registered trademark.
The reason why a right holder’s prominent or non-standard use of its lawfully registered enterprise name constitutes trademark infringement is that, at this point, the use of the enterprise name meets the definition of “use” under the Trademark Law and thereby has the identifying and distinguishing function in the sense of trademark law. That is, the enterprise name is no longer being used as an enterprise name but is being used as a trademark. The salient feature of this type of infringement case is that the trade name, or its abbreviation or short form, is prominently used on goods, product packaging or containers, and transaction documents for goods, or in advertising, exhibitions, and other commercial activities.
2. Non-prominent use of the trade name in an enterprise name constitutes unfair competition
Article 58 of the Trademark Law provides: “Using another’s registered trademark or an unregistered well-known trademark as the trade name in an enterprise name, thereby misleading the public, constitutes an act of unfair competition, which shall be handled in accordance with the Anti-Unfair Competition Law of the People’s Republic of China.” Where the enterprise name is not prominently used, yet its use causes consumers to become confused or misled and violates fair competition, it constitutes unfair competition.
Article 11 of the Interpretation on Several Issues Concerning the Application of the Anti-Unfair Competition Law provides: “Where a business operator, without authorization, uses an identifier identical or similar to another’s enterprise name with a certain market influence (including abbreviations and trade names), name of a social organization (including abbreviations), personal name (including pen name, stage name, translated name, etc.), core part of a domain name, website name, webpage, etc., thereby causing the public to mistakenly believe that the goods are those of another or that there is a specific connection with another, and a party claims that the situation falls under Items (2) or (3) of Article 6 of the Anti-Unfair Competition Law, the people’s court shall support such a claim.” Article 12 provides: “When determining whether an identifier that has a ‘certain market influence’ under Article 6 of the Anti-Unfair Competition Law is identical or similar, the people’s court may refer to the principles and methods for determining identical or similar trademarks.”
As for the principles and methods for determining identical or similar trademarks, Article 10 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes over Trademarks provides: “When determining whether a trademark is identical or similar under Items (1) and (2) of Article 57 of the Trademark Law, the people’s court shall proceed according to the following principles: (1) the standard shall be the ordinary attention of the relevant public; (2) both an overall comparison of the marks and a comparison of their main distinctive parts shall be conducted, and the comparisons shall be carried out separately with the objects of comparison kept isolated; and (3) when determining whether trademarks are similar, the distinctiveness and reputation of the registered trademark for which protection is sought shall be taken into account.”