Business name decisions are clearer, but more guidelines are needed

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OWhen a company believes that another has violated the principle of good faith by registering a name similar to its own, thus infringing its legitimate rights and interests, it may submit the dispute to the administrative authority for decision.

Although the Business Name Registration Administration Provisions, revised in 2012, provided for the handling of disputes over business names, they mainly regulated the use of business names without specifying procedures. administrative.

Another revision in 2020 clarified for the first time that if a business believes that other registered names infringe its legitimate rights and interests, it can take legal action or ask the business registration authority to manage the dispute.

CASE CONTEXT

Mi Tai
Associated
Wan Rui Law Firm

Company A is the Chinese headquarters of a global electronics manufacturer. The manufacturer started doing business in China in the early 1970s and invested in a number of companies, including Company A, in mainland China in the early 1990s. All of these companies have the same brand name, which enjoys a distinct reputation in China. Company A’s brand name has no literary meaning in Chinese language, and the registered trademark with the same characters has been officially recognized as a well-known trademark. Companies B and C, established in 2005 and 2006 respectively, had the exact same brand name in their corporate name as Company A. Their registered scope of business was also largely identical to that of Company A.

Company A believed that the business names registered by Companies B and C infringed its legitimate rights and interests and urged us to file a request for administrative arbitration with the business registration authorities of Companies B and C, respectively.

NATURE OF ARBITRATION

In this case, Companies B and C claimed that the original registration authority had approved their business names, that their registration was legal and compliant, and therefore they should not be required to change it. Under the company name pre-approval system, such a defense has been accepted by some administrative authorities.

According to the provisions, a business name must not be identical or similar to the business name registered in the same sector in the jurisdiction of the registration authority. After comparing the corporate names of Companies B and C with corporate names registered in the same industry under its jurisdiction, the registration authorities approved the registration of their corporate names.

This was an administrative licensing process, which took place between the registration authority and the two companies.

However, the dispute arose between company A on the one hand, and companies B and C on the other hand. Companies B and C registered the same trademark and exploited similar products, infringing the prior corporate name right enjoyed by company A. Company A seized the administrative authority to settle the dispute, the legal decision of which would be a decision administrative, and thus different from the administrative license.

As the Suzhou Intermediate People’s Court pointed out in Jiangsu Red Ant Design Decoration Engineering v Kunshan Market Supervision Management Bureau (2018) administrative judgement, “Business name dispute resolution is different from the business name registration application system. It has different system functions and value directions, focusing on correcting inappropriate business names and protecting the civil rights and interests of the prior right holder. This difference in nature is particularly evident under the current corporate name application and commitment system.

UNFAIR COMPETITION

In the event of registration of brand names of other companies and confusion, as specified in Article 6 of the Anti-Unfair Competition Law (AUCL), how can the right holder link the dispute relating to the name of company to the administrative complaint procedure for unfair competition?

Article 21 of the provisions provides that “if a business believes that other business names are infringing the legitimate rights and interests of its own name, it may take legal action or request the registration authority to companies which registered the alleged infringer to resolve the problem”. Article 22 provides that “when an enterprise name is used to engage in unfair competition, it shall be dealt with in accordance with relevant laws and administrative regulations”. Thus, Section 21 resolves disputes regarding violation of prior rights and interests of others in the registration of corporate names, while disputes arising from the use of corporate names are resolved under the AUCL as provided for in section 22.

The practical implications of these regulations are: (1) the choice of administrative authorities. Currently, the Office of Administrative Examination and Licensing Services is responsible for handling disputes over business names in certain areas, and the Market Regulation Administration is generally responsible for competition complaints. unfair; (2) choice of procedure.

The aforementioned regulations should provide a legal basis for the decisions of the administrative authorities. However, to protect the rights, all the procedures mentioned may require the infringer to change the name of the company. For example, if the infringer registers and uses the name, claims can be made simultaneously under Section 21 of the provisions and the AUCL. If the Infringer merely registers but does not use the Name, or does not use the Name unlawfully as provided in the AUCL, when making a claim under Section 21 of the Provisions, the Licensee law must elaborate on the possibility of confusion, such as the popularity of the previous brand name, competition within the same industry and the subjective situation of the infringer. The cases of company A fell into this category and led companies B and C to change their names.

GRADUAL IMPROVEMENT

The provisions set out the administrative procedure for resolving business name disputes, but accompanying rules are still needed to ensure their smooth implementation and further improve the business name relief mechanism and measures. The State Administration for Market Regulation released the Interim Measures for Resolving Business Name Disputes (draft for comments) in February 2021, but the official version has not yet been promulgated. In addition, relevant regulations can be formulated against registered corporate names that manifestly “benefit from well-known brands” for administrative authorities to treat them uniformly and consistently.

Wan Rui Law Firm is a member of Sanyou IP Group

Mi Tai Wan Rui Law Firm intellectual propertySanyou Intellectual Property Agency
16/F, block A, corporate square
No.35 Jinrong Street, Beijing 100033, China
Tel: +86 10 8809 1921 / 8809 1922
Fax: +86 10 8809 1920
Email: [email protected]

www.sanyouip.com

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