The protection of a service mark

What is a service mark?

A ‘service mark’, relative to goods mark , refers to a kind of trade mark used to distinguish different service providers. A service mark under the PRC laws can be composed of word, device, number, three-dimensional sign, colour combinations, sound, etc., as well as a combination of any of the above elements. 

The service mark that is legally registered will be under the protection of laws. Therefore, a service mark should be distinctive and easily identifiable and meanwhile have no conflict with any prior legitimate rights of others.

Using a service mark

Before touching upon the protection of service mark, it is necessary to get to know how a service mark is to be used. Different from the goods mark that takes the goods as a carrier , the service mark is used to distinguish different service providers and has no physical carrier for use as a trade mark. 

In view of this, the service mark is used on the physical objects that materialize the relevant services, as a proof of the use as a service mark. As to the use of service marks, Article 7 of the “Opinions on Several Issues Concerning the Protection of Service Marks” promulgated by the Trademark Office on 30 March 1999 (having been repealed) provides that: the following circumstances under which a service mark is used shall be deemed as the use of service marks: 

1. service places; 
2. service signs; 
3. service tools; 
4. business cards, postcards, gifts and other service supplies bearing the service mark; 
5. account books, invoices, contracts and other business transaction documents bearing the service mark; 
6. advertisements and other promotional materials; 7. other items that are used not for providing services.

It should be noted that due to the complexity of the use of service marks, the situation of actual use should be considered in finding whether such use constitutes the use of service marks in specific cases. It does not mean that any of the above seven circumstances necessarily constitutes the use of service marks, nor will it be considered that any use other than the above seven circumstances does not constitute the use of service marks. When determining whether it constitutes the use of service marks, it is necessary to consider whether a user uses the mark to enable consumers or service recipients to distinguish the service provided by the user from the same services provided by others.

Given the complexity of the use of service marks, the actual use of service marks is more likely to conflict with other rights, for example, service mark and goods mark, service mark and service mark, service mark and business name, service mark and copyright, etc.

How does a service mark conflict with other rights?

Service mark and goods mark

Although service mark and goods mark may have the same or similar features and form of expression, they are completely different in terms of protected subject. 

The holder of trademark rights must legally use such mark on such goods/services as approved by the Trademark Office. Otherwise, it is very likely to infringe on the legitimate rights of others. 

This is the case in the lawsuit filed by Shanghai Hongqi Yonghe Catering Management Co., Ltd. against Nanjing Xinyonghe Snack Shop. 

Shanghai Hongqi Yonghe Catering Management Co., Ltd. is the exclusive licensee of trademark no. 4033258 “Yonghe Soymilk and device” registered for International Classification Class 43 services including “restaurants”, while Nanjing Xinyonghe Snack Shop registered trademark no. 23399219 “Xinyonghe” on International Classification Class 29 goods including “soymilk”. 

Shanghai Hongqi Yonghe Catering Management Co., Ltd. started litigation against Nanjing Xinyonghe Snack Shop on the ground that the latter used “Taiwan Xinyonghe Soymilk” on its store sign during the course of business, requesting the people’s court to rule that the use by Nanjing Xinyonghe Snack Shop constitutes trademark infringement. After the first-instance trial before the Zhangzhou Intermediate People’s Court in Fujian Province, the Fujian High People’s Court finally decided that: although Nanjing Xinyonghe Snack Shop registered upon approval the “Xinyonghe” mark on the goods including soymilk, its prominent use of “Taiwan Xinyonghe Soymilk” on the goods including soymilk constitutes non-standard use of a registered mark, and the logo used on the store sign is similar to trademark no. 4033258 “Yonghe Soymilk and device”; such use is objectively easy to cause confusion and misunderstanding among consumers, and thus constitutes trademark infringement.

Service mark and service mark

Conceptually, services are the activities that are intangible in nature but can bring some benefits through paid transfer. The scope of services is very broad. To facilitate trademark registration, the Nice Agreement divides services into eleven broad categories, but blurred on the boundary of each service category. This leads to conflicts between service mark and service mark in actual use. In the trademark infringement dispute between Zhongshan Cai Die Xuan Food Co., Ltd. and Anhui Cai Die Xuan Cake Group Co., Ltd., the scope of service played an important role in finding trademark infringement. In September 2012, Liang Huo, Chairman of Zhongshan Cai Die Xuan Food Co., Ltd., and Lu Yijian, General Manager of Zhongshan Cai Die Xuan Food Co., Ltd., filed a complaint with the Hefei Intermediate People’s Court, requesting the people’s court to rule that Anhui Cai Die Xuan Cake Group Co., Ltd. infringed on the exclusive right of Zhongshan Cai Die Xuan Food Co., Ltd. to use its registered trademark. The court found through investigation that: Liang Huo and Lu Yijian owned the registered mark “Cai Die Xuan” on International Classification Class 43 services including “restaurants; cafes”, while Anhui Cai Die Xuan Cake Group Co., Ltd. registered the “Cai Die Xuan” mark on International Classification Class 35 services including “marketing for others” and used the “Cai Die Xuan” mark on its storefronts, advertisements and products when doing business. The Hefei Intermediate People’s Court held that Anhui Cai Die Xuan Cake Group Co., Ltd. used “Cai Die Xuan” as a goods mark, which did not cause confusion and misunderstanding to the relevant public, and thus did not infringe on the plaintiff’s exclusive right to use the registered mark.

As a result, the plaintiff’s claims were dismissed in the first instance. The plaintiff dissatisfied with the first instance judgment and filed an appeal with the Anhui High People’s Court. The Anhui High People’s Court found in the second instance that the use by Anhui Cai Die Xuan Cake Group Co., Ltd. of the “Cai Die Xuan” mark on its store sign constitutes the fair use of its own registered mark (designated for Class 35 service “marketing for others”), which does not constitute trademark infringement, and thus dismissed the appeal and upheld the first instance judgment. The two plaintiffs dissatisfied with the second instance judgment and filed retrial with the Supreme People’s Court in accordance with the law. The Supreme People’s Court found during the retrial that: the “Cai Die Xuan” mark used by Anhui Cai Die Xuan Cake Group Co., Ltd. and the “Cai Die Xuan” mark registered by the two plaintiffs were identical in terms of word, pronunciation and meaning, but only different in font; the two marks were basically not different in appearance, and thus constitutes the identical trademarks. The use by Anhui Cai Die Xuan Cake Group Co., Ltd. of the “Cai Die Xuan” mark on its store sign is the use for bakery service, rather than marketing for others, and thus constitutes the similar service to Class 43 services including “restaurants; cafes” designated for the plaintiff’s “Cai Die Xuan” mark. In view of the above, the Supreme People’s Court finally ruled that the defendant’s use infringed on the plaintiff’s trademark right.

Service mark and business name

Trade mark and business name are both business logos. The former is used to distinguish different sources of goods or services, while the latter is mainly used to distinguish different market players. The two kinds of business logo were originally governed by different laws. With the continuous development of the market economy, the boundaries between trade mark and business name became blurring, and the conflicts between them were particularly prominent. In this regard, Article 1.1 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Trademark Civil Disputes (Fa Shi [2002] No. 32) explicitly provides that: where the prominent use of words that are identical or similar to other’s registered mark on the same or similar goods is likely to cause misunderstanding to the relevant public, such use shall constitute infringement of other’s exclusive right to use its registered mark under Article 57.7 of the PRC Trademark Law.

One typical case concerning the conflict between service mark and business name is the dispute over trademark infringement and unfair competition between Sichuan Renzhong Investment Management Co., Ltd. and Chengdu Xiaolongkan Brand Management Co., Ltd. before the Chengdu Intermediate People’s Court in 2017. Sichuan Renzhong Investment Management Co., Ltd. (hereinafter referred to as “Sichuan Renzhong”) filed a registration application with the Trademark Office of the PRC State Administration for Industry and Commerce for the “Xiaolongkan” mark on 19 October 2015. Trademark no. 18096479 “Xiaolongkan” was granted on 21 June 2017 and designated for Class 43 services. Following the registration of the above mark, Sichuan Renzhong invested lots of manpower, material resources and funds in the operation, publicity, and promotion of the “Xiaolongkan” hotpot brand that has gained huge market influence. Chengdu Xiaolongkan Brand Management Co., Ltd. (hereinafter referred to as “Xiaolongkan Brand”) was established on 31 October 2016, mainly engaged in the chain operation and management of the “Xiaolongkan” hotpot brand. Xiaolongkan Brand has been licensed by the holders of “Xiaolongkan Laohuo” and “Bashu Xiaolongkan” marks to use these marks. Xiaolongkan Brand used “Xiaolongkan” prominently on its website and Weibo for publicity and promotion, and also franchised and managed the “Xiaolongkan” chain brand across the country. Xiaolongkan Brand’s direct stores and franchised stores prominently used the logo containing “Xiaolongkan” during the course of business, and also registered and prominently used “Xiaolongkan” as a trade name in the business name. Sichuan Renzhong requested to order that Xiaolongkan Brand cease infringement and change the business name.

The Chengdu Intermediate People’s Court held that Xiaolongkan Brand as a hotpot restaurant operator registered its business name earlier than the date when Sichuan Renzhong was granted with the trademark rights involved, but later than the date when Sichuan Renzhong filed the trademark application. Moreover, the direct hotpot stores operated by Chengdu Xiaolongkan Catering Management Co., Ltd. (hereinafter referred to as “Xiaolongkan Catering”), an affiliate to Sichuan Renzhong, have gained a certain popularity. Therefore, Xiaolongkan Brand shall use its registered trade name during the course of business. In other words, Xiaolongkan Brand shall not use a certain element of its registered trade name prominently, which may cause confusion to the relevant consumers. In view of this, by repeatedly naming its services as “Xiaolongkan” under its Weibo account and using “Xiaolongkan” alone on the store signs and interior decoration of its stores, Xiaolongkan Brand has the intent of prominent use, which is likely to cause confusion to consumer, and thus constitutes trademark infringement.

Service mark and copyright

Trademark right and copyright are both intellectual property rights, but they are governed by different laws. The subjects for protection are not the same. Therefore, trademark right and copyright are not equivalent. However, the conflicts between them abounds one after another. The basic principle for the people’s courts, market supervision administrations and copyright administrative agencies to follow in dealing with such conflicts is to protect the prior rights. This principle was perfectly reflected in the lawsuit brought by Chen Biao in 2019 before the Ankang Intermediate People’s Court in Shaanxi Province against Jixinling Company in respect of copyright infringement dispute. Chen Biao, the plaintiff, created and published the “logo to be used in the events celebrating the 2015 Rooster New Year” in 2005. The logo was composed of “rooster device”, “HAPPY NEW YEAR 2005” and “7981 design consultant logo” that were arranged vertically. Jixinling Company filed applications on 7 February 2012 and 25 October 2016, respectively, for registration of the mark composed of “Jixinling Tourism Development Co., Ltd.”, “Jixinling” and “rooster device” on International Goods Classification Classes 32 and 29 and International Service Classification Class 39. Jixinling Company also used the mark in the information published on Shunqi.com. Chen Biao started litigation on the ground that his copyright was infringed on by Jixinling Company’s unauthorized registration of his artworks as a trade mark.

The Ankang Intermediate People’s Court in Shaanxi Province found after investigation that: Chen Biao created and published the logo to be used in the events celebrating the 2005 Rooster New Year” in 2005; the artworks were original and shall be protected under the Copyright Law; on 7 February 2012, Jixinling Company filed the registration application for a combined mark containing rooster device; the rooster device in the mark registered by Jixinling Company and the rooster device in Chen Biao’s artworks are not substantially different by comparison. Accordingly, the court decides that Jixinling Company infringed on Chen Biao’s copyright by filing applications without authorization for registration of Chen Biao’s artworks as trade mark and using such marks on the Internet. Therefore, Jixinling Company was ordered to cease infringement and compensate Chen Biao for the economic losses of 20,000 yuan.

Considerations

In addition to the above factors, the nature of territorial should be considered for the protection of service marks. Although the trade mark is valid throughout the country, but the use of a service mark is restricted by geographical conditions, environment, customs, etc., and the commercial value and influence of a service mark is likely to be limited within a certain area. 
Therefore, when determining whether certain conducts constitute infringement, comprehensive consideration should be given to the distinctiveness and influence of the mark. It is also important to consider whether the infringer maliciously plagiarizes others’ service marks or approach others’ well-known service marks, with the intent to cause confusion and misunderstanding among consumers.