On 8 December 2016, China’s Supreme People’s Court ruled partially in favour of the USA basketball superstar Michael Jordan in a series of trade mark disputes against a Chinese sportswear enterprise Qiaodan Sports Co., Ltd. (“Qiaodan Sports”) regarding its use of Jordan's name in Chinese characters.
The Supreme Court overruled three previous rulings made by the Beijing High People’s Court concluding that the mark “乔丹” (the Chinese transliteration of Jordan) infringed Michael Jordan’s name rights, but confirmed that the phonetic transcription “Qiaodan” did not.
Following the ruling, Jordan issued a statement saying that “today’s decision ensures that my Chinese fans and all Chinese consumers know that Qiaodan Sports and its products have no connection to me.” He also stated “I respect the Chinese legal system and look forward to the Shanghai Court ruling on the separate name rights case.”
Qiaodan Sports also issued a statement following the ruling and claimed that among a number of cases brought by Michael Jordan, these three unfavourable rulings were not important to its business. They still owned several registered marks of “乔丹” and “Qiaodan” which had been upheld by China’s Supreme People’s Court.
In this article, we have highlighted some of the key legal issues that arose in these cases:
Five-year window for invalidation actions on the grounds of prior rights
Qiaodan Sports is still the owner of a number of “乔丹” marks in China because they have been registered for over five years. According to the relevant trade mark Law, where a registered trade mark infringes based on prior rights, the rights owner or an interested party may file an invalidation action within five years from the date of the trade mark registration. Michael Jordan was therefore only successful in those cases where the marks had been registered within that five year period when he initially lodged the disputes. Qiaodan Sports were, however, able to maintain other registrations that had been registered for over five years and where Michael Jordan was out of time. For any rights owners considering lodging invalidation actions against a mark registered in China, it is important to be aware that the action must be filed within 5 years of the date of registration of the disputed mark.
Prerequisite for protecting prior name rights
In this ruling, the Supreme Court gave guidance for the first time on the essential prerequisites for granting protection for prior rights based on the name rights, where 1) the specific name has acquired certain fame in China and is familiar to the relevant public; 2) the relevant public uses this specific name to refer to the individual rights owner; and 3) the specific name has established a stable correspondence with the individual rights owner.
In Michael Jordan’s case, the Supreme Court adopted the “stable correspondence” criteria instead of the “consistent one-to-one match” adopted by the Trade Mark Review and Adjudication Board (“TRAB”). The Supreme Court held that, according to the relevant law, the natural person enjoys the right to a name and the right to decide to change their name, but they cannot prohibit others who, in good faith, legally "decide" to have the same name. Because of this, it is hard to form one-to-one match correspondence. Further, the natural person can also have a professional name, pseudonym and other names. Sometimes, the public is more familiar with the other name of a natural person (such as his professional name, pseudonym name of the natural person, etc.) and the fame of the other names may be higher than its original name. If the TRAB requests proof for “only” correspondence as the prerequisite for protecting the name right, it means those who share the same name, but who also own another name, are unable to obtain protection, regardless of the popularity or relevant public awareness its name enjoys. Accordingly, the Supreme Court adopted the “stable correspondence” criteria in Michael Jordan’s case.
Another issue raised was whether a foreigner could get protection for the Chinese transliterations of his first name or surname, other than his full name. The court held that due to differences in language and culture, the relevant public in China usually uses Chinese transliteration of a foreigner’s surname or first name to refer to him instead of his/her full name, sometimes even unfamiliar with his/her full name. Therefore, to decide whether a foreigner can obtain the protection of the Chinese transliteration of his surname or first name, it is necessary to consider how the public recognizes the relevant foreigner. In Michael Jordan’s case, the evidence proved that the relevant public had already recognized Michael Jordan as the Chinese transliteration of Jordan only and thus protection could be given in his case. Nonetheless, there is no doubt that, to obtain a protection for the Chinese transliteration of a surname, the threshold of evidence required to establish the stable correspondence must be very high.
Acceptance of consumer surveys
Both Michael Jordan and Qiaodan Sports submitted consumer surveys in the dispute. The Supreme Court only accepted the survey reports submitted by Michael Jordan and considered that Qiaodan Sports failed to provide sufficient information about the process of the survey, question sheets or the questions asked to the consumers. It was therefore unclear how the information was gathered and how the conclusion was reached. As the authentication of such survey report was uncertain, the court refused to accept the survey report submitted by Qiaodan Sports.
The Supreme Court also provided reasoning as to why they had accepted the survey reports submitted by Michael Jordan. Firstly, the whole process of Michael Jordan’s survey had been notarized. It also provided details on respondent structure, survey method, sampling method and how the conclusion was formed. The technical note, questions sheets and the answer sheets were also attached to each survey report. The Supreme Court considered that the authentication of such survey reports and the weight of the evidence was relatively high and could be collaborated with the other evidence as filed. Both the TRAB and Qiaodan Sports had challenged survey reports but the Supreme Court rejected their objections. Together with the other evidence as filed by Michael Jordan, the Supreme Court concluded that it was sufficient to show that “乔丹” has been stably associated with Michael Jordan.
If there had been no evidence showing bad faith by Qiaodan Sports in its trade mark filings, Michael Jordan may not have been successful in these cases. The protection for the Chinese transliteration of a surname is still hard to obtain. The fame enjoyed by an individual who is seeking such protection must be extremely high to enable him/her to get his/her Chinese name protected under Chinese Law.
After the Supreme Court ruled that the use of “乔丹” infringed Michael Jordan’s name rights, Qiaodan Sports has been put into a very awkward position – it still owns several registrations of “乔丹”, while its use might be deemed as infringing Michael Jordan’s name rights. Whether Qiaodan Sports can continue using the mark “乔丹” and whether a royalty will be granted, will be decided by the Shanghai Court in which Michael Jordan has demanded 50 million RMB (approximately US$7.93 million) in compensation for the alleged infringement over his name right.
In the meantime, reports indicate that the IPO of Qiaodan Sports will probably be further suspended due to the ongoing litigation. The case also serves as a warning to businesses wishing to free-ride on other's reputation that it is getting harder and harder to do so in China, especially if there is a long term plan in place. The IP disputes will be a stumbling block on the road to success. For those celebrities whose names are also a brand, it would be advisable and necessary to seek trade mark protection for the corresponding transliteration if they wish to operate in the Chinese market. Otherwise, it could become an expensive problem when entering into this market.
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