The Decision

The Grand Chamber of the Supreme Administrative Court ruled in March 2023 that famous trademarks that are subject to dilution requirements do not need to be widely known to ordinary consumers.

When examining whether there is a risk of dilution for a well-known trademark, it should give consideration to the degree of the famous, the degree of similarity of the trademark, and the extent to which the trademark is widely used for other goods/services, the degree of inherent or acquired distinctiveness for famous trademark and other considerations, such as whether the owner of the disputed trademark has the intention to make people associate its trademark with the famous trademark.

With regard to the dilution protection of famous trademarks, the requirements for “the degree of famous trademarks” are higher than those for confusion protection. It should be determined in the requirement “the risk of dilution” rather than the requirement “well-known trademark.”

The Comment of Chingi Lu:

1. Regarding dilution protection, how degree should a well-known trademark have? There have been endless debates since the Trademark Law added dilution protection in 2003.

2. The Supreme Administrative Court's First Joint Meeting held in November 2005 that only the mark widely known to ordinary consumers can be adapted the dilution protection. Thus, dilution protection cannot be adopted if the mark is only known to relevant consumers. Since then, most judgments in practice have taken this resolution as the standard for determination. The decision ruled by this Grand Chamber reversed this holding.

3. However, is the Grand Chamber relaxing requirement of the dilution protection? Whether as long as it reaches a well-known trademark known to the relevant consumers, dilution protection can always be applied.

Not exactly.

The ruling of the Grand Court this time only shifted the consideration of “the degree of famous trademarks” from the requirement of “well-known trademark" to which “the risk of dilution”.

Even if a mark fulfills the requirement “well-known trademark", which is known to relevant consumers is sufficient, it is not sure whether it can meet the second requirement of " the risk of dilution ".

Because the connotation of " the risk of dilution " also includes the need to consider: the degree of famous trademarks, the degree of similarity of trademarks, the extent to which trademarks are widely used for other goods/services, and the degree of inherent or acquired distinctiveness and other factors such as whether the disputed trademark owner has the intention to make people associate his trademark with the famous trademark.

4. Thus, the case involved in the ruling, after the ruling of the Grand Chamber, the Supreme Administrative Court's 110-Year Shang Zi No. 138 judgment is not directly affirming that the case constitutes a risk of diluting the famous trademark's recognition or reputation. On the contrary, the result of the case is still a "rejection of the appeal", and the final result of the judgment still does not constitute the dilution.