First published by WTR

Authored by Xiangrong Wu

Background

FLAMAGAS S.A. is a Spanish manufacturer of cylindrical shaped lighters, which are marketed under the brand “CLIPPER”. FLAMAGAS owns the below 3D trademark registration containing word mark CLIPPER (hereinafter referred to as the Clipper Mark), designating goods including lighters for smoking, cigar cutters, pipes, among others, in class 34 in China.

A Chinese rival Shaodong Lotus Lighter Manufacturing Co., Ltd. (hereinafter referred to as Lotus) filed an invalidation application against the Clipper Mark on April 23, 2018, contending that the said mark is devoid of distinctiveness, thus should be invalidated. The then Trademark Review and Adjudication Board (TRAB, which was later integrated into China National Intellectual Property Administration, “CNIPA”) found that, the Clipper Mark consists of 3D lighter shape and word representation “CLIPPER”. Though the 3D element is devoid of distinctiveness, the word element is distinctive so as to make the Clipper Mark distinctive as a whole. TRAB therefore overruled Lotus’s petition and maintained the registration of the Clipper mark on April 28, 2019.

Flamagas later filed an administrative lawsuit before the Beijing Intellectual Property Court to challenge the TRAB finding re the non-distinctiveness of the lighter shape of the Clipper Mark. On December 23, 2019, the IP court dismissed the petition of Flamagas. The court found that the simple design of the 3D shape, which is likely to be identified by the relevant public as the shape of the lighter per se, rather than a source identifier, is not inherently distinctive. Also, the evidence does not suffice to prove that this shape has acquired secondary meaning through extensive use. The court therefore ascertained the finding of the TRAB.

Flamagas appealed to Beijing High Court, the court of appeal.

Reasoning of the High Court

The court of appeal opted to ascertain the distinctiveness of the Clipper mark in its entirety, rather than focusing merely on the 3D shape component.

The court first assessed the functionality of the litigious mark. It opined that the design of the lighter, which is neither “the mere indication of the shape inherent in the nature of the goods concerned’, nor is “only dictated by the need to achieve technical effects or to give the goods substantive value”, is not functional.

In terms of the assessment of distinctiveness, the court explicitly enumerated the parameters to be weighed up in general, namely the intrinsic meaning of the sign per se, the designated goods/services, cognitive habit of the relevant public as well as the actual use of the litigious mark in the relevant industry. The court specifically underscored the employment of a holistic approach in assessing the distinctive features of a litigious mark with a 3D element, noting in principle, the said mark is not to be deemed distinctive simply because it contains word, device or other elements.

The court analysed that, the Clipper mark is a 3D shape delineating a regular shape of lighters and the word element “CLIPPER” incorporated in the shape is too inconspicuous to be noticed by the relevant public paying a general level of attention. When being used in its entirety on lighters for smoking, the litigious mark would be “the mere indication of the shape inherent in the nature of the goods”. Conversely, when being used on other goods, it would be perceived as a packaging or ornamental pattern by the ordinary consumers thus fails to function as a source identifier. The court of appeal also sided with the IP Court that the litigious mark has yet acquired distinctiveness through extensive use and promotion.

On December 15, 2021, the court rescinded the TRAB decision maintaining the registration of the Clipper Mark and ordered the CNIPA to re-make an invalidation decision.

Comment

The Clipper case is a live example of Article 9.8 of the “Guidelines of the Beijing High People’s Court for the Adjudication of Cases Involving Granting and Affirmation of Trademark Right” (2019), which reads “If a litigious trademark consists of a three-dimensional sign, it shall be judged as a whole as to whether the trademark is distinctive. In general, this trademark shall not be determined as distinctive for containing any words, graphic or other elements.”

The guidelines are a surprising divergence from the court’s previous practice.

In June 2017, the Beijing High Court refused the application for 3D mark containing word element MONTBLANC MEISTERSTUCK (see below image), finding the words and graphic in the mark inconspicuous and the applied mark is more likely to be identified as pen shape, rather than a source identifier. Following the reasoning of this case, it seems safe to infer that “a 3D mark may be deemed distinctive as a whole, provided that the words, graphic, or other components of such mark can be easily identified”?

The newly revised Trademark Examination and Adjudication Manual (effective as of January 1, 2022) uses MONTBLANC MEISTERSTUCK mark as an example of non-distinctive 3D mark. Nevertheless, the Manual notes that, a 3D mark consisting of non-distinctive shape and distinctive 2D elements (as illustrated below) is generally regarded as distinctive in its entirety.

The incoherent methodology adopted by the Beijing High Court and the CNIPA could further complicate the prosecution landscape of 3D marks in China. Even if a 3D mark could pass the functionality check and distinctiveness test of the CNIPA, it may not survive the rigorous scrutiny of the Beijing High Court, if its distinctiveness is neither intrinsic nor acquired, but solely hinges on other elements incorporated in the 3D shape. In practice, brand owners are strongly recommended to gather evidence on the extensive use and promotion of their 3D marks and in the meantime seek alternative routes (like filing design patent and/or registering copyright) to add extra layer of protection to their 3D shapes.