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  • The Same Company Names, Which One Should Be Rectified?

    The Same Company Names, Which One Should Be Rectified?

    When a company becomes famous, it attracts not only business opportunities, but also imitators. Taiwan “南 X” Plastic Industry Co., Ltd. has successively established several subsidiaries under the name “南X” in mainland China. One of those subsidiaries, “南X” Electronics (Kunshan) Co., Ltd. (hereinafter referred to as “Kunshan南X”) was established in August 2000. However, Shanghai ”南X” Copper Clad Foil Co., Ltd was established in June 2000, and changed its name as ”南X” New Material Technology Co., Ltd. (hereinafter referred to as “Shanghai 南 X”) in August 2017. In addition, the business scope of Shanghai 南 X is similar to Kunshan 南 X. Then Kunshan 南 X sued Shanghai 南 X for unfair competition, demanding that Shanghai 南 X should stop using its company name. Finally, the court rejected Kunshan 南 X’s claim.

    In practice, some companies have a same or similar name. On the one hand, more and more companies have been established. On the other hand, in order to take advantage of other companes’ name with higher reputation, a few companies have registered or changed its name which is same as or similar to those names with higher reputation.

    Article 9 of the “Administrative Provisions on Enterprise Name Registration” stipulates that an enterprise name shall not contain the contents and characters which may mislead or confuse the public. Article 41 of the “Measures for the Implementation of the Administration of Enterprise Name Registration” stipulates that where the use of a registered enterprise name may mislead the general public, create misunderstandings or infringe upon the lawful rights and interests of other persons, the enterprise name shall be deemed as inappropriate and shall be rectified. In addition, Article 6 of the “Anti-unfair Competition Law” prescribes that business operators shall not commit the following acts to mislead others to misidentify their goods as others’ goods or to associate their goods with others:……(2) unauthorized use of other’s influential enterprise name (including abbreviation, brand name etc.), social organization name (including abbreviation etc.) and name (including pen name, stage name, translated name etc.);.

    Therefore, if a company name is well-known, the company could request the other company with same or similar name to rectify through administrative complaint or civil litigation. However, there are two difficulties in dealing with such problems. The company shall prove its name is influential, and the other’s name has misled or confused the public.

    Regarding the proof of influential, it recommended to pay attention to the following aspects.

    First, refer to Article 1 of the “Supreme People’s Court, Several Issues Concerning the Applicable Laws in the Trial of Unfair Competition Civil Cases Interpretation”, the party could collect evidence on the registration time of its name; the sales geographic area and quantity; the duration, extent and geographic area of any publicity; media reports; and awards etc.. For example, in the case (2019) Hu 73 Min Zhong No. 297, after reviewing the duration and geographic area of using the company name, the sales quantity, the brand awareness and influence, etc., the Shanghai Intellectual Property Court considered that “冠 X” as the plaintiff’s name and registered trademark had a certain market visibility when the defendant was established. Then the court found that the defendant, as a competitor of the plaintiff, who knew that the plaintiff’s name and registered trademark had significant influence, but still registered and used the same name for business purpose in the same industry; and such behavior represented the defendant had the intention to take advantage of the influence of the plaintiff’s name and the commercial reputation of the plaintiff’s registered trademark, which might confuse the relevant public, and mislead the relevant public to associate the two parties.

    Second, regarding the cases which cross provinces administrated by different registration authorities, the company shall prove that its name has influence in the other company’s location, for example, the company has established a branch in the other company’s location, or it has many clients in the other company’s location for a long time.

    Third, it is worth noting that if a company has registered its name with a trademark, especially such trademark has been identified as a well-known trademark or a famous trademark in the place of litigation, it would be more possible to prove the influential.

    Regarding the identification on the possibility of confusion, the key is to prove the company’s name is well-known.

    The reason is that if a company’s name is well-known, the other companies in the same industry are or should be aware of the company’s name. If the other companies have not taken appropriate measures to distinguish the names, the relevant public would be confused. For example, in the case (2019) Hu 73 Min Zhong No.322, the Shanghai Intellectual Property Court considered that the name “春秋” had a certain reputation, and pointed out that the defendant, as the competitor, should know the existence of the plaintiff, and should take appropriate measures to distinguish the names, since the defendant failed to do so, and the relevant public would associate the plaintiff’s name with the defendant’s name. Therefore, the defendant was ordered to rectify its name, which must not contain the words “春秋”.

    From the perspective of the defendant, normally, it could defend with its own history, awards, brand reputation, the possibility on the distinguish of the names by the individuals in the industry and etc..