Michael Jordan case gives hope to foreign companies who fall victim to China's First to File system

16 December 2016


On 8 December 2016, the Supreme People's Court ("SPC") handed down its judgments in the long-running and high-profile trademark disputes between retired US basketball star Michael Jordan and the domestic sportswear retailer, Qiaodan Sports.

Michael Jordan had lost at both the Trademark Review and Adjudication Board (the "TRAB") and two subsequent administration appeals. The SPC decision, although not a complete victory for Michael Jordan, is far more positive for trademark proprietors looking at China as a jurisdiction to do business.

Background

Qiaodan Sports is a well-known sportswear and footwear manufacturer in China with more than 6,000 stores across China. The company historically owned many Jordan related trademarks dating back to the late 1990s. There were three relevant marks in the current dispute in various classes:

  1. "乔丹" (which is a Mandarin translation for "Jordan" - it is pronounced very similarly to "Jordan" in English);
  2. "Qiaodan" (the Chinese Pinyin for "Jordan"); and
  3. the "Qiaodan & device" logo mark.

The relevant classes are Class 25 (Clothes) and Class 28 (Sports Apparatus) (together the "Disputed Trademarks").

Michael Jordan has been well-known in China since the 1980s. However, critically, Michael Jordan never registered any trademarks in China.

Earlier disputes

In 2012, Michael Jordan asked the TRAB to revoke Qiaodan Sports' Disputed Trademarks, accusing the company of misleading consumers about its connection with Michael Jordan and of gaining huge economic benefits by infringing Michael Jordan's prior rights. Michael Jordan relied on a number of Articles of the Chinese Trademark Law (2001). For example, Article 31 which states: "No trademark application shall infringe upon another party’s existing prior rights", Article 10.1(8) which includes, amongst other things, a prohibition on customer confusion as a result of "unhealthy influence" and Article 41.1 which prohibits the registration of a trademark acquired by fraud or other unfair means.

However, the TRAB rejected Michael Jordan's applications because:

  1. There was sufficient difference between the mark "乔丹" (Qiaodan), "Michael Jordan" and its Chinese translation "迈克尔·乔丹" (Maike'er Qiaodan) and, therefore, there will be no customer confusion;
  2. "Jordan" is a common surname in western countries and there was insufficient evidence to show that "乔丹" or "Qiaodan" necessarily referred to Michael Jordan as opposed to anyone else with the name "Jordan"; and
  3. One of Qiaodan Sports' Disputed Trademarks - "乔丹" was recognised by the Chinese Trademark Office as a well-known trademark in 2009. This means that the mark enjoyed a very high reputation in China and, as such, it would not be confused with Michael Jordan's unregistered rights.

In 2014, Michael Jordan filed his first appeal action to Beijing First Intermediate People's Court and failed in persuading it that the TRAB's decision should be overturned. Michael Jordan then appealed to the Beijing High Court and once again did not prevail.

Michael Jordan refused to accept the decisions and, therefore, made applications to the SPC (China's highest court) for a re-trial. The SPC accepted the re-trial applications relating to the Disputed Trademarks.

The Re-trial

The re-trial was heard on 26 April 2016 before a five-member collegiate panel. The judgment focusses mainly (but not exclusively) on Article 31 of the Trademark Law. As such, the SPC assessed in detail whether Michael Jordan owns the prior rights in "乔丹"/"Qiaodan" and, if so, did Qiaodan Sports' use of the Disputed Trademarks infringe Michael Jordan's prior rights.

The decision of the SPC in relation to the "乔丹" trademarks:

As regards to the "乔丹" trademarks in classes 25 and 28, the SPC held that Michael Jordan is entitled to the trademark for the translation of Jordan in Chinese - "乔丹". The reasons for the SPC's positive decision is that Michael Jordan submitted extensive evidence that there are very significant numbers of reports, articles and books about himself where he is referred to solely as "乔丹". In addition, there was sufficient evidence to prove that Michael Jordan was very well known in China (and not just in basketball circles) and that the public in China normally referred to Michael Jordan by reference to "乔丹" alone. Given the evidence surrounding the high level of recognition of Michael Jordan by reference to the Chinese characters "乔丹", the SPC held that use of the identical mark by Qiaodan Sports in relation to sportswear was likely to cause customer confusion.

In addition, the SPC appeared to also accept that Qiaodan Sports' general trademark activities amounted to bad faith. Cited reasons for this included the fact that Qiaodan Sports mentioned to its shareholders in its prospectus that there is a likelihood of misleading the public about its ties with Michael Jordan. In addition, there was evidence that Qiaodan Sports registered many other trademarks relating to Michael Jordan (including his children) - some of which Michael Jordan had previously been able to cancel.

Taking the above into consideration, the SPC held that the marks registered in Chinese characters “乔丹” should be cancelled.

The decision of the SPC in relation to the "Qiaodan" (Chinese transliteration) trademarks and the "Qiaodan & device" combination trademark:

As to the other cases relating to the "Qiaodan" trademarks and the "Qiaodan & device" combination trademark, the SPC held that Michael Jordan has no prior rights in the mark "Qiaodan" because he was unable to prove with evidence that there was a connection between "Qiaodan" and Michael Jordan in the minds of the public. The court found that just because there is a connection in Mandarin does not necessarily mean that it follows there would be a similar connection with the Chinese Pinyin equivalent because the Chinese Pinyin "Qiaodan" can be referred to by other Chinese characters other than Michael Jordan's surname "乔丹".

In conclusion, the SPC upheld the previous judgments in relation to "Qiaodan" trademarks and the "Qiaodan & device" combination trademark and dismissed Michael Jordan's re-trial application.

Why an Intellectual Property (IP) strategy is important

It has been a long and expensive battle for Michael Jordan to win a victory in China to stop Qiaodan Sports using his Chinese surname which has been causing customer confusion for many years. This demonstrates the positive development of Chinese courts and their willingness to defend non-Chinese proprietary rights. This is certainly welcome news for foreign IP rights-holders in China.

However, it cannot be seen as a total victory for Michael Jordan and this still makes it important for foreign individuals and companies to map out a detailed and timely IP strategy for China so as to avoid falling victim to the first to file IP policy.


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