How Tencent will secure its微信mark

Since its introduction to the market in 2011, Tencent Inc’s微信 (Wei Xin in Pinyin and WeChat in English) app has become China’s most popular and commonly used social messaging app, with 650 million monthly users in mainland China and 698 million users worldwide.

The true value of WeChat app goes far beyond its user numbers; it has become a ubiquitous mainstay in the daily lives of its Chinese users, whether for messaging, video and audio calls, or mobile payments and banking.

Two months before the release of the WeChat app, Trunkbow Asia Pacific (Shandong) Co applied for the微信 mark for use in association with messaging services and various other telecommunication services.

Surprisingly, rather than Tencent filing an opposition against Trunkbow’s微信trademark application, an individual named Zhang Xinhe opposed Trunkbow’s application based on two absolute grounds for refusal:

• Article 10.1.8 of the Trademark Law – the use and registration of the微信 mark by Trunkbow would lead to unhealthy influences. As Tencent’s use of the微信mark had achieved a stable market order, the use of the微信 mark by Trunkbow would cause confusion with Tencent’s trademark rights. It would therefore be against the public interest to permit registration of the mark, as it would have a negative influence on the public order;
• Article 11.1.2 of the Trademark Law – the opposed 微信mark was a generic name for the claimed services and thus lacked distinctiveness as a trademark.

Both the China Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) agreed with the opponent that the use and registration of the微信 mark by Trunkbow would lead to unhealthy influences, and therefore refused Trunkbow’s application in accordance with Article 10.1.8.

In the past, Article 10.1.8 of the Trademark Law has been broadly interpreted and applied by the CTMO, the TRAB and the courts in trademark opposition proceedings, on the basis that the public would be misled by the use of an applied-for mark or the applied-for mark violated the good-faith principle.

More recently, Article 10.1.8 of the Trademark Law has been understood to apply solely in cases where the nature of an applied-for mark itself is contrary to the public interest and the maintenance of public order. The Supreme People’s Court has also provided guidance for the application of Article 10.1.8. Pursuant to Article 3 of the Supreme People’s Court’s Interpretation on Certain Issues concerning the Trial of Administrative Cases of Trademark Authorisation Confirmation (Fa Fa 2010 No 12):

"In judging whether a mark has any other adverse effect, a people’s court shall consider whether the mark or any of its elements may cause any negative effect on political, economic, cultural, religious, ethnic and other public interests or the public order. If a mark would only damage certain civil rights and interests after it is registered, since the Trademark Law has provided the remedy measures and the corresponding procedures, it is not appropriate to decide that the mark has any other adverse effect."

Trunkbow appealed the TRAB’s decision to the Beijing Intellectual Property Court, which upheld it on the basis of Article 10.1.8. Notably, the Beijing Intellectual Property Court held that due to the popularity of Tencent’s微信app, the use and registration of Trunkbow’s微信mark for similar services would lead to a likelihood of confusion to such an extent - including with respect to over 600 million monthly users - that registration would result in significant unhealthy influences against the public interest.

Dissatisfied with the Beijing Intellectual Property Court’s decision, Trunkbow further appealed to the Beijing High Court. On April 20 2016, the Beijing High Court delivered its judgment in Trunkbow v TRAB, upholding the TRAB’s decision to reject Trunkbow’s application for the微信 mark. However, the Beijing High Court changed the legal basis for the refusal of the mark from Article 10.1.8 (as upheld by the Beijing Intellectual Property Court) to Article 11.1.2 of the Trademark Law, holding that the 微信mark was a direct reference to the function and characteristics of the claimed services and thus lacked distinctiveness pursuant to Article 11.1.2 of the Trademark Law.

According to the Beijing High Court, 微信 would be understood by the relevant public to mean ‘faster and easier than emails’. The character 微 means ‘small’ and ‘few’; when combined with the character 信, which means ‘message’, the relevant public would understand this to mean a service that was faster and easier than emails and SMS.

In its decision, the Beijing High Court also explained why Article 10.1.8 should not apply to the 微信 mark. It held that Article 10.1.8 should apply only to marks that, in substance, would have negative influences or be detrimental to socialist ethics or customs, rather than consequences arising from use of the mark. As such, in the words of the court:

"… the court should be prudent when they decide on whether a mark has ‘other negative influences’ or not. Since once the decision is made that a mark has ‘other negative influences’, the mark shall not be registered and used on any classes of goods and services by any one. "

Therefore, if Trunkbow were prohibited from using the微信 mark pursuant to Article 10.1.8, Tencent – as well as everyone else – would be barred from using the mark.

While the Beijing Intellectual Property Court’s decision to support an opposition based on unhealthy influences pursuant to Article 10.1.8 had some supporters, who lauded the court’s creativity in arriving at its decision, it was also heavily criticised by other commentators who maintained that the decision was contrary to, among other things, China’s first-to-file trademark system, and demonstrated a bias towards domestic companies compared with the challenges that other famous foreign brands (eg, iPAD, the 乔丹 trademark (pronounced ‘Qiao Dan’ in Pinyin, which is the Chinese equivalent for ‘Jordan’ and used to refer to Michael Jordan) and the 卡斯特 trademark (pronounced ‘KA SI TE’ in Pinyin, which is the Chinese equivalent for CASTEL)) had experienced at the hands of the CTMO, the TRAB and the courts.

Overall, and in light of the negative commentary, the Beijing High Court’s reasoning – and departure from the Beijing Intellectual Property Court’s reliance on Article 10.1.8 – is a decision that is much more consistent with China’s developing trademark law.

As the Beijing High Court was of the opinion that the 微信 mark was descriptive of the services offered by Tencent in association with微信, some may believe that the decision does not bode well for any later efforts by Tencent to register the 微信 mark. However, in the authors’ opinion, Tencent is almost certain to register the微信 mark, by demonstrating that微信has acquired distinctiveness through Tencent’s use of微信 in association with the WeChat app and its 650 million monthly users in mainland China.  

This article first appeared on WTR Daily, part of World Trademark Review, in July 2016. For further information, please go to www.worldtrademarkreview.com.