Corporate name and trademark are both important components of corporate brand, the former indicates the information of the product manufacturer, the latter distinguishes different products or services, which is of great commercial significance to the operator. In business practice, the trade names of some enterprises are consistent with their trademarks, such as Haier, Hisense, Xiaomi, Huawei, etc. For companies implementing multi-brand strategy, based on the consideration of distinguishing brand image and brand management risks, general corporate names and trademarks are inconsistent, such as Procter & Gamble and Unilever. In the case of inconsistency between the enterprise trade name and the trademark, if the trade name used by the enterprise is the same or similar to the registered trademark of others, it will not only make wedding clothes for others, but also cause legal disputes. In the case of inconsistency between the corporate name and the trademark, if the protection of the corporate name is not in place, it is registered as a trademark by others, or the corporate trademark is registered as a corporate name by others, it will lead to market confusion, cause consumers to misrecognize, and affect the brand image. The consumer goods industry, especially the multi-brand strategy of cosmetics business operators should attach great importance to the use and protection of business names to avoid stepping on the pit. Jiao Hanwei, lawyer of Shanghai Guolinghouse Law Firm, will discuss the use and protection of cosmetics companies from a legal perspective for the reference of operators.

Choice and use of trade names

The enterprise name is an essential factor for market operators and an important symbol to distinguish different market entities. The name of an enterprise is usually composed of administrative divisions, brand name, industry or business characteristics, and organizational form, among which the main distinguishing mark is "brand name", which is usually called "trade name". For example, Millet Technology Co., LTD., in which "millet" is its trade name, "science and technology" is its industry, "limited liability company" is its organizational form, and the most identifiable is the trade name "Millet". The company name directly reflects the information of the manufacturer of the product, and conveys the reputation of the manufacturer to the counterparty or consumers, which is of great commercial significance. Direct use of trademarks as trade names is the mainstream strategy in business practice, but in multi-brand strategy, direct use of one of the trademarks as trade names on the one hand will lead to brand image confusion, on the other hand, it will also lead to the superposition of brand management risks to a certain extent, so most multi-brand enterprises adopt the strategy of independent trade names. In the case of the use of independent trade names, trade names and trademarks are inconsistent, cosmetics companies must be careful when determining trade names. Usually a good business needs to meet two conditions:

(1) The trade name is not identical with or similar to the registered trademark of another person

If the trade name used by the cosmetics operator is the same or similar to the registered trademark of others, on the one hand, the operation and promotion act is to make wedding clothes for others, the other party will be suspected of trademark infringement or unfair competition. Once constituted infringement or unfair competition, cosmetics enterprises will suffer unbearable heavy losses. Because the name of the cosmetics enterprise is the cosmetics logo must be marked with content, once it is identified as infringement or unfair competition, it is necessary to immediately stop the infringement or unfair competition; The immediate cessation of infringement or unfair competition means that the enterprise has to change the trade name, remove all commercially available products from the shelves, and scrap the inventory of finished products and packaging materials. The impact is a systemic risk for the enterprise's operation, which will not only lead to great direct losses, but also lead to the sales shock of the enterprise, and even cause the collapse of the enterprise. At the same time, because the products sold by the enterprise are marked with companies that constitute infringement or unfair competition, the enterprise's past product sales data will push up the amount of civil compensation, which will cause great compensation losses.

(2) The trade name has significant performance enough to be registered as a trademark

Trade name is an important part of enterprise name, but trade name is not equal to enterprise name. The right of trade name is a category of industrial property defined by the Paris Convention for the Protection of Industrial Property. The trade name obtained through legal registration is protected by law. There are specific provisions on the protection of the right of enterprise name in the general principles of civil law of our country, but there are no specific provisions on the acquisition and protection of the right of trade name. As far as the protection of commercial name or the right of business name is concerned, the laws of our country are to be perfected at present. In operation, there are mainly two risks: one is to be registered as a trade name by other enterprises in different administrative regions; the other is to be registered as a trademark for use on goods by other enterprises, both of which will lead to brand confusion and consumer confusion. According to the Company Law and the Regulations on the Administration of Enterprise Registration and other relevant provisions, after the successful registration of the business name of the operator, its business name has exclusivity and specificity in the same business scope within the same administrative division. China's enterprise registration is the implementation of a hierarchical registration system, each administrative region independently approved the registration, so there are many different administrative areas of the business subject name is different, but the same business name situation, to the operator has brought great confusion. The use of the business name registered by the operator can only protect the business name from being abused in the business name in a specific region, and can not prohibit the abuse of the business name in the country. At this time, the business operator must register the trade name that has been registered as the enterprise name as a trademark. Compared with the regional special use of trade names, the exclusive right of trademark is clearly stipulated in China's Trademark Law, and its exclusive right is protected throughout the country, with a wider and more comprehensive scope of protection. Therefore, in the case of inconsistency between trade name and trademark, registering business name as trademark is an effective measure of trade name protection. In order to be able to register the business name as a trademark, it is necessary for the operator to choose a significant trade name when determining the business name. In business practice, many trade names do not have significant characteristics and cannot be registered as trademarks. To sum up, a good trade name is not only the same or similar to the registered trademark of others, but also has a significant and can be registered as a trademark; Otherwise, it is not a good business and the operator may tread on the pit.

The conflict between trade name and trademark

Trademark is another core component of the brand, specifically refers to the different sources of goods or services of the logo, generally by the combination of words, letters, numbers, graphics, sound and other elements. Trade name and trademark are very different, the function of the two is different, the former indicates the information of the product manufacturer, the latter distinguishes different products or services; The exclusive right of the trademark enjoyed by the enterprise belongs to the category of intellectual property rights, and the name right enjoyed by the enterprise belongs to the category of personality rights, which belong to different legal categories. The Trademark Law, the Regulations on the Implementation of the Trademark Law and other laws and regulations shall apply to the application, use and protection of trademark registration. The examination and registration of enterprise names within the scope of enterprise names are applicable to the Company Law, the Provisions on the Administration of Enterprise Name Registration and other laws and regulations. The trade name of the enterprise can be consistent with the trademark, such as Haier, Hisense, Xiaomi, Huawei, etc., or it can be inconsistent with the trademark, such as Procter & Gamble, Unilever, etc. Although there are many differences between trade name and trademark, they are very closely related. In most cases, they appear together on the same commodity and are the core components of the brand. In the components of the brand, the two have the highest degree of correlation and consumer attention. Because of this, in business practice, trademarks with certain visibility of operators are often registered as business names by others, or business names with certain visibility are applied for registration as trademarks by others, which is called the conflict between trade names and trademarks. Among them, the act of registering another person's trademark as an enterprise name does not belong to the act of trademark use, so it does not constitute trademark infringement. However, this act causes consumers to mistake the two as having a specific relationship, and then causes market confusion. In essence, it is the act of market confusion in the process of operation, and belongs to the category of unfair competition in nature. The act of registering a well-known trade name as a trademark belongs to the infringement of the right of enterprise name and belongs to the category of infringement.

Resolving the conflict between trade name and trademark

As mentioned above, there are often conflicts between the enterprise name and the trademark, mainly in the case that the enterprise name established later infringes on the prior trademark right and the case that the trademark right applied later infringes on the enterprise name established earlier. How should enterprises solve the above situation? The details are as follows:

(1) The later registered business name infringes on the right of the earlier registered trademark

In business practice, once an operator registers another person's registered trademark as an enterprise name, it will inevitably be mistaken for a specific connection between the two, leading to market confusion. Article 58 of the Trademark Law of the People's Republic of China stipulates that where a registered trademark or an unregistered well-known trademark is used as a shop name in an enterprise name, misleading the public and constituting an act of unfair competition, it shall be dealt with in accordance with the relevant provisions of the Anti-Unfair Competition Law of the People's Republic of China. Article 6 of the new Anti-Unfair Competition Law, which came into effect on January 1, 2018, has improved the provisions on acts of confusion, so that any act of confusion that causes people to mistake it for another person's goods or has a specific connection with another person constitutes unfair competition. In particular, Article 6 adds a supplementary clause (4) "other acts of confusion sufficient to be mistaken for another person's goods or to have a specific connection with another person". The violation of the prior registered trademark right by the later registered enterprise name belongs to the unfair competition act in which the operator confuses the enterprise name in the process of causing it to be mistaken for the goods of others or has a specific connection with others, and is prohibited by Article 6 of the Anti-Unfair Competition Law. Therefore, if a trademark that has a certain influence is registered as an enterprise trade name by others, it can be resolved through litigation and investigation by the market supervision and management department in accordance with the relevant provisions of the Trademark Law and the Anti-Unfair Competition Law, which can not only advocate the actor to stop the unfair competition act, but also require the actor to compensate for the loss.

(2) after the application for trademark registration infringes on the first registered enterprise trade name
The current Trademark Law provides for the procedure of trademark objection and trademark invalidation to protect the prior enterprise name right. Article 32 of the Trademark Law stipulates that an application for a registered trademark shall not infringe upon the prior rights of others. The right of enterprise name belongs to the category of prior rights provided for in this article. Where a later registered trademark infringes on the right of an earlier enterprise name, if the later trademark is within the period of preliminary examination and approval, the owner of the enterprise name may file a trademark objection procedure in accordance with Article 33 of the Trademark Law; If the latter trademark has been registered, it may apply for the invalidation of the registered trademark in accordance with Article 44 of the Trademark Law. In the Trademark Examination and Trial Standards revised and published by the Trademark Office in 2016, it is clear that the criteria for determining the prior brand right in trademark opposition and trademark invalidation procedures are as follows: "Where an application for registration as a trademark is made for the same or similar words with the same or similar names that have been previously registered and used by others and have certain popularity, which is likely to lead to confusion among the relevant Chinese public and may cause damage to the interests of the owner of the prior name, it shall be deemed as an injury to the prior name rights of others, and the contested trademark shall not be approved for registration or shall be invalidated."

Abuse of "RT-Mart" trademark as a business name compensation of 5 million

Kangcheng Investment (China) Co., LTD. (hereinafter referred to as "Kangcheng Company") is the owner of the trademark of the well-known supermarket chain "RT-Mart" (trademark registration No. 5091186). Kangcheng company trade name is "Kangcheng", trademark is "RT-fat", the two are inconsistent.  Rt-mart Investment Co., LTD. (hereinafter referred to as "RT-Mart Investment Co., LTD.") is an independent market operator and has no investment or shareholding relationship with Kangcheng Company. Rt-mart Investment Company not only names itself as "RT-Mart Investment Co., LTD." without authorization in its operations, but also uses the above name in its operations, and also highlights the use of the plaintiff's "RT-Mart" trademark and the combination of "RT-Mart" and "DRF" in its website and actual business publicity. In 2015, Kangcheng sued RT-Mart, requesting the court to order RT-Mart to stop the infringement, eliminate the impact and compensate for economic losses of 5 million yuan. The Shanghai Intellectual Property Court held that the defendant RT-Mart Investment Company knew that Kangcheng Company had registered the use of the "RT-Mart" trademark, but still used the same brand name as the trademark "RT-Mart" in the enterprise name. It is enough to cause the relevant public to have confusion and misperception of the relationship between RT-Mart Investment Company and Kangcheng Company using "RT-Mart" brand name, so RT-Mart Investment Company using "RT-Mart" as a brand name constitutes unfair competition to Kangcheng Company. The final judgment of RT-Mart Investment company to stop using the word "RT-Mart" in the corporate name, and to eliminate the impact of Kangcheng company, compensation for economic losses of 3 million yuan. After the verdict of the first instance, RT-Mart Investment company refused to accept and filed an appeal. The Shanghai Higher People's Court rejected the appeal and upheld the original verdict. This case is a typical case that the name of a later registered enterprise infringes on the right of the earlier registered trademark.

Jiao Hanwei

Chief partner and lawyer of Shanghai Guohillhouse Law Firm

Have more than 10 years of legal service experience and more than 5 years of operating experience in the cosmetics industry, familiar with law and business, He is good at providing enterprises with cosmetics business legal services, legal counsel, equity structure, equity incentive, equity financing, equity acquisition, brand management, brand rights protection, brand acquisition, business negotiation, litigation and arbitration and other solutions for the whole stage of enterprise development from the perspective of law and operation. He has led many corporate equity restructuring, equity incentive, equity financing, factory acquisition, brand acquisition and other cases, and has rich experience in practical operation.