Tips for Enterprise Trademark Registration——from The MUJI Case

After nearly ten years, the MUJI trademark case has finally been finalized.  Last month, Beijing’ high court made a final judgment on the dispute over MUJI’s trademark infringement, and ordered Japan’s Muji and its subsidiaries to immediately stop infringing the exclusive right to use the registered trademark of Miantian Company and Beijing Natural Mill Corp.

It is well known that a trademark is a symbol that distinguishes goods or services. Each registered trademark is designated for a certain good or service, which is needed for trademark search, examination, and management. In China, all goods and services are divided into 45 categories totally. Among the trademark registration applications filed by the Japanese Muji when it entered the Chinese market in 1999, Class 24 (Textiles, bedding, towels, etc.) was omitted.

A Chinese company named Hainan Nanhua filed an application for registration of the “无印良品” trademark in Class 24 at the Chinese Trademark Office (“CTMO”) as early as April 6, 2000, while the Japanese brand Muji did not register the “無印良品MUJI ” trademark in Class 24 until April 12, 2002. The trademark was later transferred over to Beijing Miantian Corp. Hainan Nanhua and Beijing Miantian eventually sued Muji for trademark infringement in 2015.

According to the Trademark Law, in China, the principle for trademark registration is: “first to file”. It is based on the application for registration as the legal basis for obtaining the exclusive right to a trademark. The exclusive right to trademark belongs to whoever first applies for registration. Prior use cannot be used as a basis for obtaining exclusive rights to a trademark. Even if a trademark user has used a trademark commercially, he or she cannot obtain the exclusive right to use the trademark without applying for registration with the CTMO.

Therefore, trademark registration planning for a prospective market is vital, as it could be the difference between success or failure of an enterprise’s business plan. In order to maximize economic efficiency of trademark registration, it is necessary to carry out cost accounting to determine the relevant trademark registration scope.

Firstly, the core products and its trademark properties, including its Chinese name, English name, graphics, shall be considered while contemplating a trademark registration plan in China. In the “Muji case”, Japan’s Muji failed to comprehensively investigate the registration of core trademarks in the Chinese market and make countermeasures such as renaming according to the company’s specific situation. Even if the English trademark has been registered, the enterprise shall also search whether the Chinese name is occupied, and even pay attention to Chinese traditional characters.

Secondly, the registration of enterprise trademarks shall be carried out in an organized manner, inspired by the following questions. Which trademarks are predominantly used? Is there a series of product lines? Which are the flagship products? Which are the potential products?

It is difficult to register all trademarks classes in the world. However, when embarking on international expansion, as part of an enterprise’s intellectual property rights strategy, trademark strategies must also have foresight. Otherwise, enterprises will inevitably fall into potential intellectual property disputes.