Lessons learned: China’s first-to-file TM system
Muji case
Ryohin Keikaku, the company that runs Japanese retailer Muji and its local Chinese subsidiary, Muji Shanghai, have encountered a number of trademark issues in China.
Launched in Japan in 1980, Muji sells a wide variety of household and consumer goods globally. Muji Shanghai launched in China in 2005, using the marks ‘無印良品‘, ’Muji無印良品‘, and ‘无印良品Muji’ in relation to their usual product range of household and consumer goods.
They had also sought to register ‘無印良品’ for products such as bed covers and towels, but this application was rejected by the China National Intellectual Property Administration (CNIPA)Trademark Office as a third party had already registered the trademark in China.
Subsequently, in 2015, a local Chinese company that owned two registered trademarks for ‘无印良品’ (both covering goods in class 24 such as household linen and bed sheets) succeeded in two separate infringement proceedings against Muji.
Following unsuccessful appeals against the decisions, Muji further appealed to the Beijing Municipal High People’s Court.
In December 2019, the High People’s Court reject the appeals, finding that Muji’s use had infringed the local company’s marks despite their widespread use of ‘无印良品’ globally. Muji was ordered to pay over Rmb1,000,000 ($142,221) for both actions, and issue statements regarding the decisions via its official flagship store and Tmall (the Chinese language website).
Following the decision, the president of Ryohin Keikaku in a press conference stated: “The lesson that I have learned from the case is: secure your rights first when you are considering expanding your business overseas.”
Although Muji is still present in the Chinese market, with more than 250 stores and the launch of a hotel business, it’s clearly a frustrating situation for the company.
For certain products, the company is currently applying stickers to cover the Chinese characters which were central to the infringement action.
As well as having to change the presentation of their products by placing stickers over the Chinese characters, Muji’s ability to use and enforce the ‘无印良品’ mark in China has also been affected by the trademark issues.
A Supreme battle
Another key decision of 2019 relates to the trademark ‘Supreme’. Valued at $1 billion in 2017, New York-headquartered Supreme is a well-known high-end streetwear company.
Supreme discovered that International Brand Firm, which had launched the Supreme Italia brand, had registered trademarks for ‘ITSUPREMENOW’ in China and was running two Shanghai stores which sold products mimicking the well-known New York brand.
