Japan MUJI lost! "rush to register" won the trademark competition between China and Japan "MUJI"

Guide: Recently, the Beijing Higher People's court made a final judgment on the case of trademark infringement of MUJI. It is said that Japan MUJI company constitute trademark infringement on Beijing MUJI company, and it is ordered to stop the infringement immediately, issue a statement, and compensate Beijing MUJI company for economic losses totaling more than 600,000 yuan.

A.     Why are the trademark disputes between China and Japan over "MUJI" products and the "rush to register" of domestic MUJI products protected?

Hainan Nanhua industrial trading Co., Ltd. was approved to register and approve the trademark of "MUJI" for the 24th category of goods in 2001. In 2004, the trademark was approved to be transferred to Beijing Miantian Textile Co., Ltd. (hereinafter referred to as " Miantian "). After that, Miantian authorized Beijing MUJI Investment Co., Ltd. (hereinafter referred to as "Beijing MUJI") to produce and sell goods involving the trademark of MUJI.

As early as 1999, Japan MUJI Co., Ltd. (hereinafter referred to as "Japan MUJI") has applied to our trademark office to register the trademark of MUJI. However, at that time, the trademark only applied for registration in categories of 3, 9, 16, 20, 21, 25, 26, 35 and 41, but 24 of which were not applied for. Japan MUJI was registered as a company in China only in 2005. That is to say, before it entered China, the trademark database of China had the trademark of MUJI approved for use in the 24th category of goods.

Although Miantian has issued a statement that its trademark registration has nothing to do with Japan "MUJI", its physical stores are very similar style with Japan MUJI in terms of interior decoration or products. Whether it is "malicious rush to register" or there is "unfair competition behavior", both sides have different opinions.

Since then, Japan MUJI and domestic MUJI have experienced several lawsuits on trademark issues. This is a lawsuit initiated by Miantian and Beijing MUJI against Japan MUJI for infringing its trademark right of 24th category. In the first and second trials, the Japan MUJI side claimed that the trademark it used was "MUJI" (traditional MU), which did not constitute infringement, but the final result of the trial was still Japan's defeat.

In response to the Japan MUJI's defeat, some people said that the court supported the rush to register, but in fact it was not. According to the judgment, the struggle between domestic MUJI and Japan MUJI has gone through trademark office, first instance and second instance of the court, all the way to the Beijing Higher People's court, and the final result is to determine the legal compliance of the approved registered domestic MUJI.

The Trademark Law of our country has a clear stipulation: the application for trademark registration shall not damage other people's existing prior rights, nor register others' used and influential trademarks by improper means. According to the above facts, the registration time of the trademark "MUJI" was in 2001. At that time, the Japan MUJI had not carry out any advertising in the mainland China at all, and even the vast majority of Chinese did not know the existence of the Japan MUJI. It was not until 2005, four years later, that Japan MUJI opened its first store in Shanghai, China. It is generally understood that the trademark of MUJI registered by Chinese enterprises could not infringe the rights and interests of Japanese businesses at that time. It was neither circulated in the Chinese market, nor had its influence, nor had "prior rights" for Chinese businesses to infringe. At that time, the domestic "MUJI" registered in accordance with laws and regulations should be protected by law.

As China attraction strength increasing, this incident also sounded an alarm for overseas enterprises to make a reasonable layout of trademarks before entering China.

B.     The origin of the dilemma of Japan MUJI

As we all know, trademark protection has both classified protection and jurisdictional protection.

The classification protection of trademarks requires that the protection of trademarks in corresponding categories should be applied for separately in this category. At the same time, the same trademark can belong to different obliges in different categories. In the case that the same or similar trademark exclusive right belongs to different obliges in different categories, as the different market subjects who own the same or similar trademark respectively, they should exercise their rights under their respective trademark exclusive right, try to draw a clear line between the commercial signs, and avoid confusion and misunderstanding of the relevant public. Therefore, the trademark of MUJI belongs to Beijing Miantian Textile Co., Ltd. and Japan MUJI in different categories.

The legal protection of trademark requires the trademark owner to obtain the exclusive right of trademark in different legal areas if he wants to obtain the protection of his trademark in different legal areas. The acquisition of trademark rights in various countries can be divided into two categories: first to use and first to apply registration. In the United States, Canada, the United Kingdom, Australia and some other countries, the way of trademark acquisition is to use first, while in China, Japan and sme other countries, the way of trademark acquisition is to register first. Therefore, in the case of MUJI between China and Japan, the trademark owner who first applied for registration on the 24th category of goods in China has legal basis for suing MUJI in Japan.

Although Japanese MUJI began to apply for trademarks in China as early as 1999 to arrange trademarks for their products to enter the Chinese market, the layout at that time was only for the goods and services they provided when you applied, without considering the areas that may be involved in the future development of the enterprise. If Japan MUJI applied for registration of "MUJI " trademark on the 24th category of goods at the beginning of the layout of Chinese domain trademark, it would not have lost the case of infringement.

The reason why Japan MUJI lost the case of infringement is due to the lack of awareness of protection. Many enterprises only register their trademarks in what products and services they operate now, and in which countries and regions they operate now. This leaves a chance for the preemption.

 C.     Trademark protection of foreign enterprises in China

With the development of China's economy and the internationalization of Chinese market, more and more foreign capital enterprises enter Chinese market to participate in the competition. Trademark right, from its legal attribute, belongs to private right. Therefore, it is up to the obligee to take precautions in advance and take the initiative to build a trademark firewall in order to prevent being preempted, copied and imitated. In order to prevent the endless disputes of MUJI products in Japan, the following feasible suggestions are put forward for foreign enterprise clients:

1. Layout the Chinese market as soon as possible

"Before the troops and horses are moved, food and grass should go first". Before the products and services of foreign enterprises enter the market of our country, the brand layout should be carried out first. The trademark layout should not only aim at the existing goods and service categories of the enterprise, but also apply for registration prospectively in the goods and service categories associated with its main products and services, as well as the reserved areas in which it may be involved in the future. In the case of sufficient funds and a wide range of fields to be involved in, it is suggested that foreign enterprises carry out the overall layout of 45 categories for their trademarks.

The cost of trademark registration application is very low, and the cost of all the categories is limited in China. If a trademark is preempted, the cost of retaking the preempted trademark may be unlimited. Moreover, long-term litigation or high transfer costs will have a negative impact on the development of a new market. Therefore, it is a best choice for foreign enterprises should be apply to register multi category or all categories for their trademark before enter Chinese in a long-term perspective.

At the same time, enterprises should protect their own brand from infringement. In addition to trademark registration, they should also register the enterprise name, design patent application, domain name registration, copyright registration, etc. to have a full protection for their brand.

 2. How to deal with the preemption

For the situation that the trademarks of foreign enterprises have been registered by others before they enter Chinese market, the people who does that because the goal of them is to get a higher transfer fee from the brand owner, or it may be to seize other brands and get business opportunities.

For those who do not want to use the registered trademark, the fastest way to retrieve the registered trademark back is to buy it, but the cost may be high. In addition to the way of purchase, we can also regulate the behavior of occupation preemption according to the current trademark law of China. There are many precedents to support it.

For those who intend to encroach on other brands, they will not only imitate the users of the trademarks themselves, but also imitate the users in other aspects of product provision, so as to confuse the public and achieve their purposes. For example, when Beijing MUJI sells its MUJI trademark goods, it imitates Japan MUJI from many aspects, such as shop decoration and shop recruitment. Therefore, Japan MUJI also initiated many lawsuits against Beijing MUJI for unfair competition and won the lawsuit.

The purpose of trademark legislation is to protect the right of exclusive use of trademarks, thus protecting consumers' right to choose different goods and services, and protecting the reputation of the company. Through preemptive registration, they plundered the exclusive right of trademark of the founder of the trademark, separated the goods from the trademark in fact, confused the consumers, and plundered the reputation of the relevant companies. The behavior of consumers' misidentification and market disorder caused by preemptive registration, which violates the principle of good faith, is bound to be stopped by trademark law and unfair competition law of our country.

3.  Retain evidence of trademark use

Although the Trademark Law of our country does not require to submit the use evidence every certain time, it is necessary to provide the use evidence to prove the earliest use time and continuous use state of the trademark in administrative procedures and lawsuits such as trademark revocation. Therefore, the evidence of each period should be retained since the trademark is put into use, in case of need.

As for the use of trademarks, Article 48 of China's trademark law clearly stipulates that "the use of trademarks refers to the use of trademarks in commodities, commodity packaging or containers and commodity trading documents, or in advertising, exhibitions and other commercial activities, to identify the origin of commodities". Therefore, any trademark use behavior that conforms to the above legal use rules can be preserved as use evidence.

The dispute between China and Japan over the "MUJI" trademark reminds foreign enterprises who want to enter the Chinese market. They should realize that different legal regions have different measures and intensity of trademark protection, and should make targeted layout of the Chinese market as early as possible, so as to make full preparation for the future development in China.