Confusion Over Tradenames in China

In a December 5, 2004 report by China Daily, Zhang Ming, an official with the Corporation Registration Office under the State Administration for Industry and Commerce ("SAIC") is reported as saying that "Technical problems and system differences between the trademark and corporation registration procedures have created an obstacle in trademark protection." Apparently, the databases of the 4,000 corporation registration stations across the country are not linked nationwide, which "makes it hard for registration officials to spot trademark infringements" when dealing with an application for corporation registration. "This loophole has sparked a conflict between trademarks and the names of corporations, yielding a group of companies which lean on well-known trademarks as cash cows," said Liu Min, an official with the Fair Trade Bureau under the State Administration of Industry and Commerce. "To prevent companies from registering and using the similar names of famous trademarks, a well-known corporation and trademark database needs to be established as soon as possible," said Lu Pushun, secretary-general of China branch of the International Association of Intellectual Property Rights Protection.

Corporate name and trademark registration databases are similarly unlinked in the U.S. without creating any such "obstacles." This is because, under U.S. law, a corporate name, or "tradename," is merely the moniker under which the owner(s) of an entity have identified themselves, such as for the payment of taxes and debts. A "trademark," on the other hand distinguishes a specific product or service of that entity from others in the marketplace. Although they can sometimes overlap, tradenames are typically used to link a business entity with the names of its owners in the eyes of the lenders and taxing authorities, while a trademarks are used to link a business with the products or services that it provides to the public. In fact, the U.S. Trademark Office does not consider tradenames during the registration process.

Rights in famous marks are handled under yet another legal doctrine. So-called trademark "dilution" is the unauthorized use of a highly distinctive mark that tends to blur its distinctiveness or tarnish its image. Unlike the standard for trademark infringement, dilution does not specifically require likelihood of confusion, deception or mistake. The U.S. does not have any state-sanctioned list of famous marks. Rather, the distinctiveness of a mark and/or its dilution are considered on a case-by-case basis.