TRADEMARK HORRORS in CHINA: the DSQUARED2 CASE Bad Faith Use and Copying Are Elements of a Trademark Dispute Involving a Fashion Label, As Fabio Giacopello Explains

CASE STUDY TRADEMARK HORRORS IN CHINA: THE DSQUARED2 CASE Bad faith use and copying are elements of a trademark dispute involving a fashion label, as Fabio Giacopello explains. n August 2014, the Zhejiang High People’s Justin Timberlake, Ricky Martin, Nelly Furtado, I Court published its second instance and Robbie Williams. decision in a case between Dsquared2™ e trademark ‘Dsquared2’ (pictured le ) was SA and Bier Bulasi Ltd. e decision stated that rst led in China on March 19, 2004 via Madrid Dsquared2, a company established and owned with the number 3968186 (TM ’186). e by Dean and Dan Caten, should cease infringing Trademark no. 3968186 application was rejected for all goods of Claass the trademark ‘Dsquared’ no. 3849642 owned by 25, except for raincoats, due to the prior presence Bier Bulasi (pictured right). of TM ’642. e trademarks ‘D2’, ‘D2 Dsquared2’, In April 2014, while the judges were dra ing ‘Dsquared2’ are led and registered in many HYENA REALITY / SHUTTERSTOCK.COM their decision, Dsquared2 was celebrated as a classes (such as 3, 9, 18, 25, 35, etc) in China and special guest at the most important fashion event Trademark no. 3849642 many other countries around the world. in China, Shanghai Fashion Week. Background In the jungle of the trademark system in China, internationally reputed owners and shielded by In late 2011, Bier Bulasi sent several warning where IP owners ght for survival against dubious trademark adjudications. letters to stores selling Dsquared2 goods squatters and counterfeiters, such a decision Reading the rst instance decision, it is clear that originating from the Italian Dsquared2, requiring would not be surprising but for the fact that it TM’642 was not used before 2011 and since then them to stop using the trademark in China. totally overturns the rst instance decision which has been used by Nuohe in exactly the same form had—on the contrary—declared that Dsquared2 as the trademark owned by Dsquared2 (the same In early 2012, as a reaction to the warning letter did not infringe Bier Bulasi’s trademark. sent to retailers, Dsquared2 launched civil litigation logo). Besides using the same logo as the trademark against Bier Bulasi with the Hangzhou Intermediate e trademark ‘Dsquared’ (TM ’642) was registered abroad by Dsquared2, Nuohe also uses People’s Court seeking a declaration of non- led with the Chinese Trade Mark O ce on several elements which are characteristic and link infringement. Moreover, Dsquared2 initiated a December 17, 2003 by an individual named Zhao to Dsquared2: the twin designers’ names, the year second litigation seeking recognition of unfair Ban Hua and registered on February 14, 2007. in which they were born (1964), the Canadian competition because of the use of several elements e mark was subject to several assignments ag, and the entire store decoration. that copy the identity and reputation of Dsquared2 until it reached Zhejiang Nuohe Garment Co (the name of the designers, the Canadian ag, the Ltd. Bier Bulasi was the owner of TM ’642 at Dean and Dan Caten year 1964, the decoration of the stores, the position the time of ling the case. Opposition, non-use In 1964, twin brothers Dean and Dan Caten of the label on the front zip of jeans, etc). cancellation and bad faith cancellation, led by were born in Canada. In the early 1980s they Dsquared2 against TM ’642 at the current stage moved to New York, where they studied and ;OLÄYZ[PUZ[HUJLKLJPZPVU have not succeeded in eliminating the trademark initiated their career in the fashion industry. In from the register. e court recognised that from a visual 1991, they moved to Europe, rst to Italy and perspective TM ’186 is similar to Bier Bulasi’s Nuohe is not free of dark shadows. Besides the later the UK. In 1994 they launched the rst registered trademark TM ’642. ey share suspect Dsquared line of business, Nuohe has Dsquared2 collection in Milan, which soon the same letters in the same order and that is interests in distribution of other fashion brands became famous. Dsquared2 is now present in enough. e court concluded that there is no risk such as Ice Iceberg and CNC. Once again, many countries around the world and worn by of confusion and therefore infringement in light distribution is apparently not authorised by the actors and musicians such as Lenny Kravitz, of the following considerations: 108 World Intellectual Property Review September/October 2014 www.worldipreview.com CASE STUDY to exclude others from using the registered trademark on the approved goods. Our comments • TM ’186 should have been registered and owned by Dsquared2 which had created, launched, used and made it famous rst abroad and then in China. TM ’642 should have been cancelled; • e Zhejiang High People’s Court has not recognised the relevance of the fact that in 2003—the date of ling of TM ’642—TM ’186 was already famous, even if predominantly outside of China. By allowing a company to secure the right only in China, the trademark law allowed unjust separation and created a monopoly wrongly allocated; and “BESIDES USING • e Zhejiang High People’s Court has not THE SAME LOGO AS recognised the relevance of bad faith in using THE TRADEMARK the mark as the rst instance judge, or the fact that the risk of confusion is mainly caused by REGISTERED ABROAD imitation of several elements perpetuated by BY DSQUARED2, the prior registrant. NUOHE ALSO USES Note: e author leads the team of attorneys that SEVERAL ELEMENTS represents Dsquared2 in this case. Q WHICH ARE CHARACTERISTIC AND Fabio Giacopello is a partner of HFG. He can be LINK TO DSQUARED2.” contacted at: [email protected] • Bier Bulasi’s TM ’642 consists of letters with a special font. ere is di erence of overall visual e ect between the two trademarks; • e basic function of a trademark is to distinguish products or services from di erent Top: e Caten brothers appearing at sources. Bier Bulasi did not use the trademark Shanghai Fashion Week exactly as registered, and was acting to create Middle: Dsquared2 storein the Shanghai IFC confusion with others; and Mall, authorised by Dsquared2 Bottom: Hangzhou Dsquared2 store • Dsquared2 had used TM ’186 in China since operated by Nuohe, authorised by Bier Bulasi 2004 and did not intend to seek association with Bier Bulasi’s trademark. Admitted to the Italian Bar, Fabio signs and concluded that there is a risk of confusion Giacopello has substantive experience Unfortunately the court did not accept the and infringement for the following reasons: in IP litigation and anti-counterfeiting in claim based on unfair competition based on Europe and in IP enforcement in China. the reasoning that the (copied) elements are • ‘Dsquared’ is not a regular English word, but He is a member of the anti-counterfeiting not particular names/shapes of famous goods a creation. erefore Bier Bulasi’s trademark committee at INTA; an arbitrator at the (Article 5.2 of the AntiUnfair Competition enjoys high distinctiveness; SHIAC; recommended lawyer by Legal500 Law) as they do not reach and pass the minimum and MIP; winner of ILO Client Choice • Although there is some di erence in the Award 2013 trademark category; notable reputation threshold to be protected as not logo, the overall impression is that the two practitioner by Chambers and Partners; registered distinctive elements. trademarks are similar; and leading IP lawyer 2013 in the ACQ Global Awards in China; IP star by MIP for The second instance decision • e court holds no opinion on how a registered trademark and patents in China in 2014; and e appeal court agreed that from a visual trademark is actually used in the market, the expert of the China IP rights SME helpdesk. perspective there is similarity between the two exclusive right grants the owner the right www.worldipreview.com World Intellectual Property Review September/October 2014 109.

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