[Jian Xu] Importance of third-party neutral evidence for proving trade mark use/reputation in China - Comment on Nestle's 3D mark of bottle on food flavours

In order to effectively register and enforce a 3D trade mark in China, the applicant usually has to rely on acquired distinctiveness for the mark rather than inherent distinctiveness (please also see my previous post on inherent distinctiveness for 3D trade marks in China). To prove acquired acquired distinctiveness, the applicant needs to show extensive use/reputation of the 3D mark in China. However, what will the standard for the “extensiveness” of the evidence, and what kind of evidence are usually effective in China. A recent Beijing court decision on Nestle’s 3D trade mark gives light to those questions.

Nestle filed a 3D trade mark (International Registration No. 640537) on food flavours in 2002, which is a bottle for containing the food flavours (picture of the mark below). Although the mark is registered, a competitor in the food flavour industry, Master (under the group of Heinz) seeks to cancel the registered 3D mark. In the Beijing court decision, the judges elaborated on the issue of (a) inherent distinctiveness, (b) acquired distinctiveness, as well as (c) aesthetic functionality for 3D trade marks. This article focuses on the criteria of acquired distinctiveness and its related evidence presentation.

The Beijing court laid out the principle that, to prove acquired distinctiveness for 3D marks, the criteria can be similar to the proof of recognising well-known trade marks. This is because, the “inherent value” of a 3D sign is very strong, so that consumers will normally perceive them as the shape/packaging of the product, rather than recognising its “identification value” (i.e. to identify the source of product). To overcome the perception of inherent value and re-focus on the identification value, high reputation of the 3D sign are needed for consumers to associate it with the producer. Hence, a high level of use/reputation similar to well-known trade marks is required for proving acquired distinctiveness of 3D marks.

Nestle submitted a series of evidence in this connection for proving acquired distinctiveness, and the court commented on them. It is useful to look at the court’s comments to know that almost only third-party neutral evidence is acceptable in China court. For example:

Nestle’s evidence 10 relates to the volume of production and volume of sales of the MAGGI bottle above. The court commented that they are evidence produced by Nestle itself with no additional supportive evidence, and there are labels on the evidence saying that “excluding China”. They are not relevant.

Nestle’s evidence 16 is the tax and audit report of its Chinese subsidiary. The court commented that the report states that the Chinese subsidiary mainly engage in coffee and related products, so this is not relevant to the registered goods of the subject mark which are food flavours.

Nestle’s evidence 21 is the promotional materials of the company for the product. Again, the court does not accept its truthfulness as it is made by Nestle itself with no other supportive evidence.

It is quite common, and easier, for the right holder to produce large volumes of documents on use of the brand in the company's internal records and communications. However, it is clear that, under current practice, such evidence has little chance to be taken seriously by the Chinese court. It is therefore, as a general rule, to direct more attention on finding third party neutral evidence, ideally media reports, to prove use/reputation in China.