Admissibility of Market Survey in Trademark Cases

Author: Hairuo Zhang

Market survey evidence was rarely adduced in trademark cases due to high cost, supposedly inherently unreliability and uncertain admissibility by China court. But China Supreme Court and Beijing High Court have gradually made clear that certain market survey evidence can be used as evidence in court. We also saw more and more trademark court decisions where the court admitted market survey evidence in complex and high-stake trademark cases.

Court Guide:

According to Guidelines for the Trial of Trademark Right Granting and Verification Cases issued by Beijing High Court issued in 2019 (hereinafter refer to as“2019 Beijing High Court Guide”), there are two articles involving market survey evidence/market research report.

- Article 15.5:“A party concerned may submit the market research reports to prove that both the trademark in dispute and the reference trademark are dissimilar with each other, but these reports lacking the truthfulness and science basis may not be accepted.”
- Article 19.1: “if a party concerned claims that the trademark in dispute becomes a generic name of the goods, it may prove its claim by submitting the evidence such as…… market research report…..”.

Except for proving trademark dissimilarity and generalization of trademarks, in judicial practice, parties used market survey evidence to establish various issues such as likelihood of confusion, acquired distinctiveness and secondary meaning, etc.

China Supreme Court Case: Michael Jordan Case[i]

In the trademark dispute over the Chinese translation of Michael Jordan"s name, Qiaodan, China Supreme Court ruled in favor of Michael Jordan against a local sportswear company, putting an end to an eight-year trademark battle.

In that case, the China Supreme Court accepted market survey evidence adduced by Jordan’s side, aiming to prove that most consumers interviewed related Jordan’s name in Chinese characters with Michael Jordan rather than with the local sportswear company, and most consumers interviewed was confused about whether the local sportswear company is sponsored, affiliated, or associated with Michael Jordan.

In the China Supreme Court’s decision, the court admitted the market survey evidence due to following reasons:

(1) The entire course of market survey has been notarized by local pubic notary who can attest to the authenticity of the entire process. Hence, the authenticity of the market search reports is relatively high;

(2) Since the focal issue in this case is regarding the relevant public’s cognition on the mark in dispute, an objective, fair, standardized and transparent market survey could help the court to better understand the relevant public’s perception over the mark in dispute;

(3) The market survey was conducted in 5 cities, using qualified interviewers who followed proper procedure, and obtained a fair sample.

Based upon the above, the court found that the authenticity and probative value of the market survey evidence is relatively high, and it can be used to prove Jordan’s argument in combination of other evidence presented in this case.

Beijing Higher Court Case: Mocha case[ii]

In the trademark generalization case regarding registered trademark “Mocha” in Chinese characters, Beijing Higher Court found that the registered trademark “Mocha” in Chinese characters became a generic term to describe certain type of coffee. In its decision, the court admitted a market survey evidence due to following reasons:

(1) The entire course of market survey has been notarized by local pubic notary who can attest to the authenticity of the entire process. Hence, the authenticity of the market search reports is relatively high;

(2) The market survey was conducted in 6 cities, using qualified interviewers who followed proper procedure, and obtained a fair sample (200 questionnaires in each city);

(3) The conclusion of search report shows that around 90% of interviewees think “Mocha” in Chinese characters is a type of coffee and when asking about “Mocha coffee”, they relate it with various brands such as Starbucks, Nestle, Blue Mountain, Pacific, Costa, etc., instead of linking it with a specific source.

Based upon the above, the court admitted the market survey evidence. Based upon the survey evidence and other evidence submitted, the court found that the registered trademark “Mocha” in Chinese characters already became a generic term and should be canceled.

Conclusion:

Nowadays, market survey evidence is more frequently used in complex cases than in the past. Despite the above two decisions which have admitted market survey evidence, we also notice that there are other failure cases that market search reports were excluded due to flaws in the interview procedures, or insufficiency of samples obtained. There are also failure cases where the court interpreted the statistics in the report differently which is unfavorable to the presenter under its discretionary powers.

To ensure the statistic is reliable, in those decisions that the court admitted market survey as evidence, the surveys were conducted in 5-6 cities with around1,000 valid questionnaires on average. To enhance the possibility of being admitted by the court, when conducting the survey, attorneys need to carefully frame the questions relevant while non-leading and interviewing the right people who can produce relevant result.

[i] No. [(2016)Zui Gao Fa Xing Zai 27 Hao]
[ii] No. [(2020)Jing Xing Zhong 2540 Hao]

Associate Da Liu also contributed to this article