CHINA: Supreme Court Highlights Regulator’s Measures in Trade Name Case

Japanese video game giant Bandai Namco was shocked to discover that a local company in Changsha, Hunan, China, had registered BANDAI NAMCO ENTERTAINMENT CO., LTD. as its company name, and was also operating a website for Japanese anime series under its Chinese trademark 万代南宫梦:

Instead of filing a civil lawsuit with the People’s Court, Bandai Namco lodged a complaint with the local Administration for Market Regulation (AMR), which undertakes a broad range of market supervision responsibilities, including business registration, anti-monopoly, product standards and food safety, to ensure and maintain a fair business environment in the marketplace.

Although the AMR has wide powers to supervise local companies, including the power to order a change of company name based on unfair competition and intellectual property (IP) infringement, in practice, most local AMRs are hesitant to do so.

In this case, however, the Changsha AMR quickly held a formal administrative hearing attended by both sides, where it noted (i) the complainant’s international reputation in its brand name and company name; (ii) the unfair use and passing off by the respondent; and (iii) the likelihood of public confusion. It made a ruling within three months in favor of the complainant, ordering the local company to change its name within 30 days. The decision was made public during China IP Week in April.

The process is very time efficient, and hence cost-saving, compared to going to the People’s Court, which usually takes one to two years to reach a judicial ruling. The Changsha Intermediate Court subsequently confirmed the AMR’s decision.

Furthermore, in recognition of this swift and resolute decision, the Supreme Court selected this case as one of the 10 landmark cases for administrative market regulation in 2024.

With such endorsement by the Supreme Court, international brand owners are given an additional option to speedily enforce their IP rights in China, while the civil litigation route remains a useful tool for seeking financial compensation.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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