Decade-long QQ trademark dispute receives final verdict

Chinese automaker Chery has prevailed against China's biggest social media company Tencent, after a decade-long wrangle over the ownership of the trademark QQ for use in vehicles.

The Beijing Higher People's Court gave a final verdict in mid-September, which upheld a ruling by the Trademark Appeal Board and ordered the Shenzhen-based Internet giant to withdraw its registration of the trademark for vehicles.

For years Tencent has been widely known for its online instant messaging tool QQ. At the same time, sales of Chery's QQ model surpassed the 1-million benchmark in early 2013, Chinese media reported.

The saga between the two domestic brands started in March 2003, when Chery filed a QQ trademark application for its automobiles, just a couple of months before its first batch of QQ models rolled out to market.

The name is partially because of the design of the car's taillights, which look like the English letter Q, according to the carmaker.

Tencent challenged the filing and claimed that it had QQ as a registered trademark for services in information transfer and computer end-user communication since 2001. The company said after years of promotion, the number of its QQ users surpassed 200 million in 2003, which helped it earn the well-known trademark status.

Later, Chery gained the trademark from its affiliated company Wuhu Chery Technology Co Ltd, which had a successful filing for automobiles.

Tencent was determined to secure the trademark in the auto world and its efforts appeared to pay off when its filing for vehicles was granted in 2008.

However, a few years later the registration was withdrawn by the Trademark Appeal Board at the request of Chery.

As a result, the dotcom filed a trademark complaint against the board with the Beijing No 1 Intermediate People's Court last year.

The attorney representing the carmaker, the third party in court, told the court that China had a strict market access system for auto production and sales. Without related industry background, a company cannot get qualifications for making autos, according to the industry policies.

"We have paid a lot for advertising our QQ model on Tencent's website", which shows the dotcom's "willing acquiescence to this situation, with knowledge", said the attorney for Chery.

Tencent said its sales reached 900 million yuan ($146.59 million) in 2003 and it tried to register its trademarks in various sectors for the purpose of defense. The company added that the move for vehicles this time was an extension of its well-known QQ trademark registration worldwide and was justified.

Tencent also alleged in court that Chery used the influence of QQ and its well-known logo penguin image for promotions, which "infringed on its trademark rights".

The court found that Tencent established a reputation in the telecommunication service domain, but this could not be extended to the auto sector, even if it was merely as a defensive registration. The court said it should also show respect to the prior legal rights of others.

After the ruling went in favor of the defendant, Tencent lodged an appeal with the higher court, which again upheld the board's decision.

The court ruled that there was a marked difference between auto products and telecommunication services. The court said Tencent should have known that Chery enjoyed a certain reputation in the auto field when it filed the trademark application, and thus needed to avoid the prior rights.

Ma Qiang, a partner of Beijing-based law firm Junhe, noted another issue in the case in an interview with China Daily. He said that a trademark like QQ, which is made up of duplicate letters, stands little chance of getting approval, due to the shortage of "inherent distinctiveness" in line with the essence of trademark laws.

"Unless the filers can prove in the later review stage that the simple letters have acquired distinctiveness after long use, they can seldom be given green light as a trademark," Ma said.

So a common practice to get around the rule is to combine the letters with graphics or other words and apply for a trademark with the package, he added.

"When we talk about whether a trademark is similar to or identical with another, we need to consider the trademark package as a whole, rather than part of it," Ma said.

In addition to the distinctiveness of the trademark itself, the relevance in products and services concerned, and the similarities of the trademarks in issue also need to be factored into the judgment, he said. "According to the judicial policies issued by the Supreme People's Court, courts shall identify the border of trademark rights and maintain the already established market order, if the brands cater to different groups."

"Without relevance in essence, the court must have considered they won't have a misleading effect on consumers or users," Ma said.

In response to the higher court's ruling, Tencent said in a statement that as a popular trademark, QQ gained wide acceptance in graphics, pronunciation and branding.

It will continue efforts in protecting its brand image and interest, no matter how tough the path to maintaining its brand may be, the statement said.