"It's my company name, why can't I use it?" This was the frustrated and confused reaction of Mr. Wang, owner of "Shanghai XX Technology Co., Ltd.", after receiving a cease-and-desist letter. He had used his company's abbreviated name in marketing for years, only to be sued by an out-of-town company holding the "XX" trademark, demanding compensation and a name change.
Mr. Wang's predicament is not unique. From early disputes like "Shenzhen Ellassay" vs. "Beijing Ellassay" to the increasing number of similar cases today, these conflicts serve as a stark warning: a legally registered company name (trade name) does not automatically grant an all-encompassing right to use that name freely in commerce. Improper use can constitute trademark infringement.
Today, we clarify the conflict between trade names and trademarks.
1. The Relationship Between Trade Names and Trademarks
First, it's essential to understand what trade names and trademarks are.
Trade Name (商号): Commonly known as the "company name," e.g., "Alibaba (China) Co., Ltd." It is registered with the local Administration for Market Regulation (AMR) and primarily identifies a business entity. Its protection is limited geographically and by industry.
Trademark (商标): A sign used to distinguish goods or services, e.g., the brand name "Alibaba." It is registered with the China National Intellectual Property Administration (CNIPA) and enjoys nationwide protection for specific classes of goods/services.
In short: A trade name identifies "who the company is," while a trademark identifies "the source of the goods/services."
Ideally, a company's core trade name and its primary trademark should be consistent, building a unified brand identity. However, conflicts arise when they belong to different entities.
2. When Does Use of a Trade Name Constitute Infringement?
Article 58 of the Chinese Trademark Law states: "Using another party's registered trademark or unregistered well-known trademark as a trade name in one's enterprise name, which misleads the public and constitutes an act of unfair competition, shall be handled in accordance with the Anti-Unfair Competition Law of the People's Republic of China."
This means that even if your company name is legally registered, if its commercial use "clashes" with a prior registered trademark and is likely to cause public confusion, it may be considered infringement.
The key lies in two concepts: "Prominent Use" and "Confusion."
2.1 "Prominent Use" of the Trade Name is a Primary Form of Infringement
This is the most common and typical scenario in judicial practice.
Compliant Use: Using the full, official company name in its entirety on contracts, invoices, office signage, etc. (e.g., "Shanghai ABC Trading Co., Ltd.").
Infringing Use: Using the core part of the name (e.g., "ABC") separately and prominently on product packaging, advertisements, website headers, or e-storefronts, while minimizing or omitting other elements like "Shanghai" or "Trading Co., Ltd." This use essentially functions as a trademark. If "ABC" is already a registered trademark owned by another, it can easily lead to consumer confusion and constitute trademark infringement.
Case Example: In a Supreme People's Court guiding case, a company owning the "Gree" (格力) trademark successfully sued another company that had prominently used "Gree" from its trade name on air conditioning products, which was deemed infringement.
2.2 Even Standard Use of the Full Name May Constitute "Unfair Competition"
Is using the full company name everywhere completely safe? Not necessarily.
If a prior trademark has a certain reputation, and you registered the identical or similar text as your trade name, even standard use of your full company name can be deemed unfair competition if it's done with an intent to "free-ride" on the established goodwill ("搭便车") and is objectively likely to cause market confusion.
Case Example (Adapted): Company A was the owner of a well-known registered trademark in the jewelry industry. Store B, a franchisee of "Hong Kong [Identical Name] Gold & Diamond Jewelry Group Co., Ltd.", used signage stating "[Identical Name] Hong Kong Gold & Diamond Jewelry Franchise Store" prominently on its storefront. The core trade name was identical to Company A's well-known trademark. The court held that this constituted unfair competition, as it was likely to cause the public to believe Store B was affiliated with or franchised by Company A.
3. How to Mitigate the Risk
It's never too late to strengthen your IP strategy. Companies must adopt a forward-thinking approach to trademarks from the outset.
3.1 File Trademarks First, Before Fully Leveraging the Brand.
Immediately after deciding on a company name, apply to register the core text of the trade name (and corresponding English/logo versions) as a trademark in the classes relevant to your core business. Consider multi-class and defensive registration to build a robust brand protection strategy. This is the most cost-effective form of protection.
3.2 Conduct a Thorough Trademark Search Before Registration.
Before applying to the AMR for company name approval, search the CNIPA trademark database. Check if others have already registered identical or similar trademarks for the core name you intend to use, particularly in your industry.
3.3 Use Your Name Properly and Avoid "Prominent Use."
In commercial activities, use your full company name formally. If you must use an abbreviation, ensure it does not conflict with prior registered trademark rights. On store signs and packaging, consider using your full company name alongside your own registered brand trademark.
The business world is competitive, and intellectual property is the invisible battlefield. A company name is not just a legal identity but the core of your brand assets.
Remember: A business registration certificate is not a bulletproof vest against trademark infringement claims. Only by integrating trademark strategy from the very beginning, achieving unified planning of trade names and trademarks, can your brand navigate the market safely and avoid costly legal disputes.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific legal concerns regarding trademarks and trade names, please consult with a qualified intellectual property attorney.
Case Summaries
Case 1: Jewelry Store (Unfair Competition)
The key issue was whether a jewelry store's use of "[Identical Name] Hong Kong Gold & Diamond Jewelry Franchise Store" constituted unfair competition. The court found that the core trade name "[Identical Name]" was identical to a prior well-known trademark owned by another company in the jewelry industry. As a market participant, the store had a duty to avoid causing confusion. The prominent use of the name, even in the context of a franchise relationship with a different Hong Kong-based entity, was likely to lead the public to believe there was an association with the well-known trademark owner. The store's defense—that it had reviewed its franchisor's IP documentation—was insufficient, as the provided trademarks were either irrelevant or registered in inapplicable classes. The court emphasized that license to use a trade name does not override third-party trademark rights.
Case 2: Gree vs. Midea ("五谷丰登" - Bountiful Harvest)
Gree owned the registered word trademark "五谷丰登" for Class 11 goods, including air conditioners. Midea used a composite logo on air conditioners where the dominant element was the stylized words "五谷丰登," accompanied by decorative elements. While the court noted the visual differences and corrected a lower court's finding of identicality, it ruled the marks were similar. The key factors were:
1. Goods: Both were used on air conditioners (identical goods).
2. Marks: The words "五谷丰登" were the most distinctive part of Midea's logo. Their sequence, pronunciation, and meaning were identical to Gree's trademark.
3. Confusion & Harm: Midea's prominent use of the mark on products and online could lead the public to associate "五谷丰登" with Midea. This could sever the link between Gree's trademark and its goods, potentially causing reverse confusion where consumers might think Gree was infringing Midea's rights. This harmed Gree's trademark rights and the foundation of the trademark system.
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