1. Theoretical basis and development for the protection of corporate names

In China, a “corporate name” in strict legal sense refers to the full name of a business. According to Article 9 of Measures for the Implementation of Administration of Enterprise Name Registration, “a corporate name shall be composed of administrative region, the business name, trade and organizational form in proper order.” It is obviously that the business name is the core of all parts of corporate name because of its greatest distinctiveness of all components and being the part from which disputes arise at first. As far as international practice is concerned, the Article 1(2) of the Paris Convention treats trade name, patent, trademark and others as the objects for industrial property protection. Article 8 of the Paris Convention provides that “a trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark.” Therefore, China should protect foreign corporate names without requirement of registration. Protection should be given to the objects used in reality and it usually takes the form of business name in practice.

The business name is by nature an identifier of market player. However, it is different from that for a natural person in essence in that it originates from business operation and can be assigned. The mainstream views have agreed on the property nature of corporate names (business identity). The Provisions on the Cause of Action in Civil Cases promulgated by the Supreme People’s Court will include disputes related to enterprise name in the category of “intellectual property and competition dispute.”

It should be noted that China has had no specific legislation as yet for business name protection, that clearly defines infringement of a business’ right to its name. Currently, China’s courts apply anti-unfair competition law to business name protection and the understanding of such infringement needs to be continuously improved from judicial practice. By an analogy of other commercial signs, there are at least two kinds of infringements upon business name: the first is counterfeit, which is the most direct and serious infringement and is usually taking the form of counterfeit of others’ goods, trademark, packaging and so on instead of rare counterfeit of other’s business name; the second is the use of another’s business name without prior authorization, which is more difficult to ascertain and the key for judgment in practice is how to determine the “use,” the similarity in business name, and the subjective bad faith of the accused infringer etc.

It can be seen from practice that early typical cases in this regard were mainly disputes of counterfeit. For example, in the typical case of Harbin Magnetizer Factory v. Gaochun County Lights Co., Nanjing Dongfang Glass Head Factory, Nanjing Yuedong Industry Co., and Kunming Cultural Supplies Co., the acts of defendants constituted the counterfeit of plaintiff’s patent, registered trade mark and business name. It is easy to determine and crack down on such infringement because it is not common to see Faker’s false representation of Maker in reality. In contrast, it is more often to see infringement in the form of free rider. In terms of the right to corporate name, its value is just embodied in and increased by the way of its conflicts with registered trademark in a relatively long period.

II. Legal foundation for judicial protection of foreign corporate name

Broadly speaking, foreign business protection in China relates to two types of situation. One is recordation per government procedures for a foreign business that has been registered for incorporating a local branch or a joint venture which carries its business name; the other is unregistered use of business name in commerce in China. The former, which is just like any domestic business, and is governed by corporation regulations, enjoys general protection under the laws; it is the latter, however, worthy of protection, that is in question, which deserves a closer look.

China is a member country of the Paris Convention which is binding authority in China. Consequently, the provisions of the Convention may be relied on in the absence of corresponding domestic legislation, which frequently occurs when a foreign business seeks protection of its name. Problem is that the Convention merely provides broad principles without specifics, which needs to be worked out into domestic laws, because all intellectual property rights are territorial. Many countries, China included, have no particular laws governing the use of business names. In China, Article 5 (3) of Anti-unfair Competition Law prohibits a business operator from unauthorized use of another business’ or individual’s name for passing-off. Moreover, The Interpretation of the Supreme People's Court on Some Matters about the Application of Law in the Trial of Civil Cases Involving Unfair Competition (“The Interpretation”) specifies that “a name of any enterprise registered by the enterprise registration competent authority, or a name of any foreign enterprise used within the territory of China for commercial use shall be ascertained as an enterprise name as stipulated in Article 5 (3) of the Anti-unfair Competition Law. A business name in the name of enterprise that has certain market popularity and is acknowledged by the public concerned may be ascertained as an enterprise name as stipulated in Article 5 (3) of the Anti-unfair Competition Law.” The above can be understood as China’s compliance with the obligations under the Paris Convention through legislation and judicial interpretation for a further regulation of enterprise name protection.

III. Elements for protection for Chinese translation of foreign business names

In order to be given legal protection in China, foreign business name should be used within the territory of China for commercial use and it is usually be used in foreign language and Chinese translation together. A foreign business may of course prohibit others from deceptive or misleading use of its foreign language name if such a name has attained certain reputation in China; the problem is rare, however, over simple foreign business names since most business activities have to be done in Chinese language. It becomes problematic when a foreign business uses a Chinese equivalent, either alone or along with its foreign counterpart, of its business name. How should the business names, and the business names in Chinese, in particular, be treated in relation to their foreign language names, so as to accord proper protection?

In Woodhead International Pty. Ltd. v. Shanghai Werkhart International Architectural Design Consulting Co., Ltd. et al. involving unfair competition, the plaintiff is an Australian company engaged in architectural design and transliterated its corporate name of “WOODHEAD FIRTH LEE”

into “五合富麗” (WuheFuli) in Chinese. In 1999, the plaintiff used a Chinese equivalent “五合國際建筑 設計集團” (WuheGuojiJianzhuShejiJituan, Werkhart International Architectural Design Group) in the corporate seal, and continued to use the seal in such way in the ensuing years. The defendant was incorporated in 2001 and its chief consultant, a Liu, worked at one time with plaintiff’s business in China. The plaintiff contended that the defendant deliberately confused itself with plaintiff by way of using “Wuhe” and “WuheGuoji,” in order to cause mislead the public, which had constituted infringement upon the plaintiff’s right to corporate name.

The focus of the above case is whether the business name in Chinese is eligible for protection. Just as the right of a natural person to his or her name, a business name with legal significance should be unique. It is necessary for a transnational corporation to use its business name in relevant translation for the interest of consumers and market order and this should not be regarded as using several business names. The translation of a business name should satisfy some requirements for legal protection. Otherwise, it would misappropriate resources in public domain and thus harm the public interest. Take the foregoing case for example. “WOODHEAD” can be translated into Chinese such as “five together,” “wood,” “five,” “Wu together” etc. It is inappropriate for the plaintiff to monopolize all the possible Chinese translations of WOODHEAD. The author thinks that the legal protection for Chinese equivalent of a foreign corporate name not only depends on its being used in practice, but also meets the following criteria:

Firstly, the Chinese equivalent should be so distinctive as to be distinguishable, namely, it can distinguish an enterprise from other businesses. It is the distinctiveness that makes it possible for consumers to connect it with a specific business operator and that can cause misidentification or confusion when shop name is used without prior authorization. For a Chinese translation of corporate name, the first step to be distinguishable is to choose unique Chinese characters to make it specific, which is not yet sufficiently entitled to legal protection. In practice, the majority of overseas shop names are translated into Chinese homonym. If such translated text has no meaning of other ordinary characters in Chinese, it shall be ascertained as a sole representation of such enterprise and meet the requirement of distinctiveness. Examples in this regard include 諾基亞, the Chinese translation of Nokia, 柯達 of Kodak, and 索尼of Sony, etc. In fact, the level of distinctiveness is closely related to the reputation of the shop name. A famous business name usually represents a higher goodwill, which enables consumers to connect it with specific business operator and thus be so distinctive as to be distinguishable.

Secondly, there should be a characteristic of correspondence, uniqueness and consistancy between the original shop name and its Chinese translation. By correspondence, the original business name should be consistent with its Chinese equivalent in transliteration or translation. Otherwise, such Chinese translation would be arbitrary. By uniqueness, the obligee shall use one corresponding Chinese translation of its foreign business name, and should not use several translations at the same time. Otherwise, it will be difficult for consumers to connect different translations with the obligee. By consistancy, the obligee should consistantly use such Chinese translation instead of accidental use, and should not alter such translation at will.

The plaintiff in the said case has been basically certain of 五合, the Chinese translation of its corporate name “WOODHEAD” and continuously used it for a period of time. It has acquired certain reputation in the industry which makes 五合 acknowledged by the public concerned, thus, it should be ascertained as having met the foregoing requirements. However, the issue of whether the defendant’s acts constitute an infringement should be determined by whether it is used without prior authorization, whether such use has caused misidentification or confusion among consumers and whether the plaintiff had subjective malice. The defendant in the foresaid case filed an appeal against the first instance judgment and the case was concluded by mediation in second instance procedure.