The Trademark Fight for a Likely Chinese Equivalent of "Monster"

Zhang Ying

Senior Partner, JINCHENG TONGDA & NEAL

The brand owner of "MONSTER ENERGY" in China , Monster Energy Company (Monster Energy) has recently been involved in a trademark fight for a likely Chinese equivalent of "Monster" in China with a domestic Chinese company. The dispute came to attention with a ruling made by one of the three intellectual property courts in China, the Beijing Intellectual Property Court (BIPC). A domestic Chinese company called Shanghai Man Si Te Company (ManSiTe) is the registrant for the Chinese mark No.3051352 "" (pronounced as "Guai Shou", one of the corresponding Chinese equivalents of the English word "Monster", hereinafter referred to as "Guai Shou Chinese Mark") for "beverages, water, etc." Monster Energy filed with the Trademark Office (TMO) an application for cancelling the "" mark based on non-use for three consecutive years. Both the TMO and the Trademark Review Adjudication Board (TRAB)1 determines to maintain the registration of the "" mark. Subsequently, Monster Energy filed a petition for judicial review on the TRAB ruling with the BIPC.2 On December 28, 2017, the BIPC issued a verdict holding that the registration of "" mark shall be cancelled based on the following findings:

1. ManSiTe produced evidence of actual use to demonstrate that ManSiTe actually used the "" mark with regard to the designated goods. However, the evidence that ManSiTe submitted with BIPC reveals that ManSiTe actually uses another mark "" (Guai Shou Chinese with Lightning with the Chinese Guai) for the designated goods;

    

2. The "" mark is different from the "" mark since the former one has a lightning device which distinguishes the above two marks, although the two marks have same pronunciation and meaning;

    

   (3)More importantly, the "" mark is another mark that ManSiTe applied for registration in the same Class 32; all the evidence of actual use that ManSiTe has submitted with the BIPC demonstrates that ManSiTe actually uses the "" mark in commerce, instead of "".

    

   Therefore, the actual use of the "" mark shall not be considered as actual use of the "" mark. It is reported that ManSiTe has appealed the BIPC's ruling with the higher court.

    

   (4)This case received extensive attention from brand owners and trademark practitioners, largely owing to the big name, the Coca-Cola Company("Coca-Cola"), behind the owner of "" and "" and the popularity of the brands. When a foreign brand enters into China, usually the brand shall have a Chinese name. For the brand "Monster", "怪兽 (Guai Shou)" seems to be one of the most suitable Chinese equivalents. However, the Chinese company ManSiTe has registered the Chinese name for similar goods under the same Class that "Monster" has been used for years; the Chinese company has even used the Chinese on packaging of "vitamin fruit drink" beverages. Will Monster Energy be forced to change the Chinese name, will use of the "Monster" mark infringe the trademark right of the Chinese marks "" and ""? The author spots that there are already several trademark disputes between Monster Energy and ManSiTe. Along with studying these trademark disputes, the author analyzes how these two companies may use their marks in dispute before all the disputes come to a conclusion; the author also predicts the possible outcome of the trademark battle between the two companies.

    

1. About the two companies and their marks

1. Monster Energy and its marks

1. About Monster Energy

   In 2002, Hansen Natural Corp. created the brand "Monster Energy", and the brand quickly developed into a full competitor with Red Bull for years. In June 2015, Coca-Cola acquired 16.7% of the Monster's shares. In the meantime, Monster Energy merged its nonfunctional beverage division with Coca-Cola while the functional beverage division of Coca-Cola merged into Monster Energy.

    

   Not until Monster Energy entered into China in 2016, the company was aware that ManSiTe has already registered "", the "Guai Shou Chinese", as its mark for International Classification 32 for "beverages, water, etc." While Monster Energy first used "Monster" as its trademark for beverages and drinks, ManSiTe registered the Chinese equivalent of "Monster" as its trademark for similar products. We believe it is hard for Monster Energy to obtain the registration of the "Guai Shou Chinese"; but on the other hand, Monster Energy does not necessarily use the "Guai Shou Chinese" as its Chinese brand name.

    

2. About Monster Energy's marks

   In accordance with the trademark records from the USPTO, the first use of the marks "", "" and "" in commerce dates back to April 18, 2002. Therefore, it is reasonable to conclude that large numbers of Chinese consumers already knew the brand "Monster" long before the "Monster Energy" branded beverages were launched to the market in China.

    

   In China, Monster Energy filed an application for registering the mark "" in Class 32 on October 27, 2005. From then on, Monster Energy successively applied for registering a series of marks, including "", "", "", "MONSTER ENERGY", "" , "" and "" for beverages in Class 32; all the above-mentioned marks have been approved for registration.

    

   Besides the above, Monster Energy also filed applications for registering the device mark "", in red, green, yellow and blue colors respectively, in Class 32. In the author's view, the device mark "" is as important as the "MONSTER" mark, and the device is also a fantastic mark for at least two reasons. First, this device mark can be easily pronounced as "M" device and "M" represents the initial letter of the word "MONSTER"; so the device can be recognized as the "Monster Device", which is closely associated with "Monster". Secondly, the device also looks like a claw, which enables the device mark to be recognized as a creative design; for a device mark, chances of being incidentally similar to other design is comparatively small. The author noticed that, since July 2014, Monster Energy filed a large number of applications for registering the Chinese word mark "魔爪", which means "claw of monster" and pronounces as "MO ZHUA" ("Mo Zhua Chinese Mark"); the applications for "魔爪" mark in Class 32 have been approved for registration. Now, Monster Energy uses the "魔爪" mark to advertise and promote its products on its Chinese official website as well as for other marketing activities. The "魔爪" mark is a suitable Chinese name for "MONSTER". The Chinese "魔爪" vividly describes the shape of the device "", and its phonetic alphabets also starts with "M". Considering the inherent connection between the "魔爪" mark and the "" device mark, it is predictable that the use and advertisement of "魔爪" mark will soon enable the Chinese public to associate the "魔爪" mark with Monster Energy and its "" device.

    

   As for the Chinese equivalent of "Monster", "怪兽 (Guai Shou)", Monster Energy did file an application for registering the Chinese equivalent in Class 32. The Trademark Office rejected the application, and the application is under appeal for review on rejection. Monster Energy then applied for registering another Chinese equivalent of "Monster", "怪物" (read as "GUAI WU") and "怪物能量" (with pronunciation "Guai Wu Neng Liang" and meaning "Monster Energy"); these applications have not been approved for registration so far.

    

   In accordance with the database of the TMO by the end of January 2018, Monster Energy has registered more than 40 trademarks in Class 32, including variations of "MONSTER ENERGY", "MONSTER", "" device mark and "魔爪" mark.

    

    2. About ManSiTe and its Guai Shou Chinese mark

ManSiTe, the registrant for "" in Class 32, was founded on February 24, 2014. The "" mark had been registered by a company in Nanjing, and then the mark was assigned to another company before it is finally transferred to ManSiTe.

As mentioned in the beginning of this article, apart from the "" mark, ManSiTe filed an application for registering "" in Class 32. And then the company acquired and filed applications for registering "MONSTER", "MONSTROSITY", "怪兽MONSTROSITY" and "怪兽ENERGY" in Class 32 successively. These applications have either been rejected or opposed from registration. Additionally, ManSiTe filed an application for registering the Chinese "怪兽魔爪" in Class 32, which means "Monster Claw" and reads as "Guai Shou Mo Zhua", on November 24, 2016; the application is now under appeal for review on rejection. Furthermore, ManSiTe registered "" and "" device marks in Class 32. It is doubtable that the device marks imitate the device  that Monster Energy adopts on the packaging of its products that are currently distributed in China.

Does ManSiTe register the abovementioned marks by accident or on purpose? The above-mentioned BIPC's verdict mentions that Monster Energy had adduced some news reports showing that the legal representative of ManSiTe used to work for Red Bull, who also manufactures functional beverages in China. The BIPC does not make any comments on the evidence. However, the author found two articles mentioning that the legal representative used to be general manager of Red Bull Shanghai Company from 2003 to 2013. If the facts mentioned by the above reports are true, the legal representative of ManSiTe shall clearly know the functional beverage industry and all rivals of Red Bull. The aforesaid trademark applications and registrations for the Chinese "怪兽魔爪(Monster Claws)", "怪兽MONSTROSITY (Guai Shou Monster)", "怪兽ENERGY (Guai Shou Energy)", "" and "" might be an imitation for mixture of "Monster", "Monster Energy", "", and "" that Monster Energy has registered and used in commerce.

1. Forecast for the trademark disputes between the two companies

   Both Monster Energy and ManSiTe filed applications to register "MONSTER", "Monster Energy" and the corresponding Chinese equivalent "怪兽" and "怪兽能量". Among these trademark applications, senior registrations/applications for registration blocked junior applications of each party. Disputes between Monster Energy and ManSiTe has expanded to two civil lawsuits for trademark infringement and unfair competition in Shanghai. Both cases are on trial.

    

   How will the trademark battle between the two companies develop and proceed? The author holds that:

    

1. It is difficult to invalidate the trademark registrations "MONSTER" and "MONSTER ENERGY" of Monster Energy;

    

2. Monster Energy can use the "魔爪" and "魔爪能量" marks to avoid the legal risk of a trademark infringing claim for using the "怪兽" mark;

    

3. It is not a straightforward case if Monster Energy claims trademark infringement against ManSiTe;

    

   (4)The trademark disputes will continue, the Guai Shou Chinese, "怪兽", is more important to ManSiTe than to Monster Energy.

    

   Why? Here is the author's detailed analysis.

    

4. Analysis on stability of the trademark registrations of the two companies

1. The marks of Monster Energy

   Monster Energy obtained the registration of "MONSTER", "MONSTER ENERGY", "" and "魔爪" in Class 32 in China; the company is using these marks in China. Monster Energy used and registered "MONSTER" and "Monster Energy" in the US since 2002, bringing fame and influence for these marks. Although ManSiTe may file a request to invalidate these registered marks in China based on its prior registration of "" mark, given that the Chinese trademark registrations are usually given broad coverage of protection than foreign word mark registrations [3], the chances of success for the Monster case is not high because ManSiTe will have a heavy burden of prove to demonstrate (i) the fame of its prior Chinese registration of ""; (ii) the exclusive connection between "" and "MONSTER", namely, the Chinese and the English are the only corresponding translation of each other; (iii) Monster Energy's bad faith in registering the marks; and (iv) the likelihood of confusion as to the sources of products bearing "MONSTER ENERGY" and "". ManSiTe seems unable to prove the above facts.

    

2. The marks of ManSiTe

   The chance of success for ManSiTe to register the English word mark "MONSTER" is very low due to the prior registration of "Monster" by Monster Energy. At present, the most important mark for ManSiTe is the Chinese word mark "" and "" rather than "MONSTER". Will ManSiTe be able to maintain the registration of "" mark that the BIPC has ruled for cancellation but is now under appeal for review by the higher court? In accordance with the BIPC's verdict, the mark that ManSiTe actually used in commerce is "", so ManSiTe may lose its Chinese registration "" later. Moreover, the author discovers that Monster Energy has an earlier application for the Chinese "怪物" (another Chinese equivalent of "Monster" that is pronounced as "Guai Wu") than the application for "". Due to the similar connotations of "怪物" and "", the mark "怪物" may block the "" mark from registration.

    

   The author further spots that a third party has filed an application for invalidating ManSiTe's trademark registrations "" and "", and the author guesses that the petitioner for the invalidation action is very likely to be Monster Energy.

    

1. Assessment of the risk of use of marks in commerce and risk of a trademark infringement claim

   Apart from the risks that its trademarks might be opposed or invalidated from registration, the two companies also need to evaluate how they should use their marks, registered or not registered, and whether any use of a mark in commerce will incur a trademark infringement or unfair competition claim.

    

1. For Monster Energy

   Since Monster Energy has registered the English word mark "MONSTER" and the device mark "", if the company continues using the above trademarks and packaging and ManSiTe files a trademark infringement claim based on its prior registration of "", the chances for ManSiTe to obtain a court ruling affirming infringement is not high. In accordance with the judicial interpretation of the Supreme People's Court of China ("SPC"), when a registered trademark owner claims trademark infringement against use of another registered trademark, the plaintiff shall first file a petition to invalidate the registered trademark of the defendant; the court action of trademark infringement shall suspend for ruling on the invalidation action. Therefore, it is difficult to win a trademark infringement act if the defendant's mark is a registered mark. Second, in the author's opinion, Monster Energy uses the above marks in good faith.

    

   Another issue is how Monster Energy shall use its Chinese brand name. The author's opinion is that Monster Energy shall use "魔爪 (Mo Zhua Chinese)", as the Chinese name of "Monster", instead of "怪兽 (Guai Shou Chinese)" or "怪物 (Guai Wu Chinese)". By doing so, even though the Chinese public or third-party news media may still call the brand "Monster" by "Guai Shou Chinese", Monster Energy may mitigate its obligation with the argument that the Chinese name used by the company is "魔爪", which is completely different from the "" mark. Monster Energy has taken measures to avoid any likely confusion.

    

2. For ManSiTe

   The package of ManSiTe's product is "", which bears the "" and an "" device with all black background. It is reported that Monster Energy brought a law suit against ManSiTe claiming that the trade dress that ManSiTe uses on its product constitutes unfair competition. If the trade dress under infringement claim is as what is shown above, ManSiTe may defend that both the Chinese and the "M" device are registered marks. However, Monster Energy may further argue that the packaging "" is a "free ride" on "", and ManSiTe's bad faith in imitating Monster Energy's famous trade dress is self-evident.

    

   The overall picture of the trademark registrations that Monster Energy has filed in Class 32 shows that the company is proactive in protecting its brands in China; the company can continue using its original brands and packaging in China and the legal risks of being claimed for trademark infringement is reasonably low. However, Monster Energy will take legal risk if the company used "怪兽" Chinese as its brand name due to ManSiTe's prior registration of the identical Chinese name. From the other side, if the Chinese court maintains the validity of the registration of "" mark, and Monster Energy failed to invalidate the "" device mark, can Monster Energy win its infringement claim against ManSiTe for using packaging ""? What will Monster Energy do to prevent confusion and dilution that the "" and "" device packaging will cause or has caused to the public? Will Monster Energy change packaging of its functional beverages that it uses in China, or will ManSiTe gradually amend packaging to weaken the similarity with Monster's beverages? The ongoing battles between Monster Energy and ManSiTe has extended to many areas of trademark disputes, non-use cancellation, rejection, opposition, invalidation, and civil action of trademark infringement, constantly initiated by one party against another. The above-mentioned actions might take around several years; the lengthy procedures not only prolong the issuance of rulings but also increase uncertainty of the result; perhaps the two companies will reach a settlement agreement or the public is able to distinguish the two companies and their brands after the co-existence of the trademarks for several years? The author will give continuous attention on development of the cases between the two companies.