The relation between Trade name and Trademark in China

Borsam IP
BORSAM IP———————————————

Trademark is just as important to a legal entity as a trade name. If you set up a company, the first thing may be getting the trade name registered in the company registry and then to have a trademark for your business. Sometimes, it is confused for the consumer to distinguish the trade name and trademark because they use the significant part of their trade name as a trademark. Nonetheless, the trade name and trademark belong to the same entity, and no infringement is involved. But in practice, there is a mass of dispute cases of a trade name and trademark.
What are the differences between trade names and trademarks?
In China, company registration proceedings are governed by the local Administration of Industry and Commerce. The names of foreign-funded enterprises shall be approved by the State Administration for Industry and Commerce (SAIC) ultimately. The administration supervises and manages the use of the trade name.
Different from the trade name, trademarks shall be registered through the Trademark Office of National Intellectual Property Administration. Two processes are separate and run in different systems, so none of them will be checked in another’s database before registering.
What regulation is applicable to the conflicts of trade names and trademarks?
The similar functions and separate management systems of trade names and trademarks usually result in some conflicts. For example, if someone registers a trade name similar to other’s prior used or registered trademark, and businesses or designations of them are the same or similar, then the public may be confused about the source of relevant goods or services. The registration and usage of that trade name will probably constitute unfair competition.
The two signs and relevant behaviors are managed by different laws. The improper use of a trade name may constitute unfair competition. The affirmation of unfair competition should base on the Law of Anti-unfair Competition, while the Trademark Law regulates the use of a trademark as trademark infringement. In judicial practice, the application of the law depends on the nature of the allegation. Taking the below case as an example, the defendant illegally used the trade name and was sentenced to pay compensation of 10 thousand yuan.
Jin Dun Building Materials Company (Jin Dun company) is the owner of the trademark “金盾JinDun.” They found the defendant New Century Jin Dun Construction Company (New Century company), simply used their name as “Jin Dun waterproof company” on advertisements on several websites. So Jin Dun company sued them for unfair competition.
After trial, the Beijing IP Court found that New Century company deliberately used their company name in the form of “Jin Dun waterproof company” or “Beijing Jin Dun waterproof company” and deleted the significant term “New Century,” which misled the public knowing their products from Jin Dun company. The usage of “Beijing Jin Dun waterproof company” constituted the usage of trade names illegally. Though “Jin Dun waterproof company” directly indicated the origin of products, the relevant behavior belonged to distinctly using the trade name as a trademark, so it should be prohibited by the Trademark Law. Hence, the defendant was ordered to compensate Jin Dun company with 10 thousand yuan based on regulations of the Law of Anti-unfair Competition.
Another typical situation of conflict between the two signs is about the trademark application of the prior trade name of others. As a commercial sign, a trademark indicates the origin of designated goods or services, and a trade name also always present the entity that provides goods or services. That’s why many companies will register their name as a trademark. Keeping the consistency of trade name and trademark of the same entity is safe. 
What if the trade name being copied as a trademark by others? 
In the different stages of trademark registration, an enterprise may take different actions if encountering someone copying or imitating their name as a trademark, i.e., filing an opposition against the pending application or applying for invalidation against a registered trademark. 
According to Article 32 of the Trademark Law, no application for trademark registration may infringe upon the existing prior rights of others. The prior rights in the provision refer to rights of the trade name, domain name, domain name, design patent, copyright, and so on. Hence, a third party is titled to oppose or invalidate a trademark based on the right of the trade name.
Both trade names and trademarks are important in business, and they do have similar functions and characters. However, the usage and right protection of the two signs are quite different. Companies should properly use their trade name in case of being similar to other’s prior trade names or using it distinctly as trademarks. Other the other hand, as an oblige of a trade name when other conditions are satisfied, and a company may challenge trademark filed or registered later, to better protect their rights and reputation.