Synnex Succeeds in
A Trademark Invalidity Action Against
China’s OTT Video Tycoon

 
published on 6 Feb 2018

Established in Taiwan in 1988, Synnex Technology Int’l Corp. (“Synnex”) is one of the largest distributors of electronics in the Asia-Pacific region. The geographical scope of its business has been reaching in more than 35 countries. In addition to the controlling position among distribution channels, Synnex launched its own brand name, “LEMEL” and registered the same for trademark as early as 1989 for personal computers and other electronic products.

Synnex was aware that the word mark “Leme” had been registered in Taiwan by Leshi Internet Information and Technology Corp., a Beijing-based conglomerate which provides over-the-top video services. “Leme” was registered for goods in at least Class 9, containing items such as smart phone or computer applications, and in services for Class 35, relating to advertisements, marketing, etc. Considering the overall exterior and phonetic resemblance of the “Leme” mark applied in the designated goods/services that heavily overlapped with those of “LEMEL,” Synnex filed for an invalidation action before the Taiwan Intellectual Property Office (“TIPO”) as per Articles 30(1)(10) and 30(1)(11) of the Trademark Act on the grounds that such similarity between the senior and junior marks would increase the likelihood of confusion in the market.

Degree of Fame of “LEMEL”

Articles 30(1)(11) of the Trademark Act read:

“a trademark shall not be registered [if it is] identical with or similar to another person’s well-known trademark or mark, and hence there exists a likelihood of confusion on the relevant public or a likelihood of dilution of the distinctiveness or reputation of the said well-known trademark or mark, unless the proprietor of the said well-known trademark or mark consents to the application”

Synnex submitted a good amount of evidence which sufficiently demonstrated that the “LEMEL” was popularly known by local consumers. In an ex parte review, TIPO found Synnex to be a sales agent for more than 270 brands of products covering a wide spectrum of technology, including information, telecommunication, consumer electronics and components. Overseas, the “LEMEL” series products have entered Chinese Mainland, Hong Kong, Australia, Japan, and Southeast Asia with trademark registrations. Thanks to LEMEL’s success, Synnex was officially recognized as “Taiwan’s Attractive Brand for Personal Computers” and “Ideal Distributor Brand.” To keep its brand a fresh identity and to strengthen attachment between its brand and the new generation of consumers, LEMEL constantly gives itself exposure in various TV series, mobile games, pop music, etc.

In view of all the above efforts, TIPO determined the reputation and quality of goods/services represented by “LEMEL” have been widely known by relevant consumers in Taiwan. “LEMEL” is therefore recognized as a well-known trademark in the invalidation decision.

Level of Similarity

At the next stage, TIPO analyzed the similarity between the two marks. Judging from their respective alphabetic compositions, they only differ in one letter and one polygon. The salient portions of each mark show a high degree of similarity and “LEMEL” has one more capital “L” than “Leme” does. Thus, a consumer of general experience would likely be confused as to the same or related source of a good/service such as shareholding, license, and franchise. The two marks are very similar to each other.

Strength of Distinctiveness and Sophistication of Consumers

The mark “LEMEL” is composed of letters which bear no particular meaning in the order that they are arrayed, nor does it either describe or suggest any factual characteristics about IT goods/services. Furthermore, as previously noted, the senior mark has acquired high distinctiveness through extensive use both geographically and temporally. In other words, the primary significance of the mark, “LEMEL,” is that the public can successfully identify the source of product rather than merely the product itself. 

Since “LEMEL” has generated a considerable amount popularity among relevant consumers, without rebutting evidence from the holder of the junior mark, TIPO exercised its discretion and deemed that the senior mark should be entitled to more protectable interest. 

Diversity in Business Operation

Investigated through TIPO’s searchable trademark database, it is obvious that Synnex has used “LEMEL” in an electronic product line for a significant period of time and has also obtained additional proprietary rights over derived trademarks related to “LEMEL.” It is thus believed that Synnex has potential for expanding its use of the mark in other business sectors.

Conclusion

After going through a step-by-step analysis, TIPO ruled in favor of Synnex, confirming that Synnex has a real commercial interest in “LEMEL” and has a reasonable basis for its belief that it would be damaged by “Leme.” “Leme” was thus ordered to be invalidated from registration at Classes 9 and 35. 

for any questions relating to this topic, please contact us at cjchen@tsailee.com.tw