Recently, Facebook prevailed in the final instance of the administrative litigation of trademark opposition for “face book”, eventually achieve thorough victory against a Chinese trademark squatter after five years of war.

On 24 Jan 2011, Chinese citizen Ms. Hongqun LIU filed an application for registering trademark “face book” before China Trademark Office (hereafter referred as “CTMO”), designating goods “vegetable canned food, potato slide” in class 29 , “coffee beverage, tea beverage and candy” in class 30 and “fruit juice(beverage), iced (beverage), vegetable juice (beverage)” in class 32. 

The application of the trademark “face book” was preliminarily approved after examination and entered into opposition period for three months. On Jan 18, 2012, Facebook filed a petition of opposition before CTMO but such petition was rejected for lack of sufficient ground indicating that Facebook’s mark has been used and gain reputation. On Apr 2, 2013, Facebook as opponent then filed a petition of reexamination before Trademark Reexamination and Adjudication Board (hereafter referred as “TRAB”) to appeal the decision of opposition (such route of reexamination on the opposition decision as opponent before TRAB has been closed since the implementation of new Trademark Law of P. R. China since August 30, 2013). On Apr 15, 2014, TRAB upheld the decision of CTMO and decided that the opposed trademark shall be approved for registration. Facebook was not satisfied with the decision of TRAB and filed a lawsuit against TRAB before Beijing No. 1 Intermediate Court (similar cases shall be filed before Beijing IP Court after the establishment of Beijing IP Court towards the end of 2014). Beijing No. 1 Intermediate Court overturned the decision of TRAB based on the ground that such decision lacked sufficient supporting evidence. The court declared to cancel TRAB’s decision and ordered TRAB to make decision on the opposition again. Ms. LIU as the trademark applicant appealed the judgment of the Beijing No. 1 Intermediate People’s Court before Beijing Higher People’s Court. The court eventually upheld the judgment of 1st instance court and rejected the appeal of Ms LIU. 

To fight against trademark squatter, the usual argument for trademark owner is a. the mark has become a well known trademark in China (Article 13 of Trademark Law of P. R. China), b. the mark has been used for certain period of time and gain certain reputation in China (Article 32 of Trademark Law of P. R. China) or c. the applicant files the application in bad faith (Article 15 of Trademark Law of P. R. China). 

  1. Well known trademark

According to the Trademark Law of P. R. China

Article 13 Should any rights of a trademark well known to the relevant public be infringed, the trademark holder can follow the relevant provisions in this law to request the protection of the said famous trademark. 

Where a mark is a reproduction, imitation, or translation of a third-party’s famous trademark which has not been registered in China and where the goods are identical or similar, which may cause public confusion and damage the interests of the registrant of the famous mark, no registration shall be granted and the use of the mark shall be prohibited. 

Where a mark is a reproduction, imitation, or translation of a third-party’s famous trademark which has been registered in China and where the goods are not identical or dissimilar, which may mislead the public and cause injury to the interests of the registrant of the famous trademark, no registration shall be granted and the use of the mark shall be prohibited. 

In this case, since Facebook’s service is not available in mainland China, the mark “facebook” does not meet the requirement of well known trademark. 

  1. Mark that has been used and gained certain reputation.

According to the Trademark Law of P. R. China

Article 32. No trademark application shall infringe upon another party’s existing prior rights. Nor shall an applicant rush to register in an unfair manner a mark that is already in use by another party and enjoys substantial influence.

As analyzed above, Facebook’s trademark has not been used in mainland China and therefore facebook’s mark is not entitled to a mark that has been used and gained certain reputation. 

  1. Bad faith

According to the Trademark Law of P. R. China

Article 15. Where an agent or representative, without the authorization of the principal, seeks to register in the agent’s name the principal’s trademark and where the principal objects, registration shall be refused and the use of the mark shall be prohibited. 

Where a trademark used on an identical or similar product that is considered for registration and that is the same or similar to a prior user of an unregistered trademark, the registrant, where no prior contractual agreement or business relationship exists between the registrant and prior user, may not register its trademark where the prior user’s mark is clearly in use and an opposition to the trademark’s registration has been filed. 

According to the provision above, trademark owner may prove bad faith registration either through providing evidence of agent-client, contractual agreement or business relationship. However, in this case, Facebook and Ms. LIU do not know each other, let alone any business relationship between them. 

Facebook’s Approach 

Facebook, on the other hand, argued that the applicant filed the trademark application through improper means and therefore the application should be rejected. 

According to the Trademark Law of P. R. China

Article 44. Where a trademark registration violates the provisions of Articles 10, 11, and 12 of this Law, or the registration of a trademark was acquired by fraud or any other improper means, the Trademark Office shall invalidate the registration at issue. Any organization or individual may request that the Trademark Review and Adjudication Board make a ruling to invalidate such a registered trademark.

The court believes that the principle behind the provision is good order and custom. Literally speaking, the provision seemed to be meant for the mark that has been registered only. Therefore, the provision shall not be applied to pre-registration proceedings such as opposition proceeding. However, the court held that, if improper means are found in the prosecution stage but no action is taken against such means, it will harm the good order of trademark registration and administration. Therefore, the principle behind the provision shall be presented through trademark prosecution, approval and invalidation stage. 

In the “Opinion on certain questions of hearing trademark acquisition administrative case” issued by the Supreme People’s Court in 2010, 

for “other improper means” , one shall take into consideration whether such means disturb the order of trademark registration, harm public interest, improperly occupy public resources or gain improper interest through other means (other than means of fraud). 

In this case, Facebook succeeded in proving that Ms. LIU has filed the application “through improper means” from the following aspects:

Ms. LIU has filed application for multiple trademarks “face book” in many different classes. Besides, Ms. LIU has registered other trademarks such as “黑人” (Chinese trademark of the famous Darlie Toothpaste ) and “壹加壹” (Chinese trademark of a chain supermarket in China). Ms. LIU’s registration of marks has constituted reproduction and imitation of other’s trademark with high reputation. Such act disturbs the administration order of trademark registration. It is harmful for fair competition and therefore it is against public order and custom. 

Click here to view image.

The filing history of Ms. LIU as indicated in CTMO’s database:

The court further notes that the internal value of trademark lies in its function as the indicator of the source of goods or service. The act of hoarding trademark for sales pursuing commercial interest or registering high reputation trademark of others is against the internal value of the trademark and disturbs the order of trademark registration. Such act will hinder others from doing business and therefore such act of mass trademark squatting shall be prohibited. 

Based on the consideration above, the decision of TRAB shall be cancelled and TRAB shall make decision on the case again.