As in most countries, registration is the quickest and most cost-effective way to obtain trademark protection in China. As it takes just nine months and costs only $100, there is normally no reason not to register a trademark to ensure its protection.
However, a party may occasionally fail to register a trademark and another party may file or register the same trademark. If the owner of an unregistered trademark has no prior right (eg, a copyright or design right) that could invalidate the opposing trademark, there are still several options available.
Under Article 6bis of the Paris Convention and Article 13(2) of the Trademark Law, if an unregistered trademark is well known in China because of extensive use or other reasons (eg, international marketing or spillover advertising via television or the Internet), the owner can file an opposition or invalidation action against an opposing trademark and launch legal proceedings against the applicant if it uses the mark.
The well-known threshold is difficult to prove and, under Article 6quinqies of the Paris Convention and Article 15(1) of the Trademark Law, if an unregistered trademark is not well known, but the applicant of an opposing trademark was the representative or agent of the owner of the unregistered trademark, the owner of the unregistered trademark can file an opposition or invalidation action against the opposing trademark and launch legal proceedings against the applicant if it uses the mark.
However, it is uncommon for the applicant of an opposing trademark to have been the agent or distributor of the owner of an unregistered trademark. In such cases, Article 15.2 of the new Trademark Law 2013 offers a possible solution. If the unregistered trademark has been used in China (such use does not have to qualify as extensive), and the owner can prove that – for reasons relating to contractual or business contacts or geographical circumstances – the applicant of the opposing trademark knew of the unregistered trademark, the owner of the unregistered trademark will have sufficient grounds to file an opposition or invalidation action.
If none of the above apply, the owner of an unregistered trademark can invoke Article 32 of the Trademark Law, which states that "an applicant [cannot] pre-emptively register in an unfair manner a mark that is already in use by another party and enjoys a certain influence". In such cases, the owner of the unregistered trademark does not have to prove a relationship with the applicant. Rather, it must prove only that, due to its own use of the trademark, the unregistered trademark had enjoyed a certain influence when the opposing trademark was filed.
A seesaw relationship exists between reputation and bad faith. When the owner of an unregistered trademark enjoys a relatively high level of influence, it will have to prove an applicant's bad faith to a lesser extent, and vice versa. There is no minimum influence as such. Rather, it depends on how much evidence can be produced regarding the applicant of the opposing trademark's bad faith: the less evidence, the greater the extent to which the owner of the unregistered trademark will have to prove its use of the trademark.
If none of the above apply or the owner of an unregistered trademark misses the statute of limitation deadlines (ie, three months after preliminary publication for oppositions and five years after registration for invalidation), the owner could be sued.
However, even when sued, the owner of an unregistered trademark can continue using the trademark under Article 59(3) of the new Trademark Law if it:
- started using the unregistered trademark before the opposing trademark was filed and before the applicant started using the opposing trademark; and
- can show that the unregistered trademark enjoyed a certain influence.
The applicant cannot stop the owner of the unregistered trademark from continuing to use the mark "within its original use scope". Rather, it can only request that the unregistered trademark be amended to make it more distinct.
The concept of 'original use scope' is vague and has not been defined in the legislation.
In Sail – a 2015 top 10 influential Beijing IP protection case – the Beijing IP Court identified numerous factors that qualify as 'original use scope' (eg, if the mark is used by the same party or for the same or similar goods), but did not include geographic limitation. While this is good news for the owner of an unregistered trademark, it is bad news for the later applicant, which will be unable to stop prior use from continuing. In light of this, the courts must find a balance between the use and registration of a trademark.
For further information on this topic please contact Huang Hui at Wan Hui Da Law Firm & Intellectual Property Agency by telephone (+86 10 6892 1000) or email (email@example.com). The Wan Hui Da Law Firm & Intellectual Property Agency website can be accessed at www.wanhuida.com.
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