In upholding a recent opposition action against a mark that was filed in bad faith, the China Trademark Office (CTMO) cited, among other things, an administrative decision issued by a local administration for industry and commerce (AIC) and the bona fide doctrine.
Moen Incorporated, a US company that manufactures sanitary and bathroom products, owns the trademark MOEN, the equivalent trademark in Chinese characters and other related trademarks, which are all registered in Class 11 for faucets and toilets, among other things.
In April 2014 Moen complained to the AIC of Wuxi, Jiangsu Province, which resulted in the AIC raiding a local store engaged in selling counterfeit Moen products. More counterfeit Moen products were subsequently located and seized in Wuxi, which were also traced back to the raided store.
In July 2014 the AIC issued an administrative decision of coercive measure, in which it held Ms Qiu, the owner of the raided store, liable for trademark infringement and detained the seized goods.
On August 2 2014 Qiu, as per Moen's request, signed a written statement promising not to sell any toilet products bearing a mark that was identical or similar to Moen's registered trademarks.
It was subsequently discovered that on May 21 2014 Qiu had filed, under her own name, an application for a Chinese trademark. The applied-for mark consisted of two parts. The first part was visually similar to and pronounced the same as Moen's Chinese mark, while the second part meant 'impression' in Chinese.
The disputed mark covered goods in Class 11 (eg, flush toilets, washers for water taps and electric thermos flasks) and was preliminarily approved by the CTMO on March 27 2015.
On June 29 2015 Moen filed an opposition action against the mark and submitted the abovementioned AIC decision and Qiu's written statement to support its bad-faith filing argument.
On October 17 2016 the CTMO found that:
- the disputed mark was similar to and had been used for goods that conflicted with Moen's earlier trademarks; and
- the opposed party had breached the bona fide doctrine.
Specifically, the CTMO stated that the administrative decision corroborated the fact that coercive measures had been imposed on Qiu for her infringing behaviour of selling counterfeit Moen products. Qiu had been fully aware of the reputation of the opponent's sanitary and bathroom products, yet had altered the first Chinese character of Moen's trademark in her disputed mark and filed it for goods that were closely related to Moen's products. Therefore, the opposed party had exhibited blatant malice in copying and imitating Moen's trademark, which violated the administrative order and was detrimental to fair competition in the market. The CTMO therefore found the opposed party to be in violation of the bona fide doctrine.
The CTMO cited Articles 7, 30 and 35 of the Trademark Law to reject the opposed mark's registration.
It is unusual that the CTMO cited the bona fide doctrine directly to support its finding. While the doctrine, which was introduced by the third amendment to the Trademark Law, is customarily perceived to be a general principle whose application can be found in a large number of articles, its direct citation remains controversial.
On November 27 2016 the State Council released its Opinion on Optimising Property Protection Systems and Protecting Intellectual Property. In Part 9 of the opinion, the State Council vows to:
- increase efforts to punish IP infringement;
- establish a working mechanism to collect information on counterfeit sources;
- incorporate IP infringement into the credit record of businesses and individuals; and
- propel the disclosure of information in relation to administrative cases arising from, among other things, IP rights infringement.
The CTMO's approach in this case reflects its intent and determination to eradicate bad-faith trademarks and its efforts to bolster the social credibility system.
For further information on this topic please contact Yongjian Lei or Ye Cai at Wanhuida Peksung by telephone (+86 10 6892 1000) or email ([email protected] or [email protected]). The Wanhuida Peksung website can be accessed at www.wanhuida.com and www.peksung.com.