Swiss fashion company AKRIS Prêt-à-Porter AG owns a series of trademarks containing the word 'Akris', including PUNTO AKRIS (International Registration 637645), which has been registered in Class 25 with territorial extension to China since 1995.
In 2003 France Benny International Enterprise Group Co, Limited, a Hong Kong company, filed a trademark application (3499689) for A-K-R-I-S in Class 25 for clothing, shoes and hats, among other things. In January 2005 the China Trademark Office (CTMO) preliminarily approved the application.
In 2005 AKRIS AG filed an opposition against the A-K-R-I-S trademark based on its prior PUNTO AKRIS mark. In 2009 Liang, a natural person, filed a non-use cancellation action against the PUNTO AKRIS mark before the CTMO.
In 2014 the A-K-R-I-S mark was assigned to a Shanghai company, Gu Bai Tools (Shanghai) Co, Ltd and in 2015 it was reassigned to another Hong Kong company, AKRIS (Hong Kong) Limited.
On July 1 2009 the CTMO dismissed AKRIS AG's opposition, which was reversed by the Trademark Review and Adjudication Board (TRAB) in the opposition review procedure concluded on November 11 2013. However, on March 3 2014 the TRAB cancelled AKRIS AG's PUNTO AKRIS mark for non-use. Therefore, when Gu Bai Tools, the then-owner of the opposed trademark, appealed the TRAB's opposition review decision disapproving the trademark application before the Beijing First Intermediate Court, it was inevitable that AKRIS AG would lose, as it no longer had a prior right to support its opposition.
In the second-instance proceedings before the Beijing High Court, AKRIS AG had to change its litigation strategy by shifting the focus from its prior registration (Article 28 of the Trademark Law 2001), which had ceased to exist, to the bad faith of Gu Bai Tools (Article 44.1 of the Trademark Law 2013). It was found that the three successive owners of the opposed mark – France Benny, Gu Bai Tool and AKRIS Hong Kong – had intertwined shareholder relations and that besides the opposed mark, the original owner France Benny had also filed a large number of trademark applications for world-famous brands, including Eden Park, Tods, Lladró, CP Company and Mappin & Webb.
On April 20 2015 the Beijing High Court upheld the first-instance judgment, rejecting AKRIS AG's opposition and referring the case back to the TRAB. However, the Beijing High Court specifically instructed the TRAB to examine the abovementioned bad-faith facts in its new decision.
On October 28 2015 the TRAB affirmed that France Benny's filing of many other reputed trademarks, with no intention of use, had damaged the trademark registration order and contravened the bona fide principle. Therefore, the TRAB maintained its initial decision to refuse the registration of the A-K-R-I-S trademark, this time on the basis of Article 44.1 (trademark registration acquired by fraud or any other unfair means) of the Trademark Law 2013.
In 2016 AKRIS Hong Kong appealed the TRAB's new decision before the Beijing IP Court, claiming that:
- the evidence was insufficient to prove France Benny's unfair filing of those trademarks; and
- the application of Article 44.1 was erroneous because that article deals only with registered trademarks and not trademark applications.
During the appeal before the Beijing IP Court, AKRIS AG initiated another legal action in Hong Kong and on February 13 2017 it successfully forced AKRIS Hong Kong to change its misleading trade name to Huitong Trading Development Limited.
On April 19 2017 the Beijing IP Court maintained the TRAB's opposition decision of disapproval.
On April 22 2017, two days before World IP Day, the A-K-R-I-S case was selected as one of the Beijing IP Court's 18 exemplary cases concerning bad-faith trademark filing.
In recent years, the Chinese authorities and courts have increased their efforts to fight pre-emptive trademark filings.
In the above case, the TRAB made two successive decisions to refuse the registration of the opposed mark:
- the first was based on the relative ground of AKRIS AG's prior registration of PUNTO AKRIS; and
- the second was based on the absolute ground of bad faith when the prior registration had ceased to exist.
The Beijing High Court took full account of AKRIS AG's new evidence and arguments concerning bad faith. However, since these facts and arguments had not been raised and discussed before the TRAB in the opposition procedure, the court was not at liberty to make any adjudication on them in its decision. Nonetheless, the court found a way to bypass this procedural obstacle by neutrally directing the TRAB to pay attention to these points in its new decision.
In the new appeal against the TRAB decision, the Beijing IP Court explained in its judgment that Article 44.1 applies not only to invalidation cases against marks registered in bad faith, but also to opposition procedures against trademark applications. According to the court, the legislative intent of Article 44.1 is that it should be applied flexibly whenever it is necessary to deter bad-faith trademark filings.
While this 12-year battle resulted in a victory for AKRIS AG, it does not seem to be over yet. Another company, AKRIS (Shanghai) Apparel Co, Ltd, which was established in June 2016, filed new A-K-R-I-S trademarks in February 2017, which are pending examination before the CTMO. The bright side is that AKRIS AG's trademark applications pre-date most of them.