[Text Box: Wanhuida Peksung IP Express No. 49 – May 2018 Issue]
Becoming more strategic in fighting bad faith filing in China........................ 1
China's trademark filing has grown dramatically in the last few years. Statistics shows that the number of filings reached a staggering 5.748 million in 2017, giving rise to a surge in trade mark administrative litigations. Data released by the Beijing Intellectual Property Court in 2016 shows that bad faith filing/registration accounts for 30% of all the trademark-related administrative suits, making it officially a major concern to brand owners.
Keemun GI certification trademark invalidated............................................. 4
Keemun is a famous Chinese black tea produced in the triangular mountain area of the Dongzhi, Shitai and Qimen counties in Anhui Province. The area has been traditionally recognised as the growing region of Keemun by various literature and historical records. The tea growers and producers in the region have helped to shape the Keemun black tea production technique.
Winning the first instance on a procedural technicality may not be enough. A final victory on the merits, on appeal, remains necessary............................................................................. 7
ESSILOR INTERNATIONAL (COMPAGNIE GENERALE D'OPTIQUE) (ESSILOR) obtained the registration in 1986 of the trademark "ESSILOR" in China (Figure 1) designating "various spectacles and frames for protecting or correcting vision" in Class 9. In 1999, ESSILOR registered the trademark "依视路" (Chinese transliteration of ESSILOR) (Figure 2) designating "spectacle lens (non-implantable)" in Class 9.
[Text Box: Wanhuida Peksung IP Express provides updates of Wanhuida Peksung and the development in intellectual property laws and cases in China mainland. If you are interested in any IPR-related issues and looking for legal advice, please contact us.] [Text Box: Editors: Dr. HUANG Hui Mr. Paul RANJARD Ms. QIN Huimin Ms. JIANG Nan Information & Subscription: [email protected]]
Wanhuida Peksung Focus
Becoming more strategic in fighting bad faith filing in China
China's trademark filing has grown dramatically in the last few years. Statistics shows that the number of filings reached a staggering 5.748 million in 2017, giving rise to a surge in trade mark administrative litigations. Data released by the Beijing Intellectual Property Court in 2016 shows that bad faith filing/registration accounts for 30% of all the trademark-related administrative suits, making it officially a major concern to brand owners.
In response to the situation, the China Trademark Office (CTMO), the Trademark Review and Adjudication Board (TRAB), and the judiciary have been ramping up efforts to contain bad faith filings. Examiners and judges are becoming more open minded in recognizing evidence and in the application of the law.
The following case law reveals how brand owners could be more strategic in fighting bad faith filing under the current trade mark legislative framework.
Application of the Principle of Good Faith
The 2013 Trade mark Law (TML) introduces, in Article 7, "good faith" as a general principle: "The application for registration and the use of a trade mark shall be made in good faith". The principle is customarily perceived as a general principle, whose application can be found in a large number of articles, yet its direct citation is rather unusual.
In the case below, the CTMO rejected the applicant's trade mark by applying both Article 30 (similar mark on similar goods) and Article 7 (good faith principle) of TML.
Moen Incorporated, owner of MOEN and its corresponding Chinese "摩恩" marks in China, filed an opposition against the trade mark application "魔恩印象" applied by an individual whose store was raided for selling fake Moen products and freeriding on Moen's reputation.
The CTMO ascertained that the administrative decision corroborated the fact that coercive measures were imposed on the opposed party for selling fake Moen products. The opposed party was fully aware of the reputation of the opponent's sanitary and bath products, yet it altered the first character of Moen's Chinese trade mark without changing the pronunciation, combined it with the Chinese character of impression and filed the mark on goods that are closely related to Moen's products. The opposed party exhibits mala fide in copying and imitating MOEN trade mark. The CTMO cited Moen's earlier trademarks and the good faith principle to reject the opposed mark in all designated goods.
Administrative action helps preserve evidence on the prior offence of trade mark squatter.
Preemptive filing by agent or representative (in a broad sense)
Article 15.1 of TML prohibits the agent or representative from preemptively registering the trade mark of the party being represented. The Supreme People's Court further specifies in Article 15.3 of the "Judicial Interpretation on Several Issues on the Trial of Administrative Litigation relating to Granting and Affirming Trade mark Rights" that where the trade mark applicant's filing could be presumed to be the result of bad faith collusion with the agent or representative, with whom he has specific personal status relationship", Article 15.1 of the TML should apply.
The case below is an exemplary application of the SPC judicial interpretation.
SOCIETE VITICOLE HENRI LURTON (Henri Lurton) is the owner of French winery Chateau Brane-Cantenac, which owns registered trade mark "BRANE CANTENAC" in France. In 2014, Fujian Lucky Horse Group registered trade mark "BRANE CANTENAC" for wines in China. Henri Lurton applied for the declaration of invalidation of the trade mark.
In this case, an in-depth investigation disclosed that, without direct contact with Henri Lurton, the associated company of Fujian Lucky Horse used to sell Brane-Cantenac wine to Shanghai Lucky Horse. Shanghai Lucky Horse had investment from the shareholder of Fujian Lucky Horse and the senior management of these two companies is the same. The Beijing IP Court presumed that Fujian Lucky Horse should have known the trade mark "Brane-Cantenac" owned by Henri Lurton.
The court also recognized the reputation of Chateau Brane-Cantenac and ascertained that registration and use of the disputed trade mark by Fujian Lucky Horse would cause confusion among consumers. The decision was upheld by the Beijing Higher Court.
Thorough investigation helps to unravel the true identity of trade mark squatter.
Massive filing of others' famous trade marks
Article 44.1 of China's TML concerns bad faith filing by fraud or other unfair means - massive filings/registrations of others' famous trade marks (one famous mark in several classes or several famous marks in different classes).
The case below is a 12-year legal wrangle between brand owner and a cunning squatter that attempts to launder its bad faith filing through multiple assignments.
AKRIS PRET-A-PORTER AG (AKRIS AG), a famous Swiss fashion house, raised opposition to applied trademark "A-K-R-I-S-" filed by a France Benny International Enterprise Group Co., Limited. After going through opposition, opposition review, court trial of first and second instance, TRAB, which was ordered by the court of appeal to re-make the opposition review decision, rejected the application of the opposed trademark. The applicant of the opposed trademark then brought an action before the Beijing IP Court.
The opposed mark had been assigned twice during the previous proceeding, from France Benny International to Gu Bai Tools then to AKRIS (Hong Kong) Limited. It is obvious that the original owner of the opposed trade mark deliberately assigned the trade mark several times in an attempt to launder the preemptively filed trademark and clear itself of "filing massive preemptive trademark registrations".
The Beijing IP Court held that trade mark registration purportedly not for use and massive registrations of prior reputable or original trademarks fall under the circumstance of "acquiring the registration of a trade mark by any other unfair means" as provided in Article 44.1 of the TML, because such acts disrupts the trade mark registration procedures, damages public benefits and misappropriates public resources. In this case, the assignors and assignees of the opposed mark are interested parties, without any proper cause to justify the frequent assignment acts. Therefore, the assignment of the opposed mark did not alter the fact that the mark was filed in bad faith. The Beijing IP Court maintained the TRAB's decision of disapproval.
A simple trade mark check of the trade mark squatter may help the brand owner find more.
First published in Asialaw Leading Lawyers 2018
Contributors: Ms. Ren Haiyan & Mr. Lei Yongjian
Wanhuida Peksung Focus
Keemun GI certification trademark invalidated
Keemun is a famous Chinese black tea produced in the triangular mountain area of the Dongzhi, Shitai and Qimen counties in Anhui Province. The area has been traditionally recognised as the growing region of Keemun by various literature and historical records. The tea growers and producers in the region have helped to shape the Keemun black tea production technique.
On September 28, 2004, the Keemun Black Tea Association (KBTA) filed an application for the registration of the name "祁门红茶" ( Keemun Black Tea) as a certification trademark in class 30, to protect this geographical indication. The application designated exclusively Qimen County as the growing region of Keemun Black tea. This was based on an affidavit of the Anhui Provincial Agriculture Commission in 2004.
On October 27, 2008, Anhui GuoRun Tea Industrial Co., Ltd. (GuoRun), a producer of Keemun tea, filed an opposition against the certification mark. GuoRun disagreed with the definition of the growing region set by the KBTA and cited an updated affidavit of the Anhui Provincial Agriculture Commission in 2007, which included the areas of Dongzhi, Guichi and Shitai in the Keemun growing region.
In 2009, while the opposition was still pending at the China Trademark Office (CTMO), the Anhui Provincial AIC intervened. A meeting was convened to reconcile the disputes between KBTA and GuoRun and facilitate the smooth registration of the certification mark. Under the mediation of the AIC, GuoRun agreed to withdraw its opposition and KBTA agreed to file a modification of the geographic region designated by the certification mark. Holding up its end of the bargain, GuoRun withdrew the opposition and the certification mark was registered on November 7, 2008.
However, KBTA reneged on its promise.
On December 27, 2011, GuoRun filed for the cancellation of the certification mark with the Trademark Review and Adjudication Board (TRAB), arguing the registration of the disputed mark had been obtained by fraudulent or other illegitimate means (Article 41.1 of the 2001 Trademark Law).
On October 19, 2015, the TRAB ruled to invalidate the certification mark.
KBTA brought an action before the Beijing IP Court.
The trial court held that in order to justify the finding that the disputed mark is registered by using fraudulent or illegitimate means, it is necessary to establish the fact that the trademark registrant has: 1) deliberately deceived the CTMO to seek unfair competition edges or illegal interests; and 2) fabricated or concealed facts and submitted a forged application or other documentations to the CTMO. On April 24, 2017, the court ruled in favor of the KBTA and annulled the TRAB's invalidation decision.
GuoRun appealed to the Beijing High Court.
The court of appeal opined that due to the strong technicality in the determination of the geographic range of the GI certification/collective trademark, the CTMO, in practice, only conducts formality examination on the filing documents of the marks involved. Under such circumstance, the GI trademark applicant bears a higher obligation and shall act in good faith when submitting filing documents. The applicant is obligated: 1) not to produce forged application files; and 2) to give a full and accurate account of the circumstances. Obtaining a registration by filing fabricated files or by resorting to other deceptive means falls under the "fraudulent" circumstance as provided by Article 41.1 of the Trademark Law. Obtaining registration by choosing to neglect the obligation of giving the CTMO a full and accurate account of the circumstances falls under the circumstance of using "other illegitimate means" as provided by Article 41.1 of the Trademark Law.
The court found that notwithstanding the clear knowledge of the existing controversies over the determination of the Keemun production region, KBTA had failed to inform the CTMO, which breached the good faith principle and fell under the circumstances as provided by Article 41.1 of the Trademark Law.
On December 25, 2017, the Beijing High Court overturned the first instance judgment.
This excellent decision emphasizes the very general concept of good faith, which is most welcome.
The question arises, however, whether because of the invalidation of the Keemun certification mark, anybody could use such name to sell tea.
We do not believe that this could happen. Despite the invalidation of the Keemun certification mark, unauthorised use of such mark could still constitute infringement and unfair competition over an unregistered GI trademark. It may be recalled that the Beijing No.1 Intermediate Court once granted GI protection over the unregistered Champagne trademark in a civil litigation.
Besides, this is the first administrative litigation involving a dispute over the geographical range of a GI mark. It sheds some light on the remedial approaches to be taken in similar cases:
Where the trademark registrant is open to negotiation, if a consensus can be reached and sanctioned by the competent authority, the registrant may amend its rules governing the use of the GI mark, designating the uncontested region agreed by both parties, and submit the same to the CTMO for examination and approval. If the trademark registrant refuses to amend the rules, an interested party may file an opposition or invalidation, citing Article 10.1.7, Article 44.1 or Article 7 of the 2013 Trademark Law, depending on the circumstances of the case. Theoretically speaking, an interested party may also institute a civil lawsuit against an infringer, provided that evidence adduced suffices to prove that though not covered by the established geographical range of the GI mark involved, yet it deserves the same GI mark protection against the infringer. Another alternative for an interested party would be, in case the trademark registrant sent out a cease and desist letter, to lodge a non-infringement suit requesting the court to clarify the geographical ambiguity and confirm that it is entitled to use the GI mark.
The case is selected as SPC's 50 Exemplary IPR Cases in 2017 and the "Top 10 IPR Innovative Cases in 2017" released by the Beijing High Court.
Wanhuida Peksung represents GuoRun in the court proceedings.
Contributors: Ms. Ming Xingnan & Ms. Jiang Nan
Wanhuida Peksung Focus
Winning the first instance on a procedural technicality may not be enough. A final victory on the merits, on appeal, remains necessary
ESSILOR INTERNATIONAL (COMPAGNIE GENERALE D'OPTIQUE) (ESSILOR) obtained the registration in 1986 of the trademark "ESSILOR" in China (Figure 1) designating "various spectacles and frames for protecting or correcting vision" in Class 9. In 1999, ESSILOR registered the trademark "依视路" (Chinese transliteration of ESSILOR) (Figure 2) designating "spectacle lens (non-implantable)" in Class 9.
On 4 June 2010, Shanghai Hongcheng Optical Co., Ltd. filed an application for the registration of the trademark "eSSILOR依视路" (Figure 3) designating "industrial adhesives and curing agents", in Class 1.
On 23 June 2011, ESSILOR filed an opposition with the China Trademark Office (CTMO) against the Opposed Mark, citing its prior registrations. The CTMO dismissed the opposition on November 6, 2012, considering that 1) the designated goods of the Opposed Mark are not similar with those of the Cited Marks, and 2) the evidence is insufficient to prove that the Opposed Mark "duplicated or copied (its) well-known trademark" according to Article 13.2 of the 2001 Trademark Law.
On 30 November 2012, ESSILOR filed for review with the Trademark Review and Adjudication Board (TRAB), citing Article 13.2 (registered well-known trademark) and Article 31 (prior right and prior used trademark of certain influence) of the 2001 Trademark Law, among others.
Figure 1: Cited Mark 1 Figure 2: Cited Mark 2 Figure 3: Opposed Mark
The TRAB held that:
Article 13.2 does not apply : even though ESSILOR's Cited Mark 2 "依视路" has built a certain reputation on "spectacles", however, the evidence is insufficient to prove that such mark had reached, through use and promotion in mainland China, the well-known status which would justify a cross-category protection. Article 31 (no prejudice to other prior rights or to an prior used trademark with a certain influence) does not apply either: despite the fact that prior to the application of the Opposed Mark, ESSILOR had been using "依视路" and "ESSILOR" as its trade name, there is a big gap between the goods of the Opposed Mark and those of the Cited Marks. And ESSILOR failed to prove that it had used its trademark in respect of the goods designated by the Opposed Mark and had attained a certain influence.
The TRAB approved the registration of the Opposed Mark on 14 April 2014.
ESSILOR appealed to the Beijing First Intermediate Court, claiming that the TRAB had failed to adjudicate on the issue whether the Cited Mark 1 "ESSILOR" had reached the well-known status.
The Court ascertained that the TRAB had failed to adjudicate all the claims of ESSILOR, which breached the provisions of Article 28 of the "Trademark Review and Adjudication Rules" and constituted procedural violation. The Court ruled to annul the TRAB decision on 30 December 2015.
Nevertheless, the trial court did uphold the TRAB findings that the existing evidence adduced did not suffice to prove that the Cited Marks had reached the well-known trademark status prior to the application date of the Opposed Mark.
It was, therefore, necessary to appeal before the Beijing High Court.
ESSILOR argued that:
The Cited Marks, which are coined terms, are highly distinctive. Both marks have built a reputation in the Chinese optical market and thus have become well-known before the application date of the Opposed Mark. The designated goods of the Opposed Mark and those of the well-known Cited Marks are highly relevant. The Opposed Mark applicant, a competitor of ESSILOR, exhibited bad faith in filing for the registration of the Opposed Mark. The registration of the Opposed Mark is detrimental to ESSILOR's legitimate rights.
ESSILOR adduced supplementary evidence proving that the relevant public of the designated goods of the Opposed Mark largely overlaps with that of the Cited Marks, so that the relevant public is likely to associate the Opposed Mark with the Cited Marks and be misled, which prejudices ESSILOR's interests.
The Court of Appeal ascertained that the Cited Mark 2 "依视路" had reached the well-known trademark status before the application date of the Opposed Mark. On 29 November 2017, the Court of Appeal corrected the findings of the first instance court, while upholding its decision to rescind the TRAB decision for failing to address all ESSILOR's claims.
Wanhuida Peksung represents ESSILOR in the administrative and judicial proceedings.
Contributors: Ms. Ming Xingnan & Ms. Wang Yan
