The China Trademark Office (CTMO), cites, among others, an administrative decision issued by a local AIC and the bona fide doctrine, in backing an opposition against the opposed mark filed in bad faith.

Case Brief

Moen Incorporated (hereinafter “Moen”), a US company featuring sanitary and bath products, is the owner of trademarks MOEN, its equivalent Chinese trademark “” and other related trademarks including “”, the registration of which all designates goods “faucets; toilets, etc.” in Class 11.

In April of 2014, Moen complained to the Administration of Industry of Commerce (AIC) of Wuxi, Jiangsu Province, which resulted in the AIC’s raid action against a local store (hereinafter “target store”) engaged in selling counterfeits of Moen products. More counterfeit Moen products were located and seized in Wuxi afterwards, whose source was traced back to target store as well.

In July of 2014, the AIC issued an administrative decision of coercive measure (hereinafter “the decision”), holding the owner of target store Ms. Qiu liable for trademark infringement and deciding to detain the seized goods.

As per MOEN’s request, QIU signed on August 2, 2014, a written statement, promising not to sell any toilet products bearing mark that is identical with or similar to MOEN’s registered trademarks.

It was found out later that QIU, filed on May 21, 2014 under her own name, an application for the “”. The applied mark (hereinafter “the disputed mark”) consists of two parts: “魔恩” which is visually similar to Moen’s Chinese mark, also shares with it the same pronunciation; and “印象” means “impression” in Chinese.

The disputed mark covers goods “flush toilets; washers for water taps; electric thermos flask etc.” in Class 11. On March 27, 2015, it was preliminarily approved by the CTMO.

On June 29, 2015, Moen filed an opposition against the mark and submitted the aforesaid administrative decision and QIU’s written statement to support its bad faith filing argument.

On October 17, 2016, the CTMO issued a decision finding that the disputed mark constitutes a similar mark on conflicting goods to Moen’s earlier trademarks and the opponent’s behavior breaches the doctrine of bona fide. To be specific, the CTMO put forward in the opposition decision that: 

The administrative decision collaborated the fact that coercive measures were once imposed on the opposed party for its infringing behavior of selling counterfeit Moen products. The opposed party was fully aware of the reputation of the opponent’s sanitary and bath products, yet it altered the first Chinese character of Moen’s trademark into that of the disputed mark and filed the mark on goods that are closely related to Moen’s products...The opponent exhibits blatant malice in copying and imitating MOEN’s trademark, which disturbs the trademark registration administrative order and is detrimental to the fair competition in the market. The CTMO therefore found it in violation of the bona fide doctrine.

The CTMO cited Articles 7, 30 and 35 of the Trademark Law to reject the registration of the opposed mark.

We represented Moen in the above proceeding.

Comments:

It is rather unusual for the CTMO to directly cite the bona fide doctrine to support an opposition. The principle, introduced by the third amendment to the Trademark Law, is customarily perceived as a general principle, whose application can be found in a large number of articles, yet its direct citation still remains controversial.

On November 27, 2016, China’s State Council released “Opinion on Optimizing Property Protection System and Protecting Intellectual Property”. Part 9 of the Opinion vows to:

  • Step up efforts to punish IP infringement;
  • Establish a working mechanism to collect information sources of counterfeits;
  • Incorporate record of IP infringement into the credit record of business and individuals;
  • Propel the disclosure of information in relation to administrative punishment cases arising from infringing IP rights; etc.

The CTMO’s approach in this case reflects somehow the agency’s intendancy and determination to fight against bad-faith trademarks and its efforts to bolster the social credibility system.