Over the past few years, there have been many legitimate trademark holders especially in the wine-making industry whose applications have been rejected in China because of unscrupulous locals who, undoubtedly aware of trademark protection, had made applications themselves!
In fact, contrary to the France National Industrial Property Institute (INPI), which accepts registration of several identical marks, the China trademark office automatically refuses any new application that is identical or bears a close resemblance to a trademark that has already been applied for. It is a “first come, first serve” system.
The first person to apply for their trademark in China is therefore protected by the China trademark office against any new application which could cause confusion with their trademark.
This is what led to the development of the “trademark squatting” phenomenon a few years ago: Chinese companies or individuals applying for French châteaux wine trademarks, whether they are well-known or not, from the moment that the legitimate rights holder of the château wine neglected to register his trademark in China. Yet, a fraudulent application can only be cancelled if there had been intensive use in China by the legitimate owner prior to the application of the contested trademark; however, demonstrating intensive use dating back to two or three years is difficult, if not impossible, especially at a time when most of the containers were transited via Hong Kong mainly for customs reasons.
Legitimate trademark owners thus find themselves in an awkward situation with regard to their distributors who request a certificate of registration as a way of protecting themselves against infringement action, but often find it impossible to acquire from the legitimate owner.
In an effort to spare many wine-growers and trading companies these pains, and to put an end to lengthy and costly legal proceedings, we have collaborated with our Chinese colleagues on the possibility of changing trademarks applications to facilitate the registration of trademarks for peripheral activities limited to the wine sector.
With Chinese trademark law currently in a state of flux, the Chinese authorities recently agreed that the retailing of pharmaceutical products could be targeted using a trademark application.
This possibility has not yet been transferred to the retailing of the wines or alcoholic beverages. However, it is now possible to use class 35 instead of class 33 when applying for a trademark in China for the following activities:
- Making wines or spirits available through the communication media, for commercial purposes;
- License management for wine or spirits;
- Sales promotion related to wine or spirits;
- Import-export agencies related to wine or spirits.
Given that the Chinese trademark office does not carry out inter-class examinations, it cannot cite a class 33 application as a means of blocking another application in class 35, even if the two are identical.
As a result, this type of application may be a clever solution with a double advantage:
- It provides legitimate right holders with the opportunity to quickly fix a date in this class, and to obtain a trademark registration within a year and,
- It can be used to provide distributors with justification of ownership rights for a particular trademark in a fairly short space of time.
While this option does not address the past situation, it provides a means to anticipate the future with a greater level of legal security. Now that wine consumption in China is expected to continue rising, it is better to at least secure a certificate of registration for a trademark.