On 10 January 2017, the Supreme Court of the People’s Republic of China (PRC) issued ‘Provisions on Several Issues Concerning the Hearing of Administrative Cases Involving the Granting and Affirmation of Trademark Rights’ (Provisions). These entered into effect on 1 March 2017. Novagraaf’s Zhenghan Gong explains the implications of the changes for brand owners, and how the new Provisions are being applied by the courts.

The Provisions were introduced in part to combat trademark applications made in ‘bad faith’ by seeking to apply the principle of good faith and to protect earlier trademark rights. Bad faith registrations is a problem encountered by many non-Chinese brands and, on 24 April this year (two days before World IP Day), Beijing’s IP Court held a press conference to discuss how it will deal with bad faith filings in the future.

In particular, the Court has settled the trial criteria that judges should take into account when reviewing bad faith trademark filing cases to avoid obstacles to ‘legitimate applicants’ (i.e. victims of ‘pre-emptive’ or bad faith trademark applications).

Following the press conference, the Beijing IP Court published, in May, 18 cases of what it considered to be typical of bad faith trademark filings, including:

  • well-known trademarks, filed by an agent
  • the filing of a prior used trademark with reputation
  • massive filing of trademarks without the intention of use
  • the filing of a celebrity’s personal name

Cases of note

It is worth highlighting in particular those cases described as the ‘massive filing of trademarks without the intention of use’. Such registrations are now prohibited by Article 44 of the new Trademark Law and article 24 of the published Provision as registrations: ‘obtained by other illegitimate means’:

Article 44 of Trademark Law: ‘A registered trademark shall be declared invalid by the trademark office if it is in violation of Article 10, Article 11 or Article 12 of this Law, or its registration is obtained by fraudulent or other illegitimate means. Other entities or individuals may request the trademark review and adjudication board to declare the aforesaid registered trademark invalid.’

Article 24 of the Provision: ‘With respect to those who disrupt the trademark registration order, harm the public interests, improperly exploit public resources or make illicit gains by using means other than fraud, the Court may determine that it falls under the “other illegitimate means".’

Cases that fall under this description include:

  • Victoria's Secret v Qing Peng Cosmetic Ltd

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Qing Peng Cosmetic Ltd registered the trademark(no. 9924701) in class 3 in 2012. In 2014, Victoria's Secret, which produces the perfume Sheer Love filed a declaration of invalidation against the registration. The declaration was initially rejected by the Chinese Trademark Adjudication and Board (TRAB). However, the trademark was successfully cancelled during appeal proceedings before the Beijing IP court.

In its decision, the court found that the trademark applicant had filed more than 700 trademarks and sold some of them after the registration. Of those registrations, more than 100 oppositions and 20 declarations of invalidations were filed by Victoria's Secret alleging infringement.

The court found for Victoria’s Secret, ruling that Qing Peng Cosmetic Ltd mass registrations constituted ‘other illegitimate means’, and harmed the public interest and improperly exploited public resources.

  • Shisiedo Co Ltd v Mr Ma Wanchun

Mr Ma Wanchun registered the trademark

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(no: 5086142) in class 26 in 2005. In 2009, Shisiedo, owner of the trademark 怡丽丝尔 ELIXIR (as registered in numerous classes) filed a declaration of invalidation against this mark.

The declaration was initially rejected by TRAB but, on appeal, the Beijing IP Court cancelled the mark.

In this case, the court found that the Mr Ma Wanchun had not only filed the trademark in question, but also more than 50 trademarks including many other reputed trademarks such as 杜莎夫人 (Marie Tussaud) etc.

The court considered that even if the proofs submitted by Shisedo were not enough to prove that its mark is well known and benefiting from cross-class protection, Mr Ma Wanchun’s activity still falls under ‘other illegitimate means’ since he has copied other used and reputed marks, and has registered them in different classes without the intention of use.

  • Goat-EE Co Ltd v France Oushang International Group Co Ltd

A Chinese company named France Oushang International Group Co Ltd (registered in Hong Kong) registered the trademark

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(no: 13014848) in class 25 in 2014. In 2015, the Japanese company Goat-EE, owner of the SAKAYORI trademark filed a declaration of invalidation against the mark. The declaration was upheld by TRAB.

The Beijing IP Court confirmed the cancellation of the registered mark and found that, in addition to the disputed mark, the applicant had registered many other trademarks that are highly similar to foreign reputed trademarks, for example: “TATOOSH” in class 18; “碧丝黛丽 B.STYLISH”, “卡门法拉 CARMEN CINEFRA”, “朱丽尔敦 JULIET DUNN”, “斯法尼卡雷拉 STEFANIA CARRERA”, “尼科马克 NICOLAS & MARK”, “弗曼诺伊 HUMANOID” in class 25; and “KENZO” in class 20. It also accepted the evidence that the applicant intended to sell these trademarks.

A major step forward

In these rulings, Beijing’s IP Court considered that such bad faith filings not only infringe the rights of legitimate entities in the market, but also violate the principle of good faith in the application for trademark registration and in the use of trademarks.

All these decisions show that important progress is being made in the battle against bad faith trademark filings, and that China’s IP court have take a major step forward in fighting such acts.