TRADEMARK SQUATTING
Trademark squatting is becoming big business in China. Foreign trademark owners who have yet to file in China are exposed to the risk of finding that their trademark is already taken. Huang Hui and Yang Mingming explain.
Te reason for the danger of trademark squatting in China is simple: like many countries, China follows a ‘first to file’ system for trademark registration, which means that the person who first files the trademark application obtains the registration.
Some Chinese companies and individuals understand the system well and, aſter careful review of valuable foreign trademarks, take the initiative to file the mark in their own name. All they have to do is wait until the foreign company, unable to register and exploit its trademark in China, approaches them with a view to negotiating a possible purchase. Depending on the reputation of the foreign trademark, a few thousand RMB in investment (for registering the trademark) can generate a big profit (several millions) at sale. Trademark squatting has become a big business in China.
What remedies are available?
Purchasing the squatted trademark is not the only solution. Te foreign trademark owner may choose to fight, and Chinese Trademark Law provides different procedures, depending on the circumstances.
But on what grounds? In the 1993 version of the Trademark Law, there is Article 27.1, requiring the cancellation of a registration acquired “by other unfair means”, which is sub-divided in Article 25 of the implementing regulation into different types of conduct, including the registration of well-known trademarks (25.2), unauthorised registration by agents or representatives (25.3), infringing prior rights (25.4) and other unfair registrations (25.5).
Tese behaviours, aſter the 2001 revision, are regulated by Article 13 (copying, imitating and translating a well-known trademark), Article 16 (unauthorised registration by an agent or representative) and Article 31 (infringing prior rights such as copyright, trade name right, etc, or registering a trademark by unfair means that has been used and enjoys certain reputation), when the term of “by other unfair means” is leſt unchanged in the new Article 41.1.
www.worldipreview.com
As well-known status or reputation through use in China is not easy to prove, the last resort would be Article 41.1 of the Trademark Law.
Is Article 41.1 of the Trademark Law a ‘catch-all’ clause?
Even aſter the new Trademark Law of 2001 came into force, the Trademark Review and Adjudication Board (TRAB) used to think that the provision “acquiring registration by other unfair means” stipulated in Article 41.1 could be a catch-all clause to stop bad faith registration, and mentioned this in its Trademark Review and Adjudication Criteria, indicating that the term “other unfair means” refers to the behaviour of registering a trademark in bad faith with the intention to conduct unfair competition and make illegal profits. For example, in 2005, the TRAB used Article 41.1 to cancel the registration of the trademark ‘Haupt’ which reproduced the trademark used by another company.
However, the Supreme Court held a different view. In a cancellation case against the trademark ‘Chuang Lian in Chinese & Design’, the Supreme Court first expressed its opinion on the applicability of Article 41.1, saying that Article 41 of the Trademark Law refers to absolute grounds of refusal, and may only be applied to protect the public interest, not the civil rights and interest of a specific party. Tis view was confirmed in Article 19 of an Opinion on Several Issues Concerning the Trial of Administrative Cases Involving the Authorization and Determination of Trademark Rights issued in 2010 and constitutes the mainstream opinion now.
Article 41.1 can still work under certain circumstances
A recent case in 2011 offers a line of thought. In 2011, the TRAB ruled to cancel the registration of two trademarks representing the cartoon design (Figure 1) and ‘Crayon Shinchan in Chinese’ (Figure 2), which reproduced the foreign copyright and trademarks of a Japanese company
World Intellectual Property Review May/June 2012 27 Figure 2 Figure 1
Figure 3
Figure 4
Figure 5
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84