TRADEMARK SQUATTING
In fact, the Supreme Court of China had already indicated in the (unfair competition) Ferrero case that when deciding the degree of reputation of a product, it is permissible to take into consideration the reputation abroad.
“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.”
However, in view of the aforementioned 2010 opinion, which imposes use in China, it is not clear if the courts would still uphold such a decision.
What if bad faith is revealed after registration?
Lacoste, the owner of a famous crocodile trademark (Figure 5), successfully acted against a look-alike green crocodile trademark (Figure 4), which is a transformation of a registered trademark in respect of clothing (Figure 3).
In 2010, the TRAB ruled in favour of Lacoste and cancelled the registration of the disputed trademark. In the decision, TRAB took the bad faith use of the disputed trademark into consideration, and recognised the confusing similarity between it and Lacoste’s trademark. Te cancellation decision has been confirmed by the Beijing Intermediate Tribunal No. 1.
Futubasha Publisher Co Ltd, on the basis of Article 41.1. Te decisions were maintained by the courts of first and second instance.
In this case, it was established that the applicant, an eyeglass company from Guangzhou, had applied and registered a series of trademarks, all identical to the famous trademarks of other companies, and was selling the trademarks for a profit. Te TRAB and courts considered such behaviour violated the principle of good faith, disrupted the trademark registration order, and harmed the public interest. Terefore the “other unfair means” provision of Article 41.1 was applied to cancel the registrations, not only to protect the interests of a private party, but also to protect the public interest.
More recently, this behaviour of filing foreign trademarks was cited in a recent trademark opposition case against the trademark ‘L’Oréal Paris’, by the American Trademark Trial and Appeal Board. Te board agreed with the applicant L’Oréal, that the Chinese applicant had a history and pattern of filing trademark applications for a wide range of products for which it had no industry-relevant experience, and where the marks in question were identical to some of the best known previously registered trademarks in the country.
Reputation in, or outside, mainland China?
Concerning the requirement of use in the Article 31, the interpretation in the Muji case is particularly useful in the fight against squatters.
Muji is a famous Japanese brand for a wide variety of household and consumer goods, owned by Ryohin Keikaku Co Ltd, and registered in China by a Hong Kong company in 1994. Tis registration was first cancelled by TRAB, and finally by the Beijing Higher Court aſter almost eight years, in 2007.
Te focus of this case was whether use outside mainland China could be accepted as “prior use” mentioned in Article 31. Te Beijing Higher Court held that the purpose of Article 31 of the Trademark Law is to prevent trademark squatting, and that the term “unfair means” in this provision refers to the applicant’s bad faith in taking advantage of the market reputation of the other trademark. So whether, or not, the trademark is used in mainland China is not the prerequisite to apply this provision. As the Muji trademark had been used in Hong Kong, the Hong Kong company’s registration of it was undoubtedly made in bad faith. Te Beijing Higher Court ruled in favour of Ryohin Keikaku and cancelled the trademark registrations of the Hong Kong company.
28 World Intellectual Property Review May/June 2012
Tis case has an echo in the Court of Justice of the EU in a case concerning Calvin Klein and its famous trademark cK. A company, Zafra Marroquineros, had applied for a trademark using the words ‘Creacioneskennya’, but in actual use, the applicant was using the letters ‘cK’ in isolation in large highlighted letters together with the words in very small letters. Te intention to infringe was obvious. Calvin Klein opposed the application. Even though this factor was not taken into account when evaluating the likelihood of confusion, the court added that such intentions and behaviour would constitute a strong basis for a cancellation action against bad faith registration.
Recent judicial trends and a possible revision of the Trademark Law
On December 16, 2011, the Supreme Court issued a new opinion, which, in part, addresses the protection of trademarks (with special emphasis for well-known trademarks). According to Article 18 of this opinion, the court will consider the reputation and distinctiveness of the trademarks, the real intention to use a trademark, the bad faith in trademark use, and make full use of the provisions of Trademark Law to strengthen trademark protection and crack down on trademark squatting and free- riding activities.
www.worldipreview.com
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