A 12-year battle against a bad-faith trademark application

By Bai Gang and Lei Yongjian, Wanhuida Peksung
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Akris Pret-A-Porter AG (Akris AG), a famous Swiss fashion company, is the owner of a series of trademarks using the word AKRIS, including the International Registration No.G637645 “PUNTO AKRIS” in Class 25 with territorial extension to China as early as 1995.

白刚 BAI GANG 万慧达北翔高级合伙人 Senior Partner Wanhuida Peksung
白刚
BAI GANG
万慧达北翔高级合伙人
Senior Partner
Wanhuida Peksung

In 2003, a Hong Kong company called France Benny International Enterprise Group filed a trademark application for “A-K-R-I-S-” No. 3499689 in Class 25 covering goods “clothing, shoes, hats etc.”, which was preliminarily approved by China’s Trademark Office in January 2005. In 2014, the mark was assigned to a Shanghai company, Gu Bai Tools (Shanghai) and then again, in 2015, to another Hong Kong company, Akris (Hong Kong) Limited.

In 2005, Akris AG filed an opposition against the “A-K-R-I-S-” trademark based on its prior “PUNTO AKRIS” mark. In 2009, a natural person surnamed Liang filed a non-use cancellation action against the PUNTO AKRIS mark before the Trademark Office. Akris AG’s opposition was dismissed by the Trademark Office on 1 July 2009, but the situation was later reversed by the Trademark Review and Adjudication Board (TRAB) in the opposition review procedure concluded on 11 November 2013. However, on 3 March 2014, the Trademark Office’s cancellation decision against Akris AG’s PUNTO AKRIS mark based on non-use was upheld by the TRAB. Therefore, when Gu Bai Tools, the then owner of the opposed trademark, appealed before the Beijing First Intermediate Court against the TRAB’s opposition review decision disapproving the trademark application, it was inevitable that Akris AG would lose: it had no more prior right to support its opposition.

In the second instance before the Beijing High Court, Akris AG had to change its litigation strategy by shifting the focus from its prior registration (Article 28 under the 2001 Trademark Law), which had ceased to exist, to the bad faith of Gu Bai Tools (Article 44.1 under the 2014 Trademark Law). It was found that the three successive owners of the opposed mark, France Benny, Gu Bai Tool and Akris (Hong Kong), had intertwined shareholder relations and that besides the opposed mark, the original owner France Benny had also filed a startling number of trademark applications for world famous brands including “EDEN PARK”, “TODS”, “LLADRO”, “C.P.Company” and “MAPPIN & WEBB”.

雷用剑 LEI YONGJIAN 万慧达北翔合伙人 Partner Wanhuida Peksung
雷用剑
LEI YONGJIAN
万慧达北翔合伙人
Partner
Wanhuida Peksung

On 20 April 2015, the Beijing High Court rendered a decision upholding the judgment of first instance rejecting Akris AG’s opposition, and referred the case back to the TRAB for a new decision to be made. However, the Beijing High Court specifically instructed the TRAB to examine, in its new decision, the above mentioned bad-faith facts.

On 28 October 2015, the TRAB made a re-examination decision affirming that France Benny’s filing of many other reputed trademarks, without the intention of use, caused damage to the trademark registration order and was in contradiction with the principle of good faith. Therefore, the TRAB maintained its initial decision to refuse the registration of the “A-K-R-I-S-” trademark, but this time on the basis of Article 44.1 (“trademark registration acquired by fraud or any other unfair means”) of the 2014 Trademark Law.

In 2016, Akris (Hong Kong) appealed against the TRAB’s new decision before the Beijing IP Court claiming that the evidence was insufficient to prove France Benny’s unfair filing of those trademarks and that the application of Article 44.1 was erroneous because that article only deals with registered trademarks, and not with trademark applications.

During the appeal before the Beijing IP Court, Akris AG initiated another legal action in Hong Kong, successfully forcing, on 13 February 2017, Akris (Hong Kong) to change its misleading trade name from Akris (Hong Kong) Limited to Huitong Trading Development Limited.

On 19 April 2017, the Beijing IP Court maintained the TRAB’s opposition decision of disapproval. The “A-K-R-I-S-” case was selected as one of the 18 exemplary cases concerning bad faith trademark filing, released by the Beijing IP Court on 24 April 2017, two days before the World IP Day. Wanhuida Peksung represented Akris AG before the Beijing High Court and Beijing IP Court.

FIGHTING PREEMPTIVE FILINGS

In recent years, the Chinese authorities and courts have been ramping up efforts in fighting preemptive trademark filings. In the above case, the TRAB made two decisions in succession to refuse the registration of the opposed mark, one based on the relative ground of Akris AG’s prior registration of “PUNTO AKRIS” and one on the absolute ground of bad faith when the prior registration has ceased to exist.

The Beijing High Court took full account of Akris AG’s new evidence and new arguments concerning the bad faith. However, since these facts and arguments had not been raised and discussed before the TRAB in the opposition procedure, the court was not at liberty to make any adjudication on them, in its decision. However, the court found a way to bypass this procedural obstacle by “neutrally” directing the TRAB to pay attention to these points in its new decision.

In the new appeal against the TRAB decision, the Beijing IP Court explained in its judgment that Article 44.1 not only applied to invalidation cases against bad-faith registered marks but also to opposition procedures against trademark applications. According to the IP court, the legislative intent of Article 44.1 is that it should be flexibly applied whenever it is necessary to deter bad faith trademark filings.

This 12-year battle, which lasted since 2005, resulted in a victory for Akris AG, but the battle does not seem to be over yet. Another company named Akris (Shanghai) Apparel, which was established in June 2016, filed in February 2017 some new A-K-R-I-S- trademarks that are still pending for examination before the China Trademark Office. The bright side is that Akris AG’s trademark applications predate most of them.

Bai Gang is a senior partner and Lei Yongjian is a partner at Wanhuida Peksung

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