China and France diverge in major aspects of trademark legislation such as genuine use and tolerance.
French trademark law was devised by an ordinance dated 13 November 2019, which brought French law in line with the European Trademark Directive of 2015. This implied profound changes and it is interesting to draw a comparison between the new French law and China’s current Trademark Law in two important aspects: genuine use and tolerance.
Genuine use: a prerequisite condition for enforcement of the trademark. Article L.716-3 of the French law poses the same principle as article 49 of China’s Trademark Law: If a registered trademark is not used for a certain length of time, it may be revoked upon the request of any person. The duration of the grace period is different (five years for Europe and France, three years for China), but the principle is the same – no use may cause revocation of the trademark.
The new French law provides another drastic consequence to the absence of genuine use – an unused trademark cannot be enforced. In practice, when a trademark has been registered for more than five years, if the trademark registrant files an opposition, an invalidation or a civil litigation against a third party using a contested trademark, such third party may request the trademark registrant to justify that it has genuinely been using its trademark before a certain date. Failure to prove such genuine use will cause the request to be refused.
The date before which the use needs to be proven depends on the type of action. For an opposition, the date is the filing date (or priority date) of the contested trademark. For an invalidation action, the date is the filing date of the invalidation request and the filing date (or priority date) of the contested trademark, and it is necessary to prove that the genuine use had taken place during both periods. And finally, for an infringement action, the date is the filing date of the infringement action before the court.
The Chinese law shows, to a certain degree, some similarities. Article 64 provides that the defendant to an infringement action may request the plaintiff to prove that it has used the trademark during the three years preceding the introduction of the action, even if the plaintiff’s trademark has been registered for less than three years. Failure to bring such evidence of use results in the defendant’s being exonerated from the financial liability for infringement, unless the plaintiff is able to prove other losses. Meanwhile, the court shall still rule on the infringement and order the activity to stop, even if the plaintiff’s trademark has been registered more than three years and is still not used.
There are two main differences with the new French law. The first is that in France the use condition is a requisite for acceptation of all cases, whether administrative or civil, in their entirety, not just a condition for obtaining damages. The second difference is that, while French law excludes the first five years following the registration of the trademark, Chinese law does not take this period (three years) into consideration. This means that a plaintiff who acts on the basis of its newly registered (but still unused) trademark, cannot obtain any compensation. China might find some inspiration in the French model; it might help avoiding artificial conflicts between dead wood (prior unused trademarks) and later trademarks.
Tolerance and coexistence
When a registered trademark owner tolerates the use of a later identical or similar trademark registered for identical or similar goods or services, during a certain time, it should be precluded from taking invalidation or infringement action, once such time has expired. The concept of tolerance is clear – the word is self-explanatory. Yet, this is probably one of the issues where China and European/French law diverge the most.
While the concept of tolerance is strictly defined in the European and French systems, it is only indirectly mentioned in China’s Trademark Law, in very vague and open terms, in a document called “Guidelines”, recently issued by the Beijing High People’s Court, on 24 April 2019.
In Europe and France, if the earlier trademark owner has tolerated the use of a later registered trademark for a period of five consecutive years, while being aware of such use, it is no longer admitted to request the invalidation of the later trademark or to take infringement action (articles L.716-2-8 and L.716-4-5 in the French law). Of course, if the later trademark has been filed in bad faith, the five-year limit does not apply.
In China, regardless of whether a trademark has been used or not, five years after its registration, no invalidation action is possible (article 45.1 of the Trademark Law). The five-year period is automatic. The only exception is where the invalidation is requested by an earlier well-known trademark (i.e., a trademark that was already well known when the later trademark was applied for registration) that, in addition, is able to prove that the later trademark has been filed in bad faith.
The Beijing High People’s Court Guidance (article 15.4), which concerns cases where the application for registration of a later trademark is challenged, sheds a different light on the concept of coexistence:
“If the applicant of the litigious trademark has no bad faith, and due to specific historical reasons, the litigious trademark and the cited trademark have been coexisting for a long time, so much so that an established market pattern has been formed, where a party concerned claims that the coexistence of the two trademarks will not cause confusion among the relevant public, these trademarks may be determined to be dissimilar…”
Where the EU and France focus on the earlier registered trademark owner’s attitude (if he/she tolerated the situation long enough that he/she can no longer complain), China relates on either a fixed time (beyond which no invalidation is possible), or some undefined concepts such as “historical reasons” or “coexisting for a long time”. No mention is made of whether the earlier trademark owner has known the use of the later trademark, or whether, knowing it, he/she has refrained from taking any action or, on the contrary, has expressed disagreement.
Paul Ranjard is a partner at Wanhuida Intellectual Property. He can be contacted on +86 10 6892 1000 (ext. 388) or by email at email@example.com
Huang Hui is a partner at Wanhuida Intellectual Property. He can be contacted on +86 10 6892 1000 (ext. 201) or by email at firstname.lastname@example.org
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