Courts toughen up on bad faith trademark applications

By Ming Xingnan, Lu Xue and Wang Yan, Wan Hui Da
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In the just-ended series of events for World Intellectual Property Day aiming to promote public awareness of intellectual property rights, the Trademark Review and Adjudication Board (TRAB), the Beijing Intellectual Property Court and the Beijing High Court have unanimously stepped up efforts to crack down on pre-emptive trademark applications filed in bad faith. Tangible progress has been made, as evidenced by some of the authors’ cases.

明星楠 MING XINGNAN 万慧达北翔集团资深律师 Senior Associate Wan Hui Da
明星楠
MING XINGNAN
万慧达北翔集团资深律师
Senior Associate
Wan Hui Da

Protect prior used trademark that has certain influence. Ubiquiti Networks, a Silicon Valley-based high-tech business in the wireless telecoms industry, owns the wireless bridge brand “NanoStation”.

China Goldstar Technology pre-emptively obtained the registration of “NanoStation” in China. Ubiquiti Networks initiated invalidation action against the trademark. The authors managed to prove the use of the “NanoStation” mark by Ubiquiti Networks, and the fact that Goldstar had been simultaneously selling “NanoStation” products, of its own and of Ubiquiti Networks. The court held that the evidence submitted by Ubiquiti Networks proved that it had marketed wireless bridge products bearing the trademark “NanoStation” in mainland China prior to the application date of the disputed trademark.

Given that the disputed trademark was identical with the prior mark of Ubiquiti Networks, and Goldstar’s business is closely related to Ubiquiti Networks, the disputed mark was not likely to be filed in good faith, considering that Goldstar failed to prove any proper cause for filing. The court therefore ruled that the disputed trademark was in violation of article 31 of the Trademark Law.

Protect prior trade name. CPTF Optronics, a wholly owned subsidiary of Taiwan-based Chunghwa Picture Tubes, manufactures displays and picture tubes.

In 2005, a natural person named Wu Wei applied to register the trademark “华映”, which is identical with the Chinese trade name of CPTF Optronics, in computers and LCD displays. CPTF Optronics opposed the applied mark. The court opined that the trade name fell under the prior rights as provided in article 31 of the Trademark Law. The evidence submitted by the opponent proved that it was highly reputable in the colour picture tube industry before the application date of the opposed trademark.

鲁雪 LU XUE 万慧达北翔集团律师 Associate Wan Hui Da
鲁雪
LU XUE
万慧达北翔集团律师
Associate
Wan Hui Da

The opposed mark, which is an exact replica of the opponent’s Chinese trade name, was designated for use on goods closely related to the opponent’s business. The registration and use of the opposed trademark would mislead the public and damage the interests of the opponent. The court thus ruled that the opposed trademark violated article 31 of the Trademark Law.

Prevent pre-emptive applications filed by agent. SOCIETE VITICOLE HENRI LURTON (Henri Lurton) is the owner of French winery Chateau Brane-Cantenac, which owns the registered trademark “BRANE CANTENAC” in France. Shanghai Lucky Horse Wines & Spirits was the sales agent of an affiliated company of Henri Lurton, helping to launch BRANE CANTENAC wines to the Chinese market.

In 2014, Fujian Lucky Horse Group obtained registration of the trademark “BRANE CANTENAC” for wines in China. Henri Lurton applied for declaration of invalidation of the trademark. The court found that the evidence submitted by Henri Lurton showed that in light of the special relationship between Fujian Lucky Horse and Shanghai Lucky Horse, the former should have known the wine brand of Henri Lurton.

Yet Fujian Lucky Horse applied for registration of the disputed trademark that is similar to the “BRANE CANTENAC” mark of Henri Lurton, which was a clear demonstration of bad faith. Chateau Brane-Cantenac is a well-known French winery owned by Henri Lurton. Since Fujian Lucky Horse had no direct relationship with the winery, the disputed trademark, if being used on wines, would be likely to mislead the customers to misidentify the place of origin of the products to which the disputed mark is attached. Therefore, the court ruled that the disputed trademark violated articles 15 and 10.1.7 of the Trademark Law.

Prevent massive trademark preemptive registrations. Akris Pret-A-Porter, a world-famous fashion house, raised opposition to applied trademark “A-K-R-I-S” filed by shell company France Benny International Enterprise Group. After going through the proceedings of opposition, opposition review, and first and second instance court trial, the TRAB, which was ordered by the court of appeal to review the opposition review decision, rejected the application of the opposed trademark. The applicant of the opposed trademark then brought an action before the Beijing Intellectual Property Court.

The opposed trademark had been assigned twice during the previous proceedings, from France Benny International to Coupeau Shanghai, then to Akris (Hong Kong). The opposed Akris (Hong Kong) was ordered to change its name to “Huitong Trading Development Limited” in another case. It is obvious that the original owner of the opposed trademark deliberately assigned the trademark several times in an attempt to launder the pre-emptively filed trademark and clear itself of “filing massive preemptive trademark registrations”.

The Beijing Intellectual Property Court clarified that both trademark registration purported not for use and massive registrations of prior reputable or original trademarks must fall under the circumstance of “acquiring the registration of a trademark by any other unfair means” as forbidden by the Trademark Law, because such act disrupts the trademark registration procedures, damages public benefit and misappropriates public resources.

In the case, the assignors and assignees of the opposed mark are interested parties, without any proper cause to justify the frequent assignment acts. Therefore, the assignment of the opposed mark did not alter the fact that the mark was filed in bad faith.

In general, administrative and judicial authorities should regulate bad faith trademark registrations. The abovementioned court rulings may help deter potential profit-driven trademark applicants and make them realize that no benefit can be gained from bad faith trademark registrations.

Ming Xingnan is a senior associate, and Lu Xue and Wang Yan are associates at Wan Hui Da

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