Timing crucial for implementation of trademark strategies

By Frank Liu, TianTai Law Firm
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Many factors have to come into play for customized trademark strategies to operate. In addition to the selection and speed of actions to take, timing is also crucial. Besides, the timing of the action to take is also the most flexible and most difficult in the implementation of strategies.

FRANK LIU Partner Tiantai Law Firm
FRANK LIU
Partner
Tiantai Law Firm

IMPORTANCE OF TIMING

After a strategy is formulated, all actions to be taken in the strategy require proper time nodes, as well as mutual cooperation and implementation. This is the only way to achieve the best effect. As far as a single action is concerned, any timing loss may result in complete failure ultimately. If an overall strategy includes many actions, any delay in the timing of the key move may also cause the failure of the overall strategy.

The loss of the timing for common action may also be remedied through the adjustment of the schedules of other moves set up in a system, but, at least, this will cause unnecessary losses of manpower and material resources, plus a delay of the realization of the ultimate goal.

UNDERSTANDING TIMING

Whether establishing trademark rights or dealing with enforcement, opportunities to take action are very significant. It is not necessary to take immediate action each time an infringement is uncovered. However, it is required to know comprehensively the number of infringers, plus infringement scope and methods of each infringer, as well as the effect on the businesses of the owners of the rights and other factors, before arranging different actions in the proper time. Additionally, during the different stages in the progress of cases, responding to reactions of counterparties also needs a profound understanding about and great grasp of timing and opportunities.

GRASP OF TIMING

The grasp of timing needs to be understood in any specific case. The grasp of timing is analyzed through the following trademark-establishment case, infringement lawsuit and raid action.

In China, many owners of rights are required to extend the application scopes of trademarks in the relevant types to establish a trademark defence system. However, some registered trademarks not in use for three consecutive years will be cancelled, referred to as “non-use cancellation”. As the Trademark Review and Adjudication Board and courts presently have higher standards for evidence on the use of trademarks, many owners of rights reapply themselves for same trademarks before the end of the three-year period of not using the trademarks.

However, as some owners of rights also feel expenses for applying every three years are high, so they intend to submit applications after others have filed the non-use cancellation. There is a period between the time owners of rights receive notices of non-use cancellations and the expirations of three-year trademarks that are applied to be cancelled for non-use in three years. If an original trademark is finally revoked, and a third party applies to register the same in the time slot, the original owner would be hindered, which means that, when the original owner reapplies for the trademark on receiving a notice of non-use cancellation, he (she) loses the opportunity to retain the trademark. Loss of the trademark right in this case was entirely due to the improper grasp of timing.

In a trademark infringement case we handled, our client, on the one hand, was not satisfied with the partial results on the judgment of second instance, and wanted to bring forward a retrial. On the other hand, the client wished to clear up the infringing products in the market by taking advantage of the effective judgment in the second instance. Therefore, we made the best use of the timing after the judgment came into force to take urgent action, clearing the infringing products in the market. Meanwhile, we successfully applied for a retrial within the specified six-month period and got full support of the Supreme Court. The successful handling of this infringement case was typical of making the best of the opportunity of time slots for trial procedures to achieve two goals.

In practice, a proper grasp of timing has a positive effect, while not paying attention to it has the obvious negative impact of financial losses. When a brand owner discovered that a small shop in the market sold infringing products, he (she) immediately made administrative complaints, without investigating the matter or analyzing the infringement background. The Administration for Industry and Commerce (AIC) also immediately raided the shop and imposed a punishment on it.

However, after the event, the brand owner learned that the shop was only a small distributor involved in another infringement case in which he (she) had invested numerous resources to investigate. Also, the AIC’s hurried raid on the shop alerted the wholesalers and producers, who had a bigger influence on the brand owner in another case, and gave them ample opportunity to conceal evidence of the infringement. As a result, the brand owner lost the chance to continue to pursue the legal responsibilities of the wholesaler and the producer.

It is clear that the grasp of timing for trademark strategy requires combining the specific background of any case and the actions to be taken. It calls for careful analysis and looking into the matter in its entirety, before deciding on the action to take, based on planned timing. Ultimately, this ensures the effective implementation of the strategy.

Frank Liu is a partner at TianTai Law Firm

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