One big frustration that many brand owners have met in China is receiving an unfavorable decision of opposition or invalidation or litigation, informing that your case is not supported because the evidence is not sufficient to prove your claimed facts. Looking at the hundreds of or even thousands of pages of evidence which have been submitted to the TMO or TRAB or the Court, brand owners usually find it hard to understand the decision. Still NOT sufficient? Really? Why?
This whole matter of "sufficiency of evidence" is like a myth to many brand owners, especially those from foreign countries where the legal system and examination criteria differ from China. Such difference exists not only in the specific types of evidence required in forming a complete chain of evidence, but also the formality requirement of documents which would affect the validity and evidential effect of the material.
Evidence most needed in trademark cases in China can be categorized into the following groups according the types of facts to be proved: 1) trademark use; 2) trademark reputation; 3) bad faith; 4) business relationship; 5) similarity of trademarks; 6) similarity of goods/services; 7) copyright. We will discuss about each group of evidence one by one, with a focus on the common misunderstanding and ambiguous parts.
1) Trademark Use
Such evidence is widely used in trademark cases, such as opposition of invalidation based on the ground of prior use and reputation over the same/similar goods/services, or the ground of well-known trademark, defense in non-use cancellation, and trademark infringement litigation which may include the trademark use by the infringer and the genuine trademark use by the trademark owner.
According to China Trademark Law, Art. 48: The use of trademarks as stipulated in this Law refers to the affixation of trademarks to commodities, commodity packaging or containers, as well as commodity exchange documents or the use of trademarks in advertisements, exhibitions, and for other commercial activities, in order to identify the source of the goods.
In practice, the following types of evidence either independently or in combination with others can prove the trademark use:
- Sales contract, purchase order or invoice showing the goods or services using the trademark is sold to China mainland during the prescribed time period. Sounds simple and clear? In fact, there are many hidden factors that foreign companies may not be totally familiar with. For example, if such document is an electronic version without execution of both parties, which indeed happens quite often, it will be considered as a self-made document without evidential effect. The document should be stamped with the official seal of the Chinese counterpart instead of only signed by its representative. Such "official seal" should include the complete Chinese name of the company and should be identical with the seal recorded at the AIC office. Some companies may have seals with their English names, but such seals are not official and agreement executed with such English seal may have the risk of not enforceable against the Chinese company. As the name of the Chinese company shown in the contract or purchase order or invoice is usually in English as the rest content thereof, in order to prove the identity of Chinese company, it is advisable to obtain a photocopy of its business license as well, which include the officially recorded Chinese name. Sometimes, the examiner or judge may doubt whether the sales contract is actually performed by the parties, if there is no other supporting evidence, such as the payment proof from bank, bill of lading, etc.;
- Customs declaration form showing the goods using the trademark are imported into China mainland. Such form should be stamped with the official seal of the Customs;
- Audit report showing the sales amount of the goods/services using the trademark in China mainland. Some companies have general audit report, which might not be helpful if it does not state explicitly that the numbers are only related to the certain trademark over certain types of goods/services;
- Shop/office lease agreement showing the venue of sales of goods/services using the trademark in China mainland;
- Company brochure, product catalogue, and other promotional material. Such material are usually considered as self-made evidence with little evidential effect by itself, but can be used in combination with other evidence, in order to give clearer visual impression of how the trademark is actually used. One tip is to print the year at the front or back cover to indicate the time of use. If the brochure or catalogue is in English, such evidence may be considered irrelevant to China market, because businesses in China normally use Chinese language in promotion;
- Advertisement or exhibition record and the related contract or invoice showing the goods/services using the trademark is advertised or presented in exhibition in China mainland. Similar to the formality requirement of sales contract mentioned above, the related contract also need to executed properly;
- Audit report showing the advertisement expenses over the goods/services using the trademark in China mainland. Similar to the sales audit report, it should specifically list the numbers for the certain trademark and certain goods/services, instead of a general audit report of the company;
- Notarized affidavit by Chinese distributor. Sometimes, if the trademark owner did not sign the sales contract or cannot find it or the sales contract does not meet the formality requirement, an option would be asking the Chinese distributor to issue and notarize an affidavit stating that it has such business relationship with the trademark owner and conducted distribution of the goods/services using the trademark during certain period, and attach its own business license photocopy. Such affidavit though is weaker than a formal and properly executed contract, is still useful to some extent, and can be used in combination with other available evidence.
A frequently asked question is whether OEM is trademark use. Though it is still an arguable legal issue debated for years in China, there has been several decisions made by the Supreme Court which may shed some light on it, i.e. in the Muji case in 2012, the Supreme Court held that the evidence of OEM in China is not sufficient to establish the claimed "prior use and reputation" of Muji's trademark in China; in the Pretul case in 2015, the Supreme Court held that the defendant's OEM activity does not constitute trademark infringement because the goods bearing the trademark are all exported to Mexico without distribution in China. Both decisions seem to indicate that OEM is not trademark use, however in non-use cancellation cases, such OEM evidence is still acceptable as use evidence to overcome the cancellation.
2) Trademark Reputation
The reputation of a trademark is an important fact in opposition or invalidation or litigation based on the ground of prior use and reputation over the same/similar goods/services, or the ground of well-known trademark, trademark infringement litigation and unfair competition litigation.
Sometimes, people may confuse "trademark reputation" with "trademark use" and provide wrong evidence. We can understand "trademark use" as certain action done by the trademark owner, while "trademark reputation" as the result or reaction from relevant public. The following types of evidence either independently or in combination with others can prove the trademark reputation:
- Search report from China National Library which is a formal report including photocopies of newspaper, magazine, book and online publication where the trademark is mentioned. The report is stamped with the official seal of China National Library, and thus is usually considered as strong evidence;
- Notarized webpage, such as search result from Baidu with the keyword of the trademark, news or article which mentioned the trademark. The possible defect of such evidence is the date of printing and notarizing the webpage is usually later than the period concerned, such the filing date of the opposed mark, even though the content of the webpage may include date of the news or article, it is always considered weak and suspicious as the content online can be edited easily;
- Awards & honor related to the trademark in China mainland, either issued by the government, association of the industry or the media. However, it might be rare for foreign brand owners to receive awards and honors in China;
- Survey report issued by professional investigation company, showing that the relevant public in China is familiar with the trademark. However, the validity of survey report is questionable due to the limited number of samples, the way of asking questions, the geographical area covered, the credibility of the investigation company, etc.
3) Bad Faith
In cases where we argue the opposite party has bad faith, we must also submit solid evidence to prove so, instead of claiming "obvious bad faith" only based on the fact that the trademarks are identical to each other. As "bad faith" is by nature a kind of mind status, it can only be indirectly suggested based on the actions conducted by such person. The following evidence may be considered useful in supporting the claim of bad faith:
- Record showing the opposite party also copied many other famous marks. There is no clear criteria as to how many or how famous are the marks copied. It would be at the examiner's discretion to determine whether it is sufficient to show the bad faith.
- Notarized document showing the opposite party has tried to mislead the consumers about the origin of the goods/services, such as notarized brochure of the opposite party which states that its company is a subsidiary or distributor of the real brand owner, but it is not true.
Sometimes, brand owners conduct investigation against the opposite party, and in the conversation with the investigator, the opposite party admitted the intentional imitation of the foreign brand. However such oral confession whether in the form of investigation report, or voice record, or even notarized voice record, usually might not be sufficient to prove bad faith, as the identity of the person would be hard to prove.
4) Business Relationship
According to China Trademark Law, Art 15: A trademark shall not be registered and its use shall be prohibited if the agent or representative of the person who is the owner of a trademark applies, without authorization, for the registration of the trademark in his own name and if the owner raises an opposition.
Where a trademark for which a registration is applied is identical or similar to an early used trademark of another party that is not registered, in respect of the same or similar goods, and where the applicant being of contract, business or other relationship except the relationship referred to in the preceding paragraph, is fully aware of the existence of the trademark owned by the other party, the trademark shall not be registered, if the other party raises an opposition.
The threshold of evidence required for proving the "agent or representative" relationship (Art. 15.1) is higher than the evidence for proving the "contract, business or other relationship" (Art. 15.2). The following types of evidence may be useful to prove such relationship:
- Contract between the trademark owner and the opposite party which should be entered before the filing date of the opposed trademark, and the name of the opposite party should appear in the contract as a party thereof. However, if the company name in the contract is in English, it is also necessary to prove it is the same company.
- Correspondences between the trademark owner and the opposite party, showing that the two parties had contact with each other before the filing date of the opposed trademark, and the opposite party had known about the brand belongs to the trademark owner before filing it in China. If such correspondences are in the form of email, it is necessary to notarize it, and even legalize it if the notarization is done in a foreign country. Whether the sender or receiver of the email is the same company of the opposite party is usually doubted especially if they use private email address such as yahoo or gmail, instead of the company email address.
It would be ideal to have the above two types of evidence to prove the direct relationship or contact between the trademark owner and the opposite party, however, in reality the relationship is often indirect. For example, the opposite party is a company established by the ex-employee of the Chinese distributor of the trademark owner. In such case, a complete evidence chain should be built to prove each relationship, i.e. distribution contract between the trademark owner and the Chinese distributor, employment contract between the Chinese distributor and the ex-employee, and the business license or company registration record showing the ex-employee is the founder of the opposite party.
5) Similarity of Trademarks
When arguing the similarity of two trademarks, apart from comparing them in respect of appearance, pronunciation and meaning, the following types of evidence may also be helpful:
- Proof showing the opposite party has intentionally used the trademark in the manner easy to confuse or mislead the consumers;
- Proof of actual confusion caused, such as complaint letter from consumers, affidavit from relevant public.
6) Similarity of Goods/Services
When arguing the similarity of the goods/services in respect of the function, characteristics, sales channel, and target consumers, the following types of evidence might help especially when such goods/services do not fall into the same subclass according to Chinese Classifications:
- Picture showing the goods are presented in the same or nearby counter, or sold in set to consumers, so that the likelihood of confusion would be high;
- Proof showing the goods are used in combination or as part of each other;
- Precedents showing such goods/services are decided similar in other trademark cases. Though the principle of case-by-case examination always applies, precedents, especially those decided by the Court, would bear some weight to show the reasonable examination criteria applied in the precedents could be applied the present case.
When claiming prior copyright against the opposite party's trademark, the following three facts need to be supported by evidence:
- Copyright ownership: According to Article 7 of Supreme Court Interpretation on Issues of Applicable Laws for Copyright Civil Dispute Cases: Documents concerning copyright, such as manuscript, original copy, legitimate publication, copyright recordation certificate, certification issued by certifying organization or contract of ownership, can serve as evidence of copyright. In practice, mere copyright recordal certificate and self declaration are not sufficient to establish ownership of copyright
- The opposite party's trademark is identical with or substantially similar to the copyright: the examination criteria over similarity in respect of copyright are different from that between trademarks, which is due to the difference of the nature of trademark and copyright, i.e. the former is for distinguish the sources, and thus focuses on likelihood of confusion; whereas the latter is for protect the work itself, and thus focuses on whether one is a copy from another, either as a whole or partially.
- The opposite had the accessibility to the copyright before filing the trademark, which is usually proved by evidences of "publication", such as advertisement and promotional material.
Some other formality requirement of evidence in general include
that evidence generated in foreign country need to be notarized and
legalized, evidence in foreign language need to be translated into
Chinese, and any late filing of evidence after the prescribed
deadline need to have reasonable justification for the delay.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.