China: Q&A Re: Trademark Enforcement And Defense

Last Updated: 4 April 2017
Article by Watson & Band Law Offices

What should be noted when collecting evidence for trademark enforcement?

First of all, it is especially important to retain a professional agency to conduct pre-trial evidence collection. It is advisable to choose people with legal knowledge to conduct investigation and evidence collection, or at least to demand that the investigators act in accordance with instructions from lawyers, so as to ensure the legitimacy of the process and lawful methods of evidence collection. After the completion of evidence collection but before initiating the litigation proceedings, the objective authenticity of the evidence to be submitted should be determined through examination.

Secondly, the rights owners should exercise their rights promptly. In litigation cases, since the courts determine case facts based on admitted evidence, and since objective facts will gradually become diluted over time, the risk of loss of the relevant evidence will also increase correspondingly. Consequently, if rights owners do not enforce their rights in time, difficulties in late evidence production will be compounded and the likelihood of success in litigation will decrease. As the old legal saying goes, "the law does not protect the rights of sleepers". As a result, once a rights owner discovers an infringing party and supporting facts, it should actively seek remedy through all legitimate approaches.

Last but not least, rights owners should pay attention to pre-trial evidence collection. When a rights owner discovers a suspected infringing product, it can first try to purchase the product and hand it over to professionals for an infringement analysis, based on the conclusion of which it may consider whether to proceed with a notarized purchase or a complaint with the appropriate AIC office.

Why should evidence of use of a trademark be preserved?

According to Article 49 of the P.R.C. Trademark Law, if a registered trademark has not been used for three consecutive years without due cause, any entity or individual can file a revocation request with the Trademark Office. Consequently, anyone from the general public can submit a request to the Trademark Office to revoke a registered trademark based on non-use for three consecutive years without due cause. Upon receiving the revocation request, the Trademark Office will notify the registrant of the disputed registered trademark and demand that the registrant submit evidence proving the use of the trademark or due cause for non-use within two months of receiving the notice. If no evidence is submitted during this period, or if the evidence submitted is deemed invalid or the reason for non-use is deemed invalid, the registered trademark in dispute will be revoked.

Since enterprises usually cannot predict when a revocation request based on non-use for three consecutive years will occur, it is especially important to preserve evidence proving the use of their trademarks in commerce, so as to be ready to respond to any future revocation request.

What kind of evidence of use trademark should be preserved?

Use of a trademark under the Trademark Law refers to use of the trademark on the goods, packaging or container of the goods and transaction documents in connection with the goods, or use of the trademark in advertising campaigns, exhibitions or other commercial activities, for the purpose of identifying the source of the goods.

Specific forms of use of a trademark on the designated goods may be summarized as follows:

  1. Affixing the trademark to the goods or the packaging, container or label of the goods by directly attaching, stamping, engraving or weaving; or using the trademark on the additional tag, product description, introductory manual or price list for the goods;
  2. Using the trademark in transaction documents in connection with the sale of the goods, including use on sales contracts, invoices, bills, receipts, import and export inspection and quarantine certificates, customs declaration documents, etc.;
  3. Using the trademark on media such as radio broadcasting or television, or publishing the trademark, or conducting advertising campaigns for the trademark or the goods using the trademark on advertising boards, direct mail advertisements or other means;
  4. Using the trademark at exhibitions or expositions, including providing printing or other materials using the trademark that are provided at such exhibitions or expositions;
  5. Other forms of use as may be permitted by law.

What requirements apply to evidence of use of a trademark?

Evidentiary materials proving that the trademark in dispute has been used during the past three consecutive years should meet the following requirements:

  1. They reveal that the trademark used is the trademark in dispute;
  2. They reveal that the trademark in dispute is used on the designated goods;
  3. They reveal the user of the trademark in dispute, which may include both the trademark registrant and other parties licensed by the trademark registrant; in the event of a license to other parties, the existence of the license to use should be proven;
  4. They reveal the date that the trademark in dispute was used, and that the use took place within the three years prior to the date that the revocation request was filed;
  5. They prove that the use of the trademark occurred within the borders of the People's Republic of China;
  6. They prove that the trademark in dispute was openly, faithfully and legitimately used in commerce.

It is worth mentioning that publication of trademark registration information or statements by trademark registrants regarding their exclusive rights to use the registered trademarks does not constitute "use" of the trademark under the Trademark Law. Moreover, where the trademark registrant or licensee has used the registered trademark on goods under a designated class, registration of the trademark under a similar category can prove use.

Suggestions on consolidating the effect of evidence of use of a trademark

In order to consolidate the effect of evidence of use of a trademark, the author suggests preserving original documents of the core evidence of use of the trademark, and regularly conducting notarization of the originals.

For example, a clothing enterprise could consider taking the following routine measures:

  1. Preserve the originals of sample clothes and related packaging bags, packaging boxes, hang tags, collar labels or wash care labels (e.g. preserve two sets of the aforesaid originals each year), and notarize the same by means of photographs once every three years;
  2. Preserve the originals of sample transaction documents in connection with the production and sale of the clothes (e.g. preserve five transaction documents involving relatively large amounts each year), and notarize the consistency between the originals and the photocopies once every three years;
  3. Preserve the originals of various sample advertising materials including magazines, newspapers publishing the advertisements, advertisement publication or production contracts and the corresponding invoices, etc. (e.g. preserve five advertisements with relatively strong influential power each year), and notarize the consistency between the originals and the photocopies once every three years;
  4. Preserve the originals of sample exhibition-related materials, including the exhibition contract and the corresponding invoices, certificates of participation in the exhibitions, exhibition booth design contracts and the corresponding invoices, photos of the exhibition booths, etc., and notarize the consistency between the originals and the photocopies once every three years.

Other countermeasures to revocation requests based on non-use for three consecutive years

The author suggests that for certain important core trademarks, enterprises can consider the strategy of re-registration once every three years. In that way, even if a prior registered trademark should be revoked by another party, the re-registered trademark would leave no room for a revocation request by any other party, since it has not been three years since the re-registration. Consequently, the enterprises' trademark rights can be effectively continued.

Cross-class protection is also available for non-well-known trademarks

Is it true that cross-class protection applies only to well-known trademarks? A number of trademark granting and confirmation cases successfully processed by Watson & Band provide a different answer – cross-class protection can be applied in the absence of recognition of well-known trademarks. Such a point of view was first supported by the Trademark Review and Adjudication Board, and later affirmed by the Beijing courts in subsequent administrative litigation proceedings.

How can cross-class protection be applied to non-well-known trademarks?

Trials of trademark granting and confirmation cases are different from the examination of trademark registration applications in that they carry a unique systematic function and value orientation that attaches more importance to the protection of specific civil rights and interests. Consequently, for this kind of case, more consideration should be given to the factors and actual conditions of each specific case. The above-mentioned case took into consideration not only similarities in the physical properties of the goods, but also the connection between the goods and the subjective state of the preemptive registrant of the trademark. The outcome of the case is substantially consistent with the spirit of curbing preemptive trademark registrations as prescribed in the Opinions of the Supreme People's Court on Several Issues Concerning the Trial of Trademark Granting and Confirmation Cases.

The reasons why Watson & Band succeeds in obtaining cross-class protection in the absence of well-known trademark recognition arose from our emphasis on and highlighting of the following factors in each specific case: (1) the distinctiveness and reputation of the cited trademark; (2) the extent of similarity between the trademarks; (3) the extent of association between the goods; and (4) the subjective intentions of the preemptive registrant of the trademark.

(Abstracted from: Notes on Enforcement Actions for Rights Owners in View of the GUCCI Trademark Infringement Case, by He Tao)
(Abstracted from: Cross-Class Protection Also Available for Non-Well-Known Trademarks, by Liming Zhang)

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.

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