Background
A U.S. brand with growing international recognition faced trademark squatting in China when a third party registered its mark domestically in 2020. An initial invalidation action filed in 2021 was unsuccessful. A second attempt was filed in 2023.
Decision
The China National Intellectual Property Administration (CNIPA), which is in charge of trademark filings in China, determined that the disputed registration fell under Article 32 of the PRC Trademark Law, which prohibits the use of improper means to pre-empt the registration of a prior-used mark with certain influence. The CNIPA therefore declared the trademark invalid.
Key Issues
- Possibility of Refiling an Invalidation Action
The first invalidation attempt had already failed, raising the issue of whether a subsequent petition could proceed considering the general principle of ne bis in idem. The CNIPA ultimately accepted the refiling because the petition was based on new evidence and a distinct legal basis.
- Proving Reputation Without Direct Sales in China
The brand had no physical presence, sales channels, or official media activity in China, complicating efforts to demonstrate reputation. Evidence of reputation was instead drawn from indirect but verifiable sources, including online media coverage, third-party sales data, consumer discussions, and cross-border e-commerce activities. The CNIPA finally accepted that such evidence established "prior influence through cross-border dissemination," broadening the interpretation of what constitutes influence in the Chinese market.
Significance
This case illustrates how the CNIPA is willing to consider broader forms of market presence when evaluating trademark invalidations, especially in the context of cross-border e-commerce. The acceptance of indirect evidence of reputation marks an important precedent for foreign brands seeking to combat trademark squatting in China.
For practitioners and brand owners, the case highlights two practical lessons:
- A failed invalidation does not necessarily preclude a second petition, provided it relies on fresh evidence or a new legal argument.
- Market influence may be established even without direct sales in China, so long as evidence demonstrates cross-border consumer recognition and engagement.
Conclusion
By invalidating the trademark, the CNIPA reinforced protections against malicious filings and clarified evidentiary standards in the era of digital commerce. This case provides actionable guidance for international companies facing similar challenges and underscores the continuing evolution of trademark enforcement in China.
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