Our China Trademark Opposition and Invalidation Victories
Our law firm just got some good news in the form of several favorable decisions on China trademark opposition and invalidation proceedings. This in itself was good news, but we were also pleased to see China’s Trademark Office (TMO) and Trademark Review and Adjudication Board (TRAB) give critical weight in all of the proceedings to the bad faith exhibited by the adversary, be it someone trying to register our client’s trademark, or someone who already had.
Bad Faith in China Trademark Disputes
As readers of this blog well know, bad-faith trademark applications are a widespread, persistent problem in China, and it is therefore encouraging to see the TMO and TRAB honing on the bad-faith character of these applications.
The Fight Against China Trademark Squatting
Most of the favorable opposition and invalidation decisions hinged on Article 32 of the Trademark Law, which, among other things, provides that one may not use “illegitimate means to rush to register a trademark that is already in use by another person and has certain influence.” However, it is far too commonplace for China trademark squatters and others acting in bad faith (for example, counterfeiters and ill-intentioned business partners) to rush to do just that. In the past, we have seen the TMO and TRAB taking an excessively strict view of what constitutes illegitimate means. This has meant that, in some cases, an invalidation or opposition request has been denied, even though the victim of the bad-faith registration or application had in fact used the trademark in China, and it was clear that the registrant or applicant was up to no good.
China’s Evolving Stance on “Illegitimate Means”
It seems the TMO and TRAB are adopting a more realistic approach to bad faith in the context of opposition and invalidation proceedings, and not giving the benefit of the doubt to parties that previously fiddled with other trademarks that legitimately belonged to someone else. They seem to be understanding that vast portfolios of squatted trademarks are built slowly, and such activity should be nipped on the bud.
Unfortunately, however, several of the decisions seemed to rest exclusively on the bad faith on the part of the adverse party. Basically, the rulings said that if not for the bad faith of the other party, the invalidation or opposition would have failed. This is troubling because, in these cases, our clients bringing the actions are important marketplace actors. Their trademarks have been used in China and under any reasonable standard do in fact have “certain influence” in China. Though in these cases the bad faith of the other party saved the day, it is still concerning that an unduly strict standard continues to be applied when it comes to establishing prior use and “certain influence” in China.
This situation reminds me of the puzzlingly high threshold that was applied a few years ago when deciding if a trademark was “well-known” per China’s Trademark Law. In one case, China’s Trademark Review Board found that our client’s trademark was not “well-known”, even though this client is one of England’s Big Six soccer teams. All it would have taken for the adjudicator to realize that the trademark was recognizable to millions of Chinese was to ask colleagues. But instead, it seemed that the adjudicator’s perspective was confined to their cubicle, disconnected from real-world recognition. This same lack of perspective seems to influence evaluations of influence and prior use.
Conclusion
Though some troubling trends remain in terms of China trademark protections, the recent decisions emphasizing bad faith are an encouraging development for trademark owners facing infringement in China. As we move into 2024, these cases demonstrate progress in recognizing illegitimate Chinese trademark registrations and protecting brands from squatters. But there is still room for improvement, particularly in evaluating influence and prior use in China.
Still, we will take these victories, and we will focus on the good. Again, it is encouraging to see the TMO and TRAB taking a harder line on bad-faith applicants and registrants and we can hope that these Chinese trademark agencies will continue to move in the direction of protecting legitimate trademark owners.
