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How to Protect unregistered trademark which is squatted in China

Author: Erex Chen


In our experience in dealing with trademark disputes, we have seen frequent occurrence of trademarks squatted by business partners, competitors and even employees due to the delay in filing the same for registration by the clients. After this situation happens, the clients will be eager to know if there is any chance to get back the trademark and in case of legal action, what will be chance for success.

The protection for unregistered trademark with prior use under China Trademark Law is reflected as below:

-Article 13 of the Trademark Law is for protection of well-known trademarks which has not been registered in China. However, since the condition for being a well-known trademark is quite strict and in most cases, to challenge a prior registered trademark on the basis of being an unregistered but well-known trademark does not occur frequently.

-According to Article 32 of the Trademark Law: an application for the registration of a trademark shall not create any prejudice to the prior right of another person, nor unfair means be used to pre-emptively register the trademark of some influence another person has used. This regulation allows for opposition or cancellation for trademark being squatted in one of the following situations: (a) an opposition or cancellation can be filed by a party if he enjoys prior right to the trademark which is squatted. The prior right refer to any legitimate right including the right of portraiture, name, copyright, patent, business name etc. (b) an opposition or cancellation can be filed if the trademark is pre-emptively registered by unfair means while the trademark has been used before being squatted and with some influence.

We hereby will illustrate how to understand and use the above regulation of “using improper means to pre-emptively register the trademark that is already in use and enjoys certain influence” as the reason for opposition or cancellation in China. According to this regulation, the following conditions shall be met:

-The trademark is pre-emptively registered by a squatter through improper means;

-The trademark has already been used by another party;

-The trademark used by another party enjoys certain influence.

I. Definition of improper means

The Trademark Law does not further define what “improper means” shall refer to. As China’s Trademark Law applies the principle of Earlier Application, Earlier Being Granted, the registration of trademark by the squatter itself does not indicate such registration is with improper means or not. Therefore, when we understand this condition, the intention of the squatter shall be analyzed.

In other words, if the squatter registers the trademark when he is aware or should be aware that the trademark has been already used by another party and enjoys certain influence, then it can be presumed that the squatter takes improper means.

Evidences as suggested below can be collected by the applicant for opposition or cancellation in order to prove the existence of improper means by the squatter:

-Business relationship or similar relationship exists between the squatter and the applicant in the past or currently, and the squatter is aware of the trademark used by the applicant;

-In the event no direct business relationship exists between the squatter and the applicant, the applicant shall prove the scope, time duration, frequency etc in relation to the use of unregistered trademark to prove the squatter knows or should know the fact of the use of unregistered trademark by the applicant. However, the specific evidences shall be subject to the examination by TRAB (the Trademark Review and Adjudication Board) or the court.

II. The trademark has been used by the applicant

The applicant shall submit evidences in relation to the use of the unregistered trademark. In this regard, the followings shall be noted:

-As for the use of the unregistered trademark, it can be the use on commodities, commodity packaging, transaction documents, advertising, exhibition, etc.

-It shall be noted that if the applicant is a foreign client, the evidences in relation to the use of trademark shall be mainly those indicating the use of the unregistered trademark in China;

-Trademark license shall not constitute the use of trademark.

III. The trademark used by the applicant enjoys certain influence

The influence of the trademark refers to the market awareness of the trademark. In this regard, the applicant can prove from the following aspects:

-The time duration in relation to the use of the trademark;

-The scope of area the trademark is used;

-Sales volume of the relevant commodities in relation to the trademark;

-The advertising of the trademark as well as the expenditure in relation to the advertising for the trademark;

-The reputation received such as the recognition of famous trademark by local authority.

IV. Suggestions

In conclusion, in dealing with the cases of trademark squatting, the key point for success lies in the proving of the use of unregistered trademark and the influence enjoyed by the unregistered trademark. The applicant shall collect evidences as much as possible to prove the use of the trademark and its market influence and shall not only reply on single evidence which the applicant may think important. This is because in those cases, TRAB and the court may still have substantial discretion power in examining and accepting the evidences. If the applicant wants to have a good result, he shall pay attention to both of the quantity and the quality of the evidences.

This article is published solely for the interest of friends and clients and should not be relied upon as the legal advice of any kind from us. Should you have any questions about this article, please contact the partner of Mylink Law Office.

Contact Person:

Erex Chen, Managing Partner