We are frequently asked by foreign companies that "what to do" when they encountered the issue of their marks being preemptively registered in China by third parties. This has become a common situation that foreign companies often face when they begin the process of filing their trademarks in China. As a result, foreign companies encounter difficulties in registering their trademarks and may even be unable to launch the business in China. Protecting their trademark rights has therefore become a crucial issue that needs to be urgently addressed. In this article, the writer will focus on discussing "what actions the company can take to resolve these problems."
Backgrounds
Given the surge in trademark filings in China, the CNIPA has realized the severe situation of the malicious trademark registration has damaged the true trademark owners' rights and the establishment of a fair business environment. As a result, the new Trademark Law has been implemented on November 1, 2019 which has amended some articles to attack the malicious trademarks. Additionally, the CNIPA also strike out harder against the malicious trademark registration. These actions signify a shift towards prioritizing the protection of true trademark owners' rights. Consequently, it has become relatively easier to protect true trademark owners' rights in China from legal grounds and practices.
What you can do
The true trademark owner can protect their own trademark rights and interests from the following aspects:
1. Taking aggressive ways to attack the malicious trademark before the CNIPA
The true trademark owner can take opposition, invalidation and non-use cancellation action against the malicious trademark. The actions that can be taken depend on the current status of the malicious trademark.
Ø Opposition: when a trademark has not been registered but is in opposition period.
The true trademark owner does not have prior trademark rights in China, thus, in the opposition action, we can mainly rely on Article 32 of China Trademark Law, that is, the malicious applicant rushed to register the true trademark owner's trademark in bad-faith which had earlier used and acquired a certain reputation over similar goods in China before the malicious trademark's filing date. The chance of success in the opposition action will depend on the evidence the true trademark owner can provide.
Ø Invalidation: when a trademark is officially registered.
Same as the opposition, the chance of success in the invalidation will depend on the evidence the true trademark owner can provide.
Ø Non-use cancellation action: when a trademark is officially registered for more than three years.
The burden of proof falls on the malicious applicant, making it an effective and relatively straightforward way to attack malicious trademark.
The writer wants to point out that it is advisable to file an opposition and invalidation action against the malicious trademark if the true trademark owner can provide substantial evidence demonstrating prior use and a certain reputation in China. However, the main challenge lies in cases where the true trademark owner has not launched the business in China or has not effectively maintained the evidence or the use evidence is not substantively sufficient.
2. Taking peaceful way, namely negotiating a deal to transfer the malicious trademark
Many foreign companies are reluctant to purchase the malicious trademark, as they believe that the trademark belongs to them and it is absurd to pay for something that should be theirs already. However, it is often necessary to pay the money in order to resolve problems effectively if the malicious trademark has severe impacted on business activities in China.
For some malicious applicant (trademark squatters), they make a living by registering and selling trademarks. Thus, for some trademarks, it may be possible to acquire them by paying a reasonable fee, such as CNY 20,000. Therefore, we advise the company to take this option into consideration.
3. Filing the trademark in China as soon as possible
Once you are aware that your trademarks have been unlawfully registered by a malicious applicant, it is crucial to promptly file your trademark in China, not only within the same class as the malicious trademark, but also in other related classes. This broader scope of protection will help prevent any further malicious trademark registrations. In addition, it is understandable that some companies may hesitate to file in the same classes as the malicious trademark, fearing that their trademark will be rejected. However, it is important to file your trademark as soon as possible. It is worth noting that the malicious applicant will be aware of your actions and may attempt to re-file the same trademark. If they are successful in doing so, it could potentially bar your later filed trademarks.
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.
