The trademark application in China follows the principle of “Earlier Application, Earlier Being Granted”. In reality, due to the weak awareness for IP protection, many companies including foreign companies have frequently found their business marks squatted in China. Once the business mark is squatted, the party suffered will have to spend long time and high cost to take legal action.
A. Article 7 (Trademark Law)
Under the Chinese trademark law each application and use of trademark shall follow the principle of “Good Faith”.
In consideration of the fact that a lot of business marks are used without being registered, to avoid the impact brought to an innocent user due to malicious registration by others, the Trademark Law specifies that if a trademark has been already used by one party on goods/service on the same or similar class prior to the registration of the trademark by others, such party is allowed to continue using the trademark within the original scope. However, a special mark shall be added to avoid confusion upon request by the trademark applicant. Such rules, to some extent, allow the legal use of the squatted trademark by the innocent party.
Obviously such protection is not perfect to the party whose business mark is squatted. The protection for unregistered trademark with prior use under China Trademark Law is reflected as below:
B. Article 13 (PRC 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.
C. Article 32 (PRC 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:
- 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
- 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 and business name
D. The following conditions shall be met:
- the trademark has already been used by another party
- the trademark is pre-emptively registered by a squatter through improper means
- the trademark used by another party enjoys certain influence
I. Trademark has been used
The applicant shall submit evidences in relation to the use of the unregistered trademark.
- As for the use of the unregistered trademark, it can be the use on commodities, commodity packaging, transaction documents, advertising and exhibition
- Trademark license shall not constitute the use of trademark
- If the applicant is a foreign company, the evidences in relation to the use of trademark shall be mainly those indicating the use of the unregistered trademark in China
II. Improper
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
- If no direct business relationship exists between the squatter and the applicant, the applicant shall prove the scope, time duration and frequency 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.
III. The trademark 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:
- Time duration in relation to the use of the trademark
- Reputation received such as the recognition of famous trademark by local authority
- Scope of area the trademark has been used
- Advertising of the trademark as well as the expenditure in relation to the advertising for the trademark
- Sales volume of the relevant commodities in relation to the trademark
E. Result
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. If the applicant wants to have a good result, he shall pay attention to both of the quantity and the quality of the evidences.
Starke is a Trademark Agent licensed by the State Administration for Industry and Commerce (SAIC) of the P.R.C. With several years of experience we assist you, to register your trademarks in China successful.