(By You Yunting) Recently, a news article sparked concern that the Qihu Investment Co., Ltd (a similar Chinese name to Qihoo 360 Technology Co., Ltd) had rushed-registered hundreds of trademarks belonging to internet venture companies. Even though Qihoo 360 Technology Co., Ltd later clarified that it had nothing with the Qihu Investment Co., Ltd, the news still attracted attention from both companies and lawyers.
Many famous companies’ brands, such as Ubuntu, Hotel Tonight and SoundCloud were being rush-registered as trademarks and some have even entered into the process of announcement by the Chinese Trademark Office after a preliminary examination and within three months of the date of the publication. The overseas companies may lose the exclusive right of trademark in China unless they file an opposition against these rush-registrations. Worse, they will not be able to use these brands they have created when entering the Chinese market for a significant length of time. In today’s post, we would like to address how venture companies should resolve trademark squatting.
- The general trademark squatting situation
After much research on the Trademark Office website, we have concluded that trademark squatting is usually concerned with some influential overseas companies in the Internet industry. Early in the period between 2012 and 2013, these rush-registered registrants had applied for these trademarks under class 9 for computer hardware and also under class 38 for instant messaging systems. However, only a few applications were approved for preliminary examination and entered into the announcement phase of the Trademark Office, whilst the majority of applications were refused entry into the announcement phase of the Trademark Office.The following are our research on the rush-registered trademarks about overseas companies:
|No.||Application Number||Class||Trademark||Applicant||Application Date||Publication Date|
|1||11900258||9||SPORTICA||Qihu Investment Co. Ltd.||2012/12/17||2014-2-27|
|2||11938732||9||WHIPTAIL||Qihu Investment Co. Ltd.||2012/12/24||2014-03-03|
|3||12031535||9||BLUESTACKS||Qihu Investment Co. Ltd.||2013/1/11||2014-03-27|
|4||12031546||9||LEAP MOTION||Qihu Investment Co. Ltd.||2013/1/11||2014-03-27|
|5||12051304||9||AFTERSHOKZ||Qihu Investment Co. Ltd.||2013/1/15||Currently Unpublished ※|
|6||12351473||9||PUZZLE DRAGONS||Qihu Investment Co. Ltd.||2013/3/29||Currently Unpublished ※|
|7||12410872||9||SAILFISH||Qihu Investment Co. Ltd.||2013/4/11||Currently Unpublished ※|
|8||12457508||9||UBUNTU||Qihu Investment Co. Ltd.||2013/4/19||Currently Unpublished ※|
|9||12531914||9||TRAVEL ZOO||Qihu Investment Co. Ltd.||2013/5/6||Currently Unpublished ※|
|10||12742690||9||TWILIO||Qihu Investment Co. Ltd.||2013/6/13||Currently Unpublished ※|
|11||12819062||9||SOUNDCLOUD||Qihu Investment Co. Ltd.||2013/6/26||Currently Unpublished ※|
|12||12851141||9||DELIVERY HERO||Qihu Investment Co. Ltd.||2013/7/2||Currently Unpublished ※|
|13||12938128||9||HOTELTONIGHT HOTELCLUB||Qihu Investment Co. Ltd.||2013/7/18||Currently Unpublished ※|
|14||13224474||38||HOTELTONIGHT HOTELCLUB||Qihu Investment Co. Ltd.||2013/9/11||Currently Unpublished ※|
|15||12956730||9||WUNDERLIST||Qihu Investment Co. Ltd.||2013/7/22||Currently Unpublished ※|
|16||12956839||9||TRUSTLOOK||Qihu Investment Co. Ltd.||2013/7/22||Currently Unpublished ※|
|17||13092849||9||FLEKSY||Qihu Investment Co. Ltd.||2013/8/16||Currently Unpublished ※|
|18||13214646||9||SWIFTKEY||Qihu Investment Co. Ltd.||2013/9/9||Currently Unpublished ※|
|19||13241595||9||DRYFT||Qihu Investment Co. Ltd.||2013/9/13||Currently Unpublished ※|
|20||13271844||9||CYANOGENMOD||Qihu Investment Co. Ltd.||2013/9/22||Currently Unpublished ※|
|21||13328384||9||SKYSCANNER||Qihu Investment Co. Ltd.||2013/10/9||Currently Unpublished ※|
|22||13499820||9||BITSTRIPS||Qihu Investment Co. Ltd.||2013/11/7||Currently Unpublished ※|
※ NOTE: Generally, the Trademark Office may make the preliminary examination and announce its publication within the period of 8 to 14 months after its application date.
- Legal consequences of trademark squatting
Our Trademark Law implements the first-to-file principle. When making a preliminary examination, the Trademark Office generally prefers reviewing whether or not a prior application other than the one examined exists, all without taking into account whether these trademarks are being rush-registered. Therefore, the probability of rush-registration cannot be considered low. If the trademarks of overseas companies succeed in rush-registration, one consequence of this is that the overseas companies will be deprived of the exclusive rights of their trademarks for their products and services, and may expose themselves to legal risks and administrative obstacles when using their trademarks in China. The registrants may claim any rights over their trademarks, with the result of discontinued use of these trademarks by the overseas companies having their trademarks infringement. Even if the overseas companies have not entered into the Chinese market, they will also encounter some trademarks problems similar with what TESLA MOTORS faced in China.
The trademark was rush-registered under Class 9 for computer hardware, which is of great importance for internet companies. In addition to traditional software, Class 9 for computer hardware is similar to the applications classification used for smart phone and tablet computers. Even though there is no final conclusion about what class mobile applications fall within, Class 9 would be the very close to mobile applications. However, if the overseas companies do not file a civil litigation, there is the possibility that the rush-registered registrants may complain to the Chinese administration for industry and commerce, as well as the mobile application markets on the grounds of trademark infringement.
I once encountered with an extreme case of trademark infringement in a dispute concerning 115 Storage, where 115 Technology Co., Ltd holds the exclusive right of “115” trademark under Class 42. The cause was that the exclusive right holder of “115” trademark under Class 9 continuously complained to different application markets against the exclusive right holder of “115” trademark under Class 42, with the result that many application markets did not list the 115 storage apps for download for a long time. With our assistance and after much discussion with different application markets, Apple Inc.’s App Store and other Android application markets restored the 115 Storage apps. However, this still caused substantial damages to 115.
- Recommended solutions
There are three solutions to deal with trademark squatting in the following, some of which are palliatives while others address the fundamental problems, not the symptoms.
1) Firstly, oppositions can be filed for those unapproved rush-registrations.
Despite the fact that some marks have been rush-registered, the overseas companies may still file an opposition against the pending application to protect their rights. According to our Trademark Law, it is the Trademark Office that shall make the preliminary examination, approve an application to register a trademark and announce it. After the Trademark Office has approved the application, any person may file an objection to a trademark application that has been published after a preliminary examination and approved within three months of the date of publication. As such, the overseas companies may file an opposition against the rush-registered trademarks in this period.
A company in such a situation must apply for a trademark in the name of its company during the period of opposition. If the opposition proceedings are successful in cancelling the rush-registered trademarks, the overseas companies can apply for trademarks to protect their rights and interests with immediate effect.
2) Secondly, a cancellation procedure could be filed for these being approved trademarks.
If the rush-registered trademarks are approved by the Trademark Office, the overseas companies may use Article 41 of the Trademark Law to revoke rush-registered trademarks with the Trademark Review and Adjudication Board. The Trademark Law stipulates that the owner of a trademark or any interested party may, within five years from the date of registration, request the Trademark Review and Adjudication Board to make a ruling for cancellation of the registration.If the trademark was registered for more than 5 years, the owner of a trademark may not revoke the rush-registered trademark. In the event that the interested parties are dissatisfied with the ruling of the Trademark Review and Adjudication Board, they may initiate legal proceedings in the Beijing No.1 Intermediate People’s Court.
As such, the overseas companies are advised to apply for a trademark registration, so that the overseas companies may receive their exclusive right of the trademark immediately.
3) Thirdly, trademark protection must be improved to protect valuable trademarks.
Overseas companies usually apply for trademarks for their products and services at the very inception of their career. Many times overseascompanies make no applications for their products and services by virtue of fund constraints, which is a significant risk for the long-term development of the company. Within the highly competitive internet industry, if a competitor rush-registers their trademarks and makes continual copyright complaints, it will be devastating for the overseas companies. Another common situation occurs where the registration is inadequate for trademark protection due to the fact that the trademark application was not filed under the most relevant class. For example, an educational mobile app might decide to register its mark under Class 41 for education, rather than under Class 9 for computer hardware, leaving serious hazards that can give rise to future legal risk.
In addition to the dominant classification, companies should apply for trademark registration under all relevant classifications in order to strengthen their trademark protection against cross-class litigation. In the WeChat Trademark and Tencent’s Problem in Trademark Management article, we stated that “the question is, all the products have their own process of development, some originally bland products could be the “star” product someday in the future. By then, the question of whether the trademark and other IPR protection measures of the company can keep pace with this development is essential to the company, otherwise problems could be foreseen.”If a company as large as Tencent has such a problem, then the same statement rings true for other overseas companies. Due to the fact that there are substantial fund constraints preventing the application for trademarks under many different classifications immediately, if overseas companies have strengthened considerably, trademark protection must be improved in a timely manner.
As for how to apply for the completion of trademarks, in our Uber’s China Imitator Didi Taxi Meets Trademark Problems article, we once suggested that “Many mobile apps always provide O2O goods and services with various trademarks under many different classifications. As such, when an app applies for a trademark classification…. the enterprise should apply for trademarks under different classifications in accordance with its goods or services provided. ”
At the end, we listed all rush-registered trademarks that Qihu Investment Co., Ltd have applied for as a reference. As a trademark lawyer in China, we can provide trademark agency services for overseas companies whose trademarks have been rush-registered. We can assist our clients in filing an opposition against rush-registration with the Trademark Office. Please contact us by using your method of choice below:
You Yunting: Partner and IPR Lawyer of Shanghai DeBund Law Offices.
We have long been concerned about trademark squatting of overseas companies. Following are the related posts about trademark squatting in recent two months. More posts please click our “Trademark” section.