(By Luo Yanjie) Abstract: “Agent” in conduct of Agent’s preemptive registration refers to “trademark agents, representatives or other agents and representatives based on sales and agency relationship such as distribution and agency”. Commodities that no agent or representative may apply for registration include commodities same as the commodities where the trademarks of the principals or the persons represented are attached to as well as other similar commodities. Considering trademark is a private right, judicial institutions shall fully respect parties’ autonomy.
A trademark which agents applied for registration may be canceled by one who should has owned such a trademark in accordance with the Trademark Law. In today’s post, we will introduce such a typical case for the following. Also note that, when the involved parties reached an agreement about the trademark squatting in litigation, the court refused to cancel agent’s registration.
Introduction to the Case:
Applicant for Re-trial: Aaron Shum Jewelry
Respondent: the Trademark Review and Adjudication Board (the “TRAB”)
The Third Party: Beijing Daimengde Gupohang Diamond (the “Daigu Diamond”)
Court of First Instance: Beijing No.1 Intermediate People’s Court No.: （2011）一中知行初字第2135号
Court of Second Instance: Beijing Higher People’s Court No.: （2012）高行终字第23号
Court of Retrial: the Supreme People’s Court No.: （2013）知行字第20号
Aaron Shum Jewelry has been using “古柏行” (pronouncing “Gupohang”) trademark on its jewelry since its establishment in 1985 and authorized Daigu Diamond to be acted a brand licensing agent. Daigu Diamond applied, without authorization, for registering “古珀行” trademark numbered 3593392 (the “disputed trademark”) under Class 14 for rings and jewelries on June 16, 2003 and obtained approval of registration on January 14, 2005. After Aaron Shum Jewelry filed an application for canceling the disputed trademark with the TRAB in May 2009, the TRAB made a decision of canceling Daigu Diamond’s disputed trademark on the grounds that the registration of the disputed trademark constituted “agents’ preemptive registration” as regulated in Article 15 of the Trademark Law.
Dissatisfied with the decision, Daigu Diamond brought an administrative suit to the Beijing No.1 Intermediate People’s Court, resulting in the court of first instance affirmation on decision contained by the TRAB. Afterwards, Daigu Diamond appealed to the Beijing Higher People’s Court who finally repealed the judgment of the first instance court and the decision of the TRAB. Within an appeal of retrial by Aaron Shum Jewelry, the Supreme People’s Court held that:
1. Aaron Shum Jewelry has already signed related agreements with Daigu Diamond.
After discovered that Daigu Diamond registered the disputed trademark, Aaron Shum Jewelry negotiated with the other shareholder Beijing Daimengde Company and signed an agreement for the following: first, three parties agreed Daigu Diamond to continue using “古珀行” as its brand trademark and images; Second, under protecting the Daigu Diamond’s interests from being infringed, Aaron Shum Jewelry is entitled, if necessary, to transfer the disputed trademark of Daigu Diamond to its Shenzhen-based Wholly-owned subsidiary without payment. Furthermore, Aaron Shum Jewelry shall authorize Daigu Diamond to the brand operation of the franchise businesses without payment.
2. One cannot apply for adjudication on the disputed registered trademark on the grounds of the principle of Estoppel.
The Supreme People’s Court held that Aaron Shum Jewelry cannot, pursuant to the principle of Estoppel, apply for adjudication on the disputed registered trademark under the Article 15 to the TRAB, based on the determination that Aaron Shum Jewelry had already settled down related disputes over Daigu Diamond’s registration of the disputed trademark through negotiations with Beijing Daimengde Compan.y
I. Legal Scope of Agent’s Preemptive Registration
Article 15 of the Trademark Law stipulates that “where an agent or representative, without the authorization of the principal, seeks to register in the agent’s name the principal’s trademark and where the principal objects, registration shall be refused and the use of the mark shall be prohibited.” This is a provision for the prohibition of agent’s preemptive registration. Based on it, there is no scope for agent’s preemptive registration.
Then, the Supreme People’s Court published the Opinions Concerning Trial of Administrative Cases in Respect of Trademark Right Granting and Confirmation stipulating that “agent” refers to trademark agents, representatives or other agents and representatives based on sales and agency relationship such as distribution and agency and commodities that no agent or representative may apply for registration include commodities same as the commodities where the trademarks of the principals or the persons represented are attached to as well as other similar commodities. From this, the act of Daigu Diamond’s preemptive registration is certainly fallen into this provision.
II. Prohibition of the Principle of Estoppel embodies the attribute of private rights for trademark.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPs”) demonstrates apparently that all members recognized the intellectual property rights as private rights. Furthermore, trademark rights may be proved its nature through the cultivation and care of market economy, which may endow some public attribute, such as governments’ authorization that make trademark be a legal right and the Trademark Office may revoke the registered trademark.
Within the deepening of China’s consumers’ understanding on trademarks, current laws and judicial practice seem to an increasingly support markets and right holders itself to execute trademark right. For example, first, only any interested parties may file an opposition or adjudication over the disputed trademark through relative reasons. Second, the Trademark Office adopted a policy of “no trial without claim”. Third, administrative organizations generally decided not to punish post-approved infringement (Laws stipulates a lighter or mitigated punishment).
The result of this case also proves trademark rights to own private attribute. As for the dispute which involved parties reached an agreement, even though a party actually preemptive registered the disputed trademark, courts will no longer make a judgment but the involved parties will deal with the dispute through their negotiation.