How to Judge the Validity of Trademark Transfer without Inner Approval of the Company in China

(By Albert Chen) Abstract:

When a company’s trademark agent transfers a trademark without approval, a judgement of the validity of said transfer requires not only a consideration of the company approval, but also a determination of the third party good faith in the transfer. When a condition is not fulfilled the transfer will invariably be considered invalid.

Case Introduction:

In 2001, Leidi (China) Co., Ltd. (“Company L”) was granted the exclusive right in the use of the trademark “雷迪” (read as “Leidi” in Chinese). In November of 2002, Wu, as the executive director of Leidi China, transferred the trademark to the Hua Qu Duo Investment Company (“Company H”). The State Trademark Office made an announcement regarding the transfer in October 2003. Subsequently, Company H licensed the trademark to the Shanghai-based Leidi Mechanics Co., Ltd. (“Company S,” which had no affiliation with Company L).

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Why Did the Supreme People’s Court Changed Its Attitude towards Revoking Trademarks When It Is Unused for 3 Years

(By You Yunting) China is a heavily administrated and controlled country. If administrative approval is not obtained, business activity such as producing and selling of Alcoholic beverages, medicine, etc.,  could be ruled to be invalid by the court. According to the Trademark Law of China, once the trademark has not been used for three continuous years, it could be eliminated. There is a significant amount of people who uses their right to their trademark however, many people fail to obtain the proper administrative approval or violates administrative rules. This brings us to the issue of  whether or not such a trademark should be removed even though it has been used. For this kind of cases, we find an example in the 10 annual cases of 2011 promulgated by the Supreme People’s Court of China. In that case, the Supreme Court overturned its opinions expressed in the previous year, “Kangwang Trademark Dispute”, in which the court determined that despite a shortage of administrative approval, the using of the trademark is sufficient according to the Trademark Law. 

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Why Did the Court Verify the Validity of a Company’s Trademark Transfer 5 Years after Its Cancellation?

(By You Yunting) The Luzhou Qian Nian Liquor Co., Ltd. (“Company L”) found that its competitor, the Shandong-based Zhu Ge Jia Liquor Co., Ltd. (“Company S”) acquired three trademarks from a company that had its registration for the marks cancelled five years prior to the trademark transfer. Following this, Company L filed a request to have the trademark revoked, because it had not been used for a continuous three-year period. However, the Trademark Office denied the application, and Company L requested a review of the decision, which was also rejected, leading Company L to ultimately file an administrative lawsuit. In the lawsuit, Company L was equally unsuccessful, and the court refused its demands in both the first and second instance. Following a series of rejections, Company L then appealed the case to the Supreme People’s Court (“Supreme Court”) for a rehearing. 

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How to Judge the Validity of Trademark Transfer without Inner Approval of the Company in China

Abstract:

(By Albert Chen) When a company’s trademark agent transfers a trademark without approval, a judgment of the validity of said transfer requires not only a consideration of the presence (or lack of) company approval, but also a determination of whether there was good faith when considering the third party in the transfer. When it can be shown that no inner-company approval was made, and that the transaction was not undertaken in good faith, such a transfer will invariably be considered invalid.

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Introduction to A Case on Whether OEM Would Constitute Infringement in China

Abstract:

(By Luo Yanjie) For the infringement caused by OEM in China, different courts hold different opinions in China, and in this essay you could see a case describe the infringement determination. The determination of trademark infringement should be subjected to whether or not potential consumers would be confused when making their decision to purchase the product. If the potential consumer is not confused by the product, then it should not be considered as an infringement.

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