Analysis on New Provision of Agent’s Trademark Rush-Registration in China Trademark Law

(By Luo Yanjie) According to the latest news report, more than 14 millions of trademark applications in China have already been filed by June 2014. It indicates that Chinese economy develops very fast and also that brands across China and even all over the world, big or small, are attempting to the protection of trademark registration in China. However, there is no doubt that some trademarks were registered with bad faith at the beginning, i.e., pirate trademark rush-registrations. Among those trademark rush-registrations, some of rush-registrars are connected to the original holders, thus leading to prevention from agent’s trademark rush-registration as regulated in Article 15 of the Trademark Law (2001 version). Furthermore, in the newly applicable Trademark Law from May 2014, legislature departments made implementation on the Article 15. In today’s post, we will discuss the modification and its application.

1.   Modification of Article 15 in the 2013 Trademark Law

The 2001 version of Trademark Law stipulates that, in the event that an agent or representative seeks to register the client’s trademark in their own name without the authorization of the client and faces objection from the client, such trademark shall not be registered and prohibited from being used. Based on this stipulation, the 2013 Trademark Law implemented the provision that, where a trademark used on an identical or similar product that is considered for registration and that is the same or similar to a prior user of an unregistered trademark, the registrant, where no prior contractual agreement or business relationship exists between the registrant and prior user, may not register its trademark where the prior user’s mark is clearly in use and an opposition to the trademark’s registration has been filed. Such modification is aimed at the following purposes:

(i)   “Contractual relationship” is enacted to the law level at the extension for its protection scope.

Pursuant to the Opinions of the Supreme People’s Court Concerning Trial of Administrative Cases in Respect of Trademark Right Granting and Confirmation, the Supreme People’s Court has already extended the “agent”, stipulating that if the trademark of the principal or of the one represented, without authorization, is registered in the name of trademark agents, representatives or other agents and representatives based on sales and agency relationship such as distribution and agency, the people’s court shall deem it to be the preemptive registration of trademark of the principal or of the one represented by the agents or representatives. The promulgation of the 2013 Trademark Law promotes the original judicial interpretation to the law level, and at the same time extends the protection scope, which regulates a general “contractual agreement and business relationship”, more than “marketing agency”.

(ii)  A catch-all clause is added to the provision of “other relationship”.

In practice, many rush-registrars often do not have any direct “contractual agreement or business relationship” with the original holders, which leads to the difficulty of presenting evidence. Therefore, the catch-all clause is useful for the original holders to protect their interests and rights under the condition of no direct evidences. With regard to “other relationship”, we will introduce it later in detail.

2.   Protection scope of Article 15 and the difference from Article 32 in the 2013 Trademark Law.

Modification in Article 15 improves the protection of the trademark holder objectively. However, several characters do not commit clear judging standards.

(i) Does clearly know include should know?

With regard to the newly rush-registrars over “contractual agreement, business relationship and other relationship”, the 2013 Trademark Law has already set up a premise that the rush-registrars clearly know the existence of the involved trademark. Such premise is not shown in the judicial interpretation. With the fact that the judicial interpretation of the 2001 Trademark Law restricted the relationship into marketing agency, a marketing agency should know the involved trademark apparently.

The 2013 Trademark Law has already improved the scope of rush-registrars to a general “contractual relationship”. In practice, not all contracts are regarded as the involved trademark, so that the 2013 Trademark Law set up such premise for “should know”. However, the 2013 Trademark Law is uncertain about whether “clearly know” includes “should know”. Because in the event that the trademark holder could not prove whether the rush-registrar keep in touch with the trademark involved but could use other evidences and common sense to prove that the rush-registrar should know the trademark involved, the trademark holder can also be under the protection scope. However, it remains to be confirmed by the Supreme People’s Court.

(2) How to understand “other relationship” and the difference between Article 15 and Article 32?

As mentioned, Article 15 of the 2013 Trademark Law regulates a catch-all clause in preventing from trademark rush-registration, but is uncertain about “other relationship”. Does a competitive relationship in the same field or the same area belong to “other relationship”?

In my view, the afore-mentioned caused from objective factors (such as in the same field or area) shall belong to the other relationship” as regulated in Article 15 of the 2013 Trademark Law. Because from the legislative intention, Article 15 is to prevent whoever keep touch with the trademark involved from rush-registration dependent on the initial and artificial touch such as “contractual agreement or agent”. If so, the rush-registrar is aimed to the trademark squatting with bad faith. Therefore, the application of Article 15 does not need to take brands popularity into consideration.

However, if “operating in the same field and area” are included in the “other relationship”, it is no doubt to increase the protection scope of Article 15, thus hollowing out the Article 32 stipulating that “nor shall an applicant rush to register in an unfair manner a mark that is already in use by another party and enjoys substantial influence”. The bigger difference between Article 15 and Article 32 is that brands popularity shall be taken into account in applying Article 32.

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