CTMO applies Article 15.2 of new Trademark Law in opposition filed before law entered into force

China

The China Trademark Office (CTMO) has upheld an opposition against a trademark application filed by a company affiliated with the distributor of the opponent, citing Article 15.2 of the new Trademark Law.

Article 15.2 of the new Trademark Law provides as follows:

Where a trademark applied for registration is identical with, or similar to, another person’s prior used but unregistered trademark, in respect of the same or similar goods, and the applicant has contractual or business contacts, or relations other than those described by the preceding paragraph, with the prior trademark user so that the applicant definitely knows the existence of that person’s trademark, if that person files an opposition, the applied-for trademark shall not be registered.

Article 1.1 of the Circular of the State Administration for Industry and Commerce (SAIC) on Matters Concerning the Application of the Amended Trademark Law of the People’s Republic of China”, which deals with the application of the new law to pending cases, provides as follows:

The new Trademark Law applies to any administrative decision made by the... CTMO after May 1 2014 (inclusive [...]) regarding applications for trademark registration, applications for oppositions, applications for alterations of a trademark, applications for assignment of a trademark, applications for renewal of a trademark registration, applications for revocation of a trademark, applications for cancellation of a trademark, applications for recordal of a trademark licence etc filed with the CTMO before May 1 2014. The former Trademark Law applies when the CTMO reviews the qualification and opposition grounds of the opponent in the trademark opposition procedure.

The term 'opposition grounds' used in the last sentence is problematic. It does not correspond to the wording used in Article 2.2 of the circular concerning cases adjudicated by the Trademark Review and Adjudication Board (TRAB), where a distinction is made between the "subject qualification of the interested party in the opposition procedure" (which is governed by the former law), and "other procedural matters and substantial matters" (which are subject to the new law).

The present case clarifies this ambiguity and, in addition, provides an interesting view on what sort of evidence is necessary when an opposition is based on Article 15 of the law.

On November 28 2011 a Guangzhou wine company filed a trademark application for 泰牛酒堡 CHATEAU DU TRIGNON (ie, CHATEAU DU TRIGNON and its Chinese transliteration) for “arak; distilled beverages; wine; spirits; brandy; whisky; alcoholic extracts; alcoholic beverages (except beer); light sparkling wine; yellow rice or millet wine” in Class 33. The CTMO preliminarily approved this trademark application on October 27 2012.

The opponent filed an opposition on June 25 2013. The main grounds of the opposition were as follows:

  1. The applicant was affiliated to a food company in Guangzhou, which was the distributor of the opponent. The registration of the opposed trademark would violate the provisions of Article 15 of the old Trademark Law (2001 version).
  2. The applicant had pre-emptively filed the opponent’s trademark, which has been previously used by the opponent and had a certain influence in China. The opposed trademark should not be approved for registration according to Article 31 of the old Trademark Law.
  3. The registration of the opposed trademark might have a detrimental social influence, and registration of the opposed trademark should not be approved in accordance with Article 10.1.8 of the old Trademark Law.

The opposition was based on the old Trademark Law since, at the time of the opposition, the new law had not yet been promulgated.

The evidence submitted by the opponent included the following:

  1. the business licences of the wine company and the food company in Guangzhou;
  2. basic information on the wine company and the food company published on the website of the Guangzhou Administration for Industry and Commerce;
  3. a business card of the legal representative of the wine company;
  4. the power of attorney issued by the opponent to the food company in Guangzhou and the international sales contracts signed between the opponent and the food company;
  5. an overseas remittance application form filed by the food company in Guangzhou to settle payments to the opponent;
  6. an account receivable of the opponent from the food company verified by an accounting firm and the accounting firm’s affidavits;
  7. email correspondence between the employee of the opponent and the legal representative of the applicant; and
  8. evidence of sales and brochures of the opponent’s products in China.

The applicant did not file any response within the prescribed time limit.

On March 25 2015 the CTMO ruled that the evidence adduced by the opponent proved that:

  • the applicant and the opponent had a cooperative relationship;
  • the applicant was aware of the opponent and of its trademark before the filing of the opposed trademark; and
  • the applicant did not deny this fact.

The CTMO ruled that the opposed trademark should not be approved for registration, and based its decision on Article 15.2 of the new Trademark Law, which describes the circumstances of bad faith much more precisely than the former Article 15 (Article 15 of the former law stated: "Where the agent or representative of the owner of a trademark applies to register the trademark in its own name without authorisation and the owner of the trademark files an opposition against the same, such a trademark shall not be allowed for registration and shall be forbidden from practical use.").

It is interesting to note that the CTMO applied the new law even though the opposition, filed in 2013, referred to the former version of Article 15. By doing so, the CTMO indirectly clarified the apparent contradiction between the terms used in the SAIC circular ("opposition grounds" for the CTMO and "other procedural and substantive matters" for the TRAB). It is now clear that, when issuing a decision in oppositions filed before the entry into force of the new Trademark Law, the Trademark Office and the TRAB should follow the same principles: the former law governs the right to oppose (qualification), while the new law governs the substantial grounds on which the opposition is based.

In this case, the opposition aimed to prove the bad faith of the applicant. At the time, it was necessary to cite the old Article 15 (which only refers to the "agent" relationship) and its subsequent interpretation by the Supreme People's Court (which extended the "agent" concept to the "distributor"). The opponent further extended this concept to include any person who is affiliated to the distributor. The main point was to prove that the applicant, because of this chain of contractual relationships, was fully aware of the existence of the opponent and its trademark, and had filed the application in bad faith.

The CTMO, by referring to the new law and paying due attention to all the evidence proving the existence of this "chain of contractual relationships", made a decision which could serve as a precedent in future similar cases.

Huang Jingke and Lei Yongjian, Wan Hui Da Law Firm & Intellectual Property Agency, Beijing

Wan Hui Da represented the opponent in this case

Get unlimited access to all WTR content