Measures specifically aimed at bad faith trade mark applications

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The trade mark system in China

 Introduction

This chapter introduce the trade mark system in China. The chapter primarily presents the application system, which is highly important in understanding why bad faith trade mark applications are possible in the first place and demonstrates how the system benefit bad faith filers.

The Trademark Law of the PRC

Shortly after the inauguration of the PRC government in 1949, the first national system of trade mark registration was implemented in ‘the promulgation of the Provisional Regula-tions on Trademark Registration’. The system merely protected registered trade marks and the exclusive right to use them while unregistered trade marks enjoyed no protection.⁷⁹
In 1956, the socialist reform had reached its top and a system where all materials and in-dustrial products should be administrated in accordance with the national plan was intro-duced. This national plan also established that both domestic and international trade should prevail under the principle of centralism. As a result, a new trademark regulation was adopted which established that all goods appropriate for trade mark registration must be labelled with a trade mark. All trademarks were to be registered while unregistered trade-marks were prohibited from being used.⁸⁰
After the trade mark development had been halted by the Cultural Revolution in the 1960’s and 1970’s, the Chinese trade mark system developed quite rapidly. In 1983, the first intel-lectual property law of the PRC came into force, namely the Trademark Law of the PRC. By this time, China had joined several international conventions and organisations, includ-ing WIPO and the Paris Convention⁸¹, and in 1988 China started using the international classification of goods and services. As protection of trade marks constantly developed globally, China revised its Trademark Law twice in 1993 and then in 2001. Shortly after the last revision, China also adopted ‘The implementation Regulations of the Trademark Law However, this provision only provides protection against registration for identical or simi-lar goods, i.e. registration in the same class. Considering that China applies single class reg-istration and offers registration in sub-classes, this provision is quite easy to circumvent.84 Only proprietors of well-known trade marks enjoy cross-class protection meaning that no other party shall be allowed to register an identical or similar mark regardless in which class registration is sought.85

Unregistered trade marks

Trade marks in China are generally protected through registration. There are two types of unregistered trade marks in China – type A is a trade mark not registered whatsoever in China; and type B is a trade mark registered in certain classes and sub-classes in China but not in the classes concerned in the particular dispute.86
As will be further explained later on in this thesis87, there are some exceptions to the stand-ard of non-protection for unregistered trade marks. First of all, well-known trade marks are protected even without registration.88 Articles 13 and 31 of the Trademark Law also pro-vide protection to unregistered trade marks with a certain reputation from being preemp-tively registered.89 Furthermore, Article 15 of the Trademark Law stipulates that the owner of an unregistered trade mark may prevent its agent or representative from unauthorized usage or registration of its trade mark.

Well-known trade marks

As stated, China does have an obligation to protect well-known trade marks even if they have not been previously registered since this is a requirement in the Paris Convention which China is obliged to follow.90 This obligation has been implemented into Articles 13-14 of the Trademark Law. The burden of proof is placed upon the applicant who must prove that the trade mark is well-known by showing91:
•reputation of the mark to the relevant public;
•time for continued use of the mark;
•consecutive time, extent and geographical area of advertisement of the mark;
•records of protection of the mark as a well-known mark; and
•any other factors relevant to the reputation of the mark.
Furthermore, any records of the trade mark being protected as a well-known elsewhere, sales volume, profits and taxes, market share, the geographical range of sales of the prod-ucts bearing the mark, market survey reports, market value reports issued by professional assessment agencies and documentation provided by industry associations, will be consid-ered in the assessment. Still, the possibilities to show sufficient evidence of well-known marks in China are very scarce.92 For instance, in Min Shen Zi, the Court held that the Chi-nese characters for ‘VIAGRA’ did not constitute an infringement since it had not previous-ly been used within the territory of China.93 One of the main difficulties for earlier proprie-tors is to provide evidence of sufficient recognition of fame within China as most foreign trade marks are not considered famous for linguistic reasons. It shall be noted that this cri-terion is China’s own interpretation of a well-known trade mark and is not a stipulated re-quirement in the Paris Convention.94

The application

Registering a trade mark in China

As stated above, a trade mark may be registered if it complies with the requirements set up in Article 8 of the Trademark Law. Before applying for registration of a mark, it is recom-mended that the applicant conduct a research at the Trademark Office in order to ascertain whether any similar or identical signs have been registered or applied for.95 The applicant is obliged to complete all official forms and documents necessary.

Introduction
1.1 Background
1.2 Purpose
1.3 Method
1.4 Delimitation
1.5 Outline
2 Bad faith trade mark applications in the EU
2.1 Introduction
2.2 Function of a trade mark
2.3 Protection of unregistered trade marks
2.4 The Trade Mark Directive
2.5 The Council Regulation
2.6 Opposition and declaration of invalidation against trade marks filed in bad faith
2.7 OHIM guidelines on bad faith
2.8 Case Law
2.9 Concluding remarks
3 The trade mark system in China
3.1 Introduction
3.2 The Trademark Law of the PRC
3.3 Definition of a trade mark in China
3.4 Unregistered trade marks
3.5 Well-known trade marks
3.6 The Application
4 Bad faith trade mark applications in China
4.1 Introduction
4.2 Legal framework
4.3 Enforcement of prior rights
4.4 Assessment of preemptive registration
4.5 Case Study – Husqvarna AB
4.6 Additional case studies
4.7 Concluding remarks
5 The 3rd draft Amendment
5.1 Background
5.2 Measures specifically aimed at bad faith trade mark applications
5.3 Measures that affect bad faith trade mark applications
5.4 Public views on the amendment
6 Analysis
6.1 Introduction
6.2 Bad faith trade mark applications and its core
6.3 Towards a brighter future?
7 Final Conclusion
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Bad faith trade mark applications in China