To Distributor’s Preempted Trademark Registrations on Dissimilar Services
Recently, GoldenGate obtained a series of favourable decisions from the Beijing IP Court on invalidation actions for a client against its distributor’s pre-empted trademark registrations.
The client is a famous European writing instrument supplier. One of its Chinese distributors registered the client’s trademarks for dissimilar services like education in the absence of the client’s consent, and used the client’s trademarks for those services. The client filed invalidation actions against those registrations with the China IP Office (CIPO), but the CIPO decided to affirm them. The CIPO held that they were registered for dissimilar services and did not breach the Trademark Law of China.
Dissatisfied with the CIPO’s decision, the client appealed to the Beijing IP Court, which ruled to cancel the CIPO’s decision. The court held that the client’s marks have high reputation, and the distributor should be well aware of this through its business relationship with the client. It is apparent that those trademarks were registered free-riding on the client’s goodwill, which goes against the principle of good faith. Therefore, the trademarks registered in such an unfair manner should be invalidated pursuant to Article 41.1 of the Trademark Law of China.
In practice, it frequently happens that a distributor pre-emptively registers the proprietor’s trademark. Where a pre-empted trademark is registered on goods that are similar to those on which the proprietor has previously used its mark, the invalidation can be based on Article 15 of the Trademark Law of China, which is consistent with Article 6septies of the Paris Convention. However, where a distributor’s registration is on dissimilar goods or services, Article 15 cannot be applied. In these cases, upon our request, the Court applied Article 41.1 of the Trademark Law of China at its discretion, which successfully remedies the legal loophole.
