Manage the "traffic light" of trademark registration order

【Dharma Vision】

"The court's fair judgment has given justice to the honest management of the company, and it has also safeguarded our goodwill for many years." After getting the verdict, the person in charge of a company in Nanjing, Jiangsu Province could not hide his excitement.

The Shaanxi Provincial High People's Court ruled that the appellant should stop using the unfair competition behavior containing the word "certain shell", issued a statement to eliminate the adverse effects, and jointly and severally compensated a company in Nanjing for the loss of 200,000 yuan.

Trademark is an important part of a company's brand image, an intangible asset and an important intellectual property. In recent years, the construction of trademark brands in mainland China has achieved remarkable results, the quality of trademark application and registration has been continuously improved, and the brand influence has been continuously enhanced. By the end of 2023, there were 46.146 million valid trademark registrations in mainland China.

However, at the same time, malicious registration of trademarks such as "Pang Famous Brand", "Hitchhiker" and "Hoarding Trademarks" has occurred from time to time, from the malicious registration of the trademark of the mascot "Bingdundun" of the Beijing Winter Olympics, to the preemptive registration of trademarks such as "Huoshenshan" and "Leishenshan...... The phenomenon of malicious trademark squatting has frequently entered the public eye, causing widespread concern, which not only seriously harms the legitimate interests of rights holders, but also disrupts the order of trademark registration management and market competition in mainland China. How to manage the "traffic light" of trademark registration order to protect the legitimate rights and interests of enterprises and individuals from being infringed? The reporter conducted an interview on this.

1. Well-known trademarks are not allowed to illegally "free ride"

After the preemptively registered the trademark "Wang Mazi", it was ruled invalid, and an administrative lawsuit filed by a company was dismissed. Recently, the Beijing Intellectual Property Court notified a trademark litigation case - the trademark litigation case of the century-old brand "Wang Mazi". The court held that the preemptive registration of the trademark "Wang Mazi 1651" by a certain company infringed the trademark right of the century-old brand "Wang Mazi".

When it comes to knives such as "kitchen knives", we have to mention "Wang Mazi". Founded in 1651, the "Wang Mazi" brand has been included in the national intangible cultural heritage list by the State Council, and was recognized as a time-honored brand in China in 2011. Due to its century-old skill accumulation, "Wang Mazi" kitchen knife has a wide range of market foundation and commercial value.

However, a company preemptively registered the trademark "Wang Mazi 1651", and the registered types were paper and paper cutters, and "1651" was the Gregorian calendar year when the time-honored brand "Wang Mazi" was founded. The time-honored brand "Wang Mazi" then filed a request for invalidation with the State Intellectual Property Office. The State Intellectual Property Office ruled that the trademark "Wang Mazi 1651" was invalid, and the owner of the trademark "Wang Mazi 1651" believed that the ruling infringed on its legitimate rights and interests, and filed an administrative lawsuit with the Beijing Intellectual Property Court.

After investigation, the Beijing Intellectual Property Court found that the trademark "Wang Mazi 1651" infringed the trademark right of the time-honored brand "Wang Mazi", recognized the repeal of the State Intellectual Property Office, and rejected the litigation claim of the owner of the trademark "Wang Mazi 1651". Li Hui, the presiding judge of the case, said that in daily life, from the perspective of commodity use, paper cutters and kitchen knives and scissors have a certain degree of intersectionality, and from the perspective of consumption channels, they also have a high degree of overlap. The Chinese time-honored brand "Wang Mazi" has a high reputation after publicity and use, and if other entities apply for registered trademarks, they have the obligation to avoid it.

In recent years, the phenomenon of "free-riding" and "hot spots" of preemptively registered trademarks has occurred from time to time, and wrongdoers have preemptively registered signs with a high degree of public attention, such as public resources, social hot spots, unique words in emergencies, celebrity names, and other people's prior well-known brands, with the intention of taking advantage of their "traffic" and additional commercial value to realize improper commercial benefits.

During this year's National Intellectual Property Publicity Week, Lin Guanghai, President of the Third Civil Division of the Supreme People's Court, said in an interview that it is necessary to accurately apply the Trademark Law and the Anti-Unfair Competition Law, intensify the crackdown on malicious preemptive registration of others' trademarks, application for registered trademarks that infringe on the prior rights of others, and clinging to the names of others' enterprises, standardize the order of trademark registration and market competition, and effectively protect the legitimate rights and interests of the parties, so as to effectively alleviate the "anxiety" of the parties to protect their rights.

"The value of the trademark lies in the use, and the goodwill should be continuously accumulated through honest management, and it will not work to try to take a shortcut in the way of 'free riding', 'rubbing the heat' and 'pong famous brand'. Intensifying the crackdown on malicious trademark registration and maintaining the market order of fair competition is undoubtedly a 'reassurance' for innovative entities, and is of great significance for promoting the high-quality development of the mainland economy. Wu Dongping, secretary general of the China Trademark Association, said.

2. Trademark registration should not be "hoarding"

The importance of trademarks is self-evident, and the intellectual property layout of mainland science and technology enterprises is often "the market is not moving, and the trademark comes first". However, the malicious registration and hoarding of trademarks has become a way for some enterprises and individuals to make money, by registering a large number of trademarks that are similar to other people's brands or potentially popular, in order to obtain high profits through transfer or licensing. So much so that many companies have established a brand through honest management, and finally found that it is "making wedding clothes for others".

In March 2022, the State Intellectual Property Office (CNIPA) issued a notice on the continuous and severe crackdown on malicious trademark registration, focusing on 10 types of malicious hoarding and trademark squatting that violate the principle of good faith, violate public order and good customs, seek improper benefits, and disrupt the order of trademark registration.

In the case of unfair competition dispute over the trademark of a certain Bei driving test, a company in Nanjing operated the website and mobile phone software of a certain Bei driving test, but a company in Shanghai preemptively registered the trademark "A certain Bei" and authorized a technology company in Xi'an and a company in Xi'an to use it. Later, a company in Xi'an filed a reverse complaint against a company in Nanjing, requesting the platform to remove its application software. A company in Nanjing believed that the second company had infringed on its legitimate rights and interests and sued it in court. After the first instance of the case, the defendant appealed, and the Shaanxi High Court made a final judgment.

The current law does not stipulate how to bear civil liability for the transferee of the trademark preemptively registered in bad faith, and there is no precedent in the country to follow whether the transferee of the malicious trademark preemptively registering the trademark can be ruled to bear civil liability for unfair competition in this case. "On the premise of knowing the popularity of the 'Moubei' trademark in the field of online driving test, the two defendants not only did not make reasonable avoidance, but actively sought to transfer the 'Moubei' trademark and launched the 'Moubei' online driving test software, with the obvious intention of clinging to goodwill, which met the subjective and objective elements of unfair competition, so even though they were not malicious squatters, but the transferee of the actual use of the trademark, they should also bear the liability for unfair competition." Yuan Huigen, the presiding judge of the second instance of the case and the vice president of the Third Civil Trial Division of the Shaanxi High Court, said.

From 2012 to 2020, a company in Shanghai, as the malicious applicant for registration of the trademark "Moubei", hoarded and preemptively registered a large number of 707 trademarks, including names such as "Movie Paradise", "Orange Light Game" and "Zheng Duoyan".

However, since a Shanghai company was not included as a defendant in the case, it did not need to bear the civil liability for unfair competition in the case. After the case was concluded, the Shaanxi High People's Court issued a letter of transfer of case clues to the Shanghai market supervision department.

At present, the Trademark Law has stipulated that the prior right holder's use of a commercial sign within the original scope may not be deemed to be infringement, but there is no clear provision on whether it can sue for malicious preemptive registration and require it to bear liability for unfair competition. However, judging from the nature of the act of preemptively registering a trademark in bad faith, it is an act carried out for the purpose of infringing the rights and interests of others, and there is no substantial difference between it and ordinary infringement. Yuan Huigen said.

However, it should also be noted that enterprises choose to register a large number or even all fields of a certain trademark, which may be to prevent their trademarks and trade names from being improperly preemptively registered, and then avoid adverse effects on their business layout and goodwill, for example, Xiaomi Technology Co., Ltd. has registered thousands of trademarks, covering many fields.

At the same time, if a large number of registered trademarks are not actually used, it is easy to cause the trademark to be "idle". How to effectively stabilize the expectations of market entities for trademark rights protection, while fully maintaining the order of trademark registration and use?

"It is necessary to strictly implement the value orientation of the Trademark Law to encourage the use of trademarks, promote the organic coordination of trademark administrative law enforcement standards and judicial adjudication standards, and support the trademark administrative law enforcement authorities to revoke them in accordance with the law for only registered trademarks but not for real, legal and effective use, and effectively clean up 'idle trademarks'." Lin Guanghai said.

3. Safeguard the trademark rights and interests of enterprises through multiple channels

"Preemptive registration does not mean that registration is obtained as a matter of course, and the State Intellectual Property Office will make a decision to reject a trademark application that infringes on the prior rights of others in accordance with the law, so as to stabilize the reasonable expectations of legal operators." The relevant person in charge of the State Intellectual Property Office said that the State Intellectual Property Office continued to improve the trademark examination and trial standards, strengthened the application of information technology, moved the gate forward, cracked down on hoarding, and restricted illegal transfer for profit at the end.

In May 2023, the State Intellectual Property Office issued the Work Plan for Systematic Governance of Malicious Trademark Registration to Promote High-quality Development (2023-2025), which requires the improvement of the working mechanism for strictly cracking down on malicious trademark registration in accordance with the law, deepening the crackdown on malicious trademark registration in all fields, etc., and systematically governing malicious trademark registration in various aspects.

At present, the mainland has a relatively complete trademark rights protection system. Liu Yijun, Judge of the Beijing Intellectual Property Court, said that according to the different circumstances of bad faith registration of trademarks, prior rights holders can usually protect their legitimate rights and interests in the following ways: first, confirm trademark rights through administrative procedures and administrative litigation, and file trademark opposition applications and trademark invalidation procedures against bad-faith preemptively registered trademarks to protect their legitimate rights and interests. The second is to exercise the right of action through civil litigation procedures, and seek relief by filing a lawsuit with the people's court in accordance with the Trademark Law, the Anti-Unfair Competition Law and other relevant laws and regulations. The third is to protect rights through complaints from the administrative department, and report complaints to the intellectual property administrative department.

Wu Dongping said that trademark is an important carrier of the brand and the core intellectual property rights of the enterprise. Strengthen the dynamic monitoring of trademarks, strengthen the investigation and early warning of malicious trademark registration, and once it is found that other market entities have behaviors such as "pong brand" and "free ride", and apply for registration of trademarks that are identical or similar to the enterprise, they can make full use of legal remedies such as opposition and invalidation, so as to achieve timely detection and precise crackdown.

"In practice, it has been found that some enterprises acquire trademarks by purchasing trademarks instead of applying for trademarks on their own, and once they are involved in litigation, if the transferor is a malicious hoarding of trademarks or malicious squatters, then even if the trademark is transferred by the enterprise, there is still a risk of being invalidated, and it may be 'a waste of water'. Therefore, when an enterprise acquires a trademark, it should carefully examine whether the trademark has any defects in rights. Liu Yijun said that the essence of the trademark lies in the use, and the enterprise should use the registered trademark in accordance with the trademark registration logo and commodity category specifications, and in commercial use, avoid the deformation and alienation of the registered trademark, or use it in the non-approved goods or service category. At the same time, enterprises should standardize and retain evidence of the use of trademarks such as sales contracts, invoices, and advertisements, so as to protect their rights. (Reporter Wang Jinhu)

Source: Guangming Daily