In view of the challenging IP environment in China, the question arises whether acquiring the status of well-known trademark (Articles 13 and 14 of the Chinese Trademark Law) helps to enjoy wider protection. Hens de Koning-Ghijsen (a member of the MARQUES China Team), Kenny Ren (member of the Famous and Well-Known Marks Team) and Dan Plane (member of the China Team) discuss in this post for the Class 46 blog.

Marks can acquire such well-known status in China in three ways:

1. by trying cases before the Trademark Office and Trademark Appeal and Re-examination Board (TRAB) – such as oppositions, appeals and invalidations;
2. through enforcement by the Administration for Industry and Commerce (AIC) against trade mark infringement and counterfeits; and
3. in civil litigation against trade mark infringement.

This article focuses on the first option.

Acquiring well-known status

Obtaining the status of a well-known trade mark may take quite a while, will involve substantial costs, and the submission of a lot of evidence to prove a substantial awareness by the relevant sector of the public, the duration of use of the trademark, the extent and geographical scope of advertising activities, other records of well-known status being granted, and other factors which may make the mark well known.

Once such well-known status has been acquired, the scope of protection proves to be limited:

• The recognition of a trade mark as well-known happens on a case-by-case basis, so the successful recognition of a well-known mark in one case does not necessarily mean that another case will lead to the same result;
• The protection of the well-known status is further limited to identical and similar goods, and to other goods only if other factors apply, such as any association between the goods and services, the distinctiveness of the mark, the degree of its reputation and the possible confusion that will be caused among relevant consumers;
• TMO and TRAB prefer to rely on prior registrations rather than on the well-known status of a trademark.

Therefore, we find ourselves still arguing in each case (including simple oppositions) that our trade marks are well-known, submitting all the above-mentioned evidence and referring to cases where this has been confirmed by the relevant judge. At the same time, because we do not want to be dependent on the sometimes divergent decisions of the various bodies, we maintain trade mark registrations in the relevant classes (and ever growing sub-classes).

In our experience, and in cases where we both rely on a prior registration and the well-known status of the trade mark – which we do in all cases – the TMO and TRAB inevitably issue a decision solely on the basis of the prior registration, avoiding applying the provisions of Article 13.3 of the PRC Trademark Law by stating that this is no longer necessary since there is a prior registration in place.

For example, in an opposition against an infringing trade mark in class 31 we received a favourable decision for all goods mentioned in the application because of our prior registration, except for “grass for cats”, which appeared to be part of a new subclass and was not covered by our prior registration. This was not something to worry about in practical terms, but in such case it would have been a logical step – in view of our consistent argumentation – to have the status of well-known trade mark cover such “loose ends”.

Another question is why, in spite of the recent legislation to counter bad faith filings and the huge amount of bad faith applications still going on, TMO does not maintain a list of trade marks that have (once) been recognised as well-known trade marks to pre-emptively reject applications for identical or similar trade marks for identical or similar goods.

Fifth Amendment

Last but not least, the proposed amendment to the Chinese trademark law (Fifth Amendment draft) is particularly relevant on these points. This amendment imposes stricter trade mark use obligations (by the obligation to periodically submit of evidence of use, US-style), primarily to combat bad faith applications. If this amendment would lead to a decrease in bad faith registrations, then hopefully, the need for trade mark owners to file defensively may decrease as well.

However, it remains to be seen whether this obligation to provide evidence of use will actually be of any real help to owners of well-known trademarks where: (i) the well-known status of a trade mark is only granted on a case-by-case basis and therefore they need to have an extensive portfolio of defensive registrations, and (ii) trade mark owners may lose their “back-up” defensive registrations in other classes where they will not be able to prove use of their trademarks in these other classes. As a result, well-known trade mark owners are likely to end up with valid registrations of their trade marks by third parties for goods or services for which they have no evidence of use.

Is well-known protection worthwhile?

In short, and while the status of well-known trade mark in China certainly is a “nice to have”, it does not practically lead to a substantially better protection of the well-known trade mark or less cost, at least not yet. Due maintenance by registrations in all classes, and the regular filing of oppositions and cancellations in a huge number of cases is still needed.

The proposed Fifth amendment of the Chinese Trademark Law might end up assisting with these issues in the longer term, but for now, owners of trade marks that have been recognized as a well-known trade mark would need to take a huge “leap of faith” that the scope of the protection of the well-known trade mark – if granted in the particular case – will indeed extend to goods in those other classes.

This brings me to the actual utility of even spending the money required to obtain that first “well-known” trade mark decision. If owners of “well-known” trade marks just end up still having to oppose everything and maintain defensive registrations, and TMO or TRAB never find your mark’s prior well-known status as a standalone basis for rejection of the opposed/invalidated mark, we really have to question the wisdom of even obtaining the status for all but the biggest brands.

Hens de Koning-Ghijsen is legal counsel at Heineken and Vice-Chair of the MARQUES China Team

Kenny Ren is Legal Manager at Christian Louboutin and a member of the MARQUES Famous and Well-Known Marks Team

Dan Plane is a lawyer with East IP and a member of the MARQUES China Team