New ammunition against trade mark squatters in China?

Due to the “first to file” system that operates in relation to the registration of trade marks in China, there are copious instances of trade mark squatting. This presents a major problem for those trying to protect their brands in China. However, there has been a recent development in this area.

A trade mark in China, can be invalided on one of two grounds. Either on relative grounds, which means that the trade mark in question conflicts with other existing trade marks, and this action must be brought within 5 years. Or it could be invalided on absolute grounds whereby the mark is declared unsuitable for registration and this action can be brought at any time.

Due to the 5 year period in which you have to bring an action against a trade mark that is conflicting, the scope of this ground is of limited practical use. However, in the recent case of Bobdog (China) Children’s Products Co., Ltd. vs TRAB, the Beijing Higher People’s Court have suggested that if a trade mark has been improperly registered, then the 5 year limitation is not applicable.

The facts of the case are follows:

• In 2004 Funjan Jinjiang Wan Tai Sheng Footwear & Clothing Company Limited registered the trade mark for registration no. 3423370 “BABOBOG” & device mark.
• The trade mark was assigned in 2015 to Quanzhou Bobdog Children’s Products Co. Ltd.
• Bobdog (China) Children’s Products Co. Ltd owned prior registered trade marks both in Chinese and English in China in relation to the “Bobdog” trade mark.
• Bobdog (China) Children’s Products Co. Ltd applied to have the 2004 “BABOBOG” and device trade mark invalided.

The decision of the Trademark Review and Adjudication Board at first instance was that the application for invalidation on relative grounds failed due it being made outside the 5 year period. In addition, Bobdog (China) Children’s Products Co. Ltd.’s application for invalidation on absolute grounds also failed. The application was then appealed to Beijing IP Court.

The court to into account the fact that the original applicant had registered over 200 trade marks. In addition to the fact that Quanzhou Bobdog Children’s Products Co. Ltd, had made applications to register trade marks similar to that of trade marks owned by Bobdog (China) Children’s Products Co. Ltd, and had also failed to provide a reasonable explanation as to why they had acquired the trade mark in issue in 2015.

The court found that due to the circumstances surrounding the registration of the trade mark in question, it had been improperly registered and held that the registration should be cancelled.

Quanzhou Bobdog Children’s Products Co. Ltd, appealed this decision to the Beijing Higher People’s Court due to the fact the invalidation was time barred as it was over the 5 year period, and also because they claimed they had an intention to use the trade mark. The higher court found that the invalidation was not time barred due to the fact that the trade mark had been improperly registered. Although, this decision does not mean that there is now a widely accepted of principle of invalidating a trade mark on the grounds of bad faith China, it does show a step in the right direction to addressing the issue of trade mark squatting.

Seeking trade mark protection in China is often an important expansion step for your business should you decide to start manufacturing or selling their goods in China. This case shows that there is potentially new light at the end of the tunnel for your businesses if you are initially blocked from registering your trade mark in China because a squatter has beaten you to the punch. Briffa are experts in all aspects of trade mark law and practice and, through our extensive network of international agents, we assist our clients with trade mark registrations in countries all over the world. If you would like a free consultation with one of our specialist trade mark lawyers, please contact us on 020 7096 2779 or info@briffa.com.