DA WO helps client to recover its trademark from a hoarder

DA WO Law Firm recently successfully assisted our client Cortina N.V. to invalidate the trademark “SAFETY JOGGER” in class 9, i.e. a class of trademarks reserved for a very broad range of products and services, mostly in relation to a specific professional use, as for instance everything relating to safety gear for professionals including “Shoes for protection against accidents, irradiation and fire”. Our client had long before developed the Safety Jogger brand as a line of protective yet fashionable and comfortable shoe-wear to be used by professionals such as construction workers or medical personnel. While Cortina had registered “SAFETY JOGGER” as a trademark worldwide and in a several classes, it soon learned that, in China, a company from Wenzhou, Zhejiang Province, had registered the same “SAFETY JOGGER” as a trademark under class 9 in China (“Target TM”).

Very early on it appeared that the Wenzhou Company was a typical trademark hoarder, having registered more than 130 different trademarks under class 9, some of which were obvious copies of famous international brands.

A procedural battle all the way to the Supreme People’s Court

Cortina had been fighting the registration of the Target TM since 2014.

Initially, the China Trademark Review and Adjudication Board (TRAB), the administrative appeal organ of the China Trademark Office, decided to invalidate the Target TM. In its decision, TRAB held that the Wenzhou Company’s practice of registering a large number of trademarks including many internationally reputed trademarks exceeded its normal business needs. Such trademark hoarding practice has disturbed the normal order of trademark registration in China and has been a nuisance to fair competition on the China market for many years. According to TRAB the Wenzhou Company was considered to have used “unjustified means” to register the Target TM and as such the registration violated article 44(1) of the China Trademark Law.

The Wenzhou Company filed for a judicial review of the TRAB decision before the Beijing Intellectual Property Court. The Beijing IP court eventually cancelled TRAB’s decision and ordered that the registration of the Target TM by the Wenzhou Company would be maintained. This decision was later on confirmed by the Beijing High Court following an appeal filed by Cortina against it.

Beijing IP Court and Beijing High Court both argued that Article 44(1) of China Trademark Law should be applied prudently when it came to affirming the existence of a bad faith trademark registration. Beijing IP Court held that Wenzhou Company had the capability and moreover had shown an intention to use the Target TM. Therefore it could not be considered as such, to have used “unjustified means” to register the Target TM.

Cortina did not give up and brought the case to China Supreme Court. Eventually the highest court of the land ordered a retrial of the case as it found that the decision of Beijing High Court had been based on ineligible evidence. In its decision the Supreme Court explicitly indicating that a “trademark application should be filed based on true intension to use the trademark and trademark registration behavior should be reasonable or justifiable”. The Supreme People’s Court went on to indicate that the Beijing High Court should further ascertain whether the Wenzhou Company had a reasonable cause to register/apply for such a great number of trademarks in class 9, included other well reputed trademarks.

Bad faith does not hold up in IP matters

Following the retrial the Beijing High Court decided that – at the light of the higher requirement set forward in the retrial decision of the Supreme People’s Court – the registration by the Wenzhou Company of more than a hundred trademarks, including the Target TM, specifically in class 9 could not be deemed as reasonable. The original judgements of the Beijing IP Court and Beijing High Court were cancelled and the Target TM was invalidated as being based on bad faith.

The most recent amendment to the China Trademark Law in 2019 was in part focused on cracking down on bad faith trademark practices. It specifically provided that a “trademark application filed on bad faith and filed without intention to use the trademark shall be refused”. This SAFETY JOGGER case obviously offers a clear application of this new provision as well as it confirms China’s strong determination to crack down the rampant practice of bad faith trademark registration and in particular the so called trademark hoarding practice which has been causing so much frustration in particular with foreign trademark owners over the years.

There are several other interesting elements in this SAFETY JOGGER decision. For instance the Court’s indirectly opines about the specificity of a shoe. Stay tuned for more articles on this case in our next editions.

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