Addressing trademark piracy against popular movie character names

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AChinese individual has registered a trademark on furniture using the Chinese translation of “Iron Man” and the graphic of this movie figure. This trademark is on sale on the internet at US$33,333, while the registration fee for the trademark was no more than US$500. This is just the tip of the iceberg of China’s rampant trademark pirating activities. Many companies and individuals operate trademark pirating as their businesses, and many companies have successfully registered and used very similar trademarks to “free ride” on the reputation of more well-known companies.

王亭入 Damien Wang 铸成律师事务所 高级律师、客户经理 Senior Associate, Client Manager Chang Tsi & Partners
王亭入
Damien Wang
铸成律师事务所
高级律师、客户经理
Senior Associate, Client Manager
Chang Tsi & Partners

Character names from movies are a popular target in trademark pirating activities. Under the current trademark law system of China, there is no single solid and powerful deterrent sufficient to stop pirating movie character names as a trademark. The main reasons for this include: the extreme difficulty in acquiring well-known trademark recognition; the merchandising right of these names is not accepted; movie character names do not enjoy copyright; controversial opinions on whether movie character names count as a prior right, as stipulated in article 31 of the Trademark Law; and the “adverse effect” clause in the Trademark Law cannot be cited in solving conflicts of private rights.

In order to protect movie character names, right owners should establish a strategic and comprehensive plan so that their valuable and limited legal budget can be allocated more efficiently.

Analysis

  1. Right owners should conduct a statistical analysis of the trademark pirating activities. For example, by checking the website of the China Trademark Office (CTMO), people can find 133 trademarks containing the words “Harry Potter”, among which 65 are owned by true owners and 68 are pirated by others in a large number of classes. Checking the same website, people can find 44 trademarks containing the word “Batman”, among which 34 are owned by the true owner, and 10 are pirated by others in seven classes. It can be concluded that trademark pirating can happen in any class, but occurs more frequently in some classes. And the higher the reputation of a movie or character, the more likely trademark pirates will register it as a mark in less common classes.
  2. Right owners should make standards for categorisation, and categorise their brands. Different resources, strategies and budgets should be allocated to different brands depending on their categories. For example, it seems necessary to register “Tom and Jerry” or “007” in all 45 classes, while this may be unnecessary for “The Hulk”.

    First to file

  3. Right owners should beware of the first-to-file principle, and file defensive applications as soon as possible on related classes and sub-classes. Trademark application is much cheaper than an opposition – let alone the difficulties in collecting evidence and winning an opposition. So, when trademark pirating is expected in some classes, filing a new application in advance may be the best way forward.
  4. Right owners should seek multiple-class applications and full sub-class applications. Each of the 45 classes defined by the Nice Agreement is divided into a sub-class in China. Generally speaking, only the goods within the same sub-class are considered by the CTMO to be similar goods. Right owners should cover both related classes and all sub-classes for one application.

    The amendment to the Trademark Law, effective from 1 May 2014, brings good news. One application can then designate multiple classes, so the costs will decrease. Right owners can also bargain for a lower price with their trademark agents.

  5. Right owners should pay attention to the Chinese version of the movie character’s name. Many foreign characters have been given unofficial but widely accepted Chinese names before the movie was officially introduced into China. Right owners should pay attention to such Chinese names, and file applications as soon as possible. Lessons could be learnt from “Viagra” and “Sony”, both having lost their Chinese counterpart names to China companies. Although painstaking efforts were made until the supreme court rendered its ruling, these two companies failed to take back their brands.
  6. Right owners should take pre-emptive action regarding collection of the evidence of using the trademark. Evidence of use is paramount in actions against trademark pirating. Nevertheless, usually the clients find that they have to provide evidence that occurred several years ago, before the trademark in dispute was registered, and the result of evidence collection is often fruitless. Right owners are highly recommended to save any evidence of use on a pre-emptive basis. This is particularly important for a client’s most important trademarks.
  7. Right owners should apply for copyright registration in China. Unless the adverse party has contrary evidence, the copyright registration certificate singly can be protected in all 45 classes. However, the date of completing copyright registration must be earlier than the application date of the trademark in dispute.
  8. Right owners should retain a comprehensive trademark surveillance service in China. Most trademark agencies in China can now provide such a service.
  9. Right owners should seek well-known trademark recognition to achieve cross-class protection. Since the “F1” mark was recognised as well known, the CTMO supported the well-known status of the F1 trademark in over 50 oppositions. Given the difficulty in obtaining well-known recognition, right owners should give strong support to the trademark agencies, both financially and evidentially.
  10. Right owners should make full use of the non-use cancellation system. For trademark pirates whose purpose does not include actual usage or licence, three years non-use cancellation can be a very effective method. Cancelling the registration of these trademarks is important for preventing these marks from being sold or licensed to another party that may put the mark into actual use.

Last but not least, right owners must be aware of the fact that there is no once and for all solution to solving trademark pirating problems in China. When there is no choice, right owners may have to purchase pirated marks, or change their brands. However, by establishing a strategic and comprehensive plan, right owners can diminish this possibility to a minimum.

Damien Wang is a senior associate and client manager at Chang Tsi & Partners

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