Beijing court applies strict criteria in ascertaining trademark use evidence

By Ming Xingnan, Xia Huan, Wanhuida Peksung IP Group
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Jiangxi Hengda Hi-Tech applied for the registration of No. 6931816 trademark (disputed mark, see graphic below) in September 2008. The trademark was registered in May 2010, covering goods “legume drink, coke, milk tea (non-milk based), vegetable drink, pure water (drink), vegetable juices (beverages), non-alcoholic fruit juice beverages and lactic acid beverage (fruit products, non-milk)” in Class 32.Hengda-hires-2

On 30 December 2013, a natural person named Pan Di filed for the cancellation of the trademark before the China Trademark Office (CTMO), on the ground of non-use for three consecutive years. On 27 September 2014, the CTMO found that the use evidence produced by Jiangxi Hengda was sufficient to maintain the registration. On 23 October 2014, Pan Di applied for the review of cancellation before the Trademark Review and Adjudication Board (TRAB). The TRAB scrutinized the trademark use evidence and found that there were a number of inconsistencies in the evidence submitted by Jiangxi Hengda, which failed to form a complete chain of evidence, and thereby cancelled the trademark on 7 January 2016.

明星楠 MING XINGNAN 万慧达北翔知识产权集团合伙人 Partner Wanhuida Peksung IP Group
Wanhuida Peksung IP Group

Jiangxi Hengda brought a lawsuit to the Beijing Intellectual Property Court. The court, which held that the TRAB’s findings dissevered the connection of evidences, overruled the TRAB decision and maintained the validity of the trademark. Pan Di and TRAB appealed before the Beijing High Court, arguing, inter alia, that:
(1) Jiangxi Hengda had forged evidence;
(2) the evidence submitted could not prove that the disputed mark had been put into genuine commercial use during the designated period, so the facts ascertained in the first instance were erroneous.

The Beijing High Court detected a number of defects in the trademark
use evidence:

The bar code (used to identify the manufacturer of commodity) of the Hengda mineral water indicated another entity other than the trademark licensee or the outsourced manufacturer of the trademark licensee.

The time stamps on the invoices accompanying the licensee’s sale of Hengda mineral water predate the time when the blank invoices were claimed by the licensee from the local taxation bureau.

Some seemingly plausible use evidence was formed shortly before the expiry date of the designated period. Even if such evidence were genuine, the court found it difficult to rule out the possibility that it was just symbolic use to maintain the registration of the disputed mark.

The photos intended to prove that Hengda mineral water was offered for sale at retailers were questionable because various details indicated that the photos had been taken in a different season than that indicated by the time stamps.

夏欢 XIA HUAN 万慧达北翔知识产权集团律师 Attorney-at-Law Wanhuida Peksung IP Group
Wanhuida Peksung IP Group

Therefore, the court questioned the credibility of the evidence submitted by Jiangxi Hengda. Given that some evidence was forged, the Beijing High Court applied strict criteria in ascertaining the trademark use evidence. On 29 November 2017, the court reversed the first instance decision and granted the cancellation request based on the finding that the evidence furnished failed to prove that Jiangxi Hengda had put disputed mark into genuine, legitimate and continuous use, during the designated period.

In this case, the Beijing High Court clarified the scrutinizing approach for the trademark use evidence: in order to fulfil the purpose of the cancellation mechanism, the court should adopt higher scrutinizing criteria if the trademark registrant is found to be engaged in forging evidence. The court opines that, where multiple pieces of evidence are submitted by the party so as to form an evidence chain, the authenticity, legality and relevance of every single piece of evidence, as well as that of all the evidence as a whole, should be assessed. The court should also weigh the extent of relevance between the evidence and facts, and the association among the evidence to assess their probative force.

In summary, considering that some trademark registrants put the trademark into symbolic use or even forge use evidence to maintain the registration, it is essential to assess, when scrutinizing trademark use evidence, whether the registrants intend to put the trademark into genuine use.

Jiangxi Hengda, a manufacturer specializing in abrasion and corrosion-resistant materials for industrial equipment, filed for the registration of trademark compromising “Hengda in Chinese Character” in 43 classes, most of which had little connection with its business. Given that the designated goods of the disputed mark in Class 32 are hardly relevant to its business, the registration of the disputed mark is unlikely to be for genuine use. Moreover, cancellation requests have been filed against Jiangxi Hengda’s registered trademarks in a total of 34 classes.

On 16 December 2013, prior to the cancellation request of Pan Di, another cancellation action was brought against the disputed mark. Under such circumstance, it is reasonable to conclude that Jiangxi Hengda is prepared for the cancellation action. That explains why most of the documented evidence was formed shortly before the expiry of the designated period. Addressing similar situation, the Regulation on the European Union Trade Mark and the Trade Marks Ordinance of Hong Kong explicitly rule out evidence formed shortly before the expiry of the designated period, to prevent the trademark registrant from taking remedial measures and fabricating use evidence to sustain the trademark registration.

Ming Xingnan is a partner and Xia Huan is an attorney-at-law at Wanhuida Peksung IP Group

Wanhuida Peksung IP Group


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