Trademark dispute case study proves value of early registration in China

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This case concerns a European company’s defence against an unjustified trademark attack at the Shanghai customs in China. A European garment company (EuroCo) has had its trademark registered in Europe since 2003. EuroCo did not apply for registration of the trademark in China because its products were sold mainly within Europe. Six years later, a Chinese company (ChinaCo) registered the same trademark in China. In 2011, EuroCo engaged a Chinese-based manufacturer (the supplier) to manufacture garments carrying the trademark (branded products) in China. EuroCo and the supplier agreed in a supply agreement that all branded products should be exported out of China to EuroCo.

CMS-Colin_Liu

When the supplier attempted to export 6,000 pieces of the branded products to EuroCo via Yangshan Port in November 2011, ChinaCo requested the Shanghai customs to seize the branded products based on allegations that the branded products infringed upon the trademark rights of ChinaCo. The Shanghai customs detained the branded products in December 2011 and commenced the trademark infringement investigation.

Legal grounds for seizure

The legal grounds for seizing the branded products can be found under the Regulations of Customs Protection of Intellectual Property Rights. Article 3 of the regulations prohibits the import and export of any products that infringe upon intellectual property rights (IPR) in China. The IPR include trademark rights, patent rights and copyrights that are protected in China. According to the regulations, after ChinaCo has filed a request to protect its registered trademark with the General Administration for Customs, the local customs will notify ChinaCo whenever it discovers any imported/exported products that are suspected of infringing upon the registered trademark. ChinaCo may then request the local customs to investigate the potential trademark infringement. The local customs has the right to detain the suspected products during the course of its investigation.

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Colin Liu is a partner at CMS, China in Shanghai. He can be contacted on +86 21 6289 6363 or by email at colin.liu@cmslegal.cn

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