Evolution of admission of new evidence in trademark lawsuits

By Michael Fu, Chang Tsi & Partners
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After the central government acceded to the World Trade Organisation (WTO), it amended the trademark law accordingly, pursuant to the relevant agreement in 2001, by requiring trademark administrative actions to be subject to judicial review. If a party is not satisfied with a judgement made by the Trademark Review and Adjudication Board (TRAB), it may bring an administrative lawsuit at the Beijing First Intermediate People’s Court within a statutory deadline.

付同杰 Michael Fu 铸成律师事务所 客户经理、高级律师 Client Manager, Senior Associate Chang Tsi & Partners
Michael Fu
Client Manager, Senior Associate
Chang Tsi & Partners

Since 2001, caseload involving trademark administrative litigation has increased dramatically, from 19 cases in 2002 to just over 2,000 cases in 2010. From 2002 to 2012, the Beijing court accepted a total of 7,896 cases of trademark administrative litigation, of which 6,793 have been disposed of.

A hot legal issue in trademark administrative litigation is the admission of new evidence. The parties often submit new evidence in litigation proceedings and ask the court to admit such evidence as valid. Depending on the circumstances of a case, the court has the right to decide at its discretion whether new evidence is admissible, and whether the new evidence is admissible is sometimes directly related to whether the case can win. According to the author’s experience, the court is gradually evolving in its attitude towards whether it can accept new evidence in trademark administrative proceedings. This evolution process can be summarised in three stages.

Review based on file

Stage one: the court reviewed the legality of a trademark administrative action strictly based on the details of a file, and did not admit the new evidence submitted during litigation proceedings. A typical case was the Heineken trademark administrative case between Heineken and Thai Chung Tobacco International Trading (2004).

Beijing High People’s Court found that the intermediate decision by TRAB based on the request of the administrative counterpart, Heineken, over the review of a trademark opposition case was in compliance with the law and legal procedures. According to the principle that a party is required to provide evidence to substantiate the claim lodged by itself, Heineken as an applicant for the review of the trademark opposition had the burden of proof on its trademark as a well known trademark, and other issues. Since Heineken did not submit sufficient evidence to the TRAB during review procedures to substantiate its claim, it had not fulfilled the burden of proof required by legislation.

If the court accepted the evidence or reasons presented by the applicant in the litigation proceedings, which were not presented in the trademark review process, it would probably result in revoking the TRAB’s judgment, which was not in compliance with the principle of equal rights for the litigants. Therefore, the new evidence provided by Heineken during the first trial was not adopted in this case.

Chance of relief

Stage two: the court considered legal issues mainly from the point of view of “whether a party has a chance of relief”. If the court did not accept the new evidence provided by the party, the party would lose the case without any relief. Taking this into account, the court began to gradually accept some new evidence in administrative proceedings. A typical case is the administrative case of Best Buy Enterprise Services v TRAB (2011).

During the first trial of the case, Best Buy submitted to the court evidence on the use of the filed trademark in commercial activities in China, including promotional materials that appeared in newspapers and magazines related to its use. The court of first instance held that this evidence was new evidence submitted in the litigation proceedings without any justified reason, and that such evidence not be accepted. Subsequent investigations found that Best Buy was among the top 500 companies worldwide. It opened its first store in Shanghai in 2007, attracting extensive media coverage and industry attention. It used the trademark it applied for in its business and advertising activities.

The Supreme People’s Court found that since the registration process for the trademark in dispute had not been completed, the facts included in the litigation during the review process needed to be considered to determine whether to dismiss the trademark registration. In this case, Best Buy submitted substantial evidence on the actual use of the trademark during the first-instance proceedings.

The facts reflected by this evidence could affect the judgment of the distinctiveness of the trademark. If this evidence was not taken into account, Best Buy would lose its chance for relief. Therefore, in determining whether the trademark had any distinctive feature, such evidence should be considered. It was not right for the court of first instance to deny the admission of new evidence on the ground that such evidence was submitted in the litigation proceedings without any justified reason.

Open attitude

Stage three: the court held a relatively open attitude towards new evidence, with increasing acceptance of new evidence. According to the author’s experience, the court generally accepts three types of new evidence:

  1. New evidence of a reinforcement nature. A party has submitted reasons and relevant evidence during review proceedings, and then submits supplementary new evidence during litigation proceedings to reinforce its claims;
  2. New evidence with reasonable grounds. For example, if a party confirms during review stage that it did not receive notice from the TRAB, and so it can only submit new evidence in the litigation stage;
  3. New evidence sufficient to affect the substantive hearing of a case. For example, a party submits in the litigation stage an effective judgment on the revocation of a prior trademark to substantiate that the obstacles blocking access to an application for trademark registration have been removed.

As to the point of time for submission of new evidence, the author believes that, based on the principle of fairness, the parties should submit new evidence during the proceedings at first instance instead of the proceedings at second instance.




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