Protecting well-known brands not registered as trademarks

By Liu Yushen, Chang Tsi & Partners
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Well known foreign brands face infringement headaches of many kinds in China.

The legal system and judicial practice in the PRC are improving, and intellectual property law can provide some protection for well-known brands. However, many problems still exist, one of the most prominent being the question of to what extent a well-known foreign brand that has not been registered as a trademark in the PRC can obtain protection.

Securing protection

Liu Yushen 刘育深, Lawyer/ Senior Client Manager 律师/高级客户经理, Chang Tsi & Partners 铸成律师事务所
Liu Yushen
Lawyer, Senior Client Manager
Chang Tsi & Partners

If IP registration (including registration of trademarks, designs and copyrights) has been carried out in the PRC for a well-known foreign brand, it will have lawful rights when claiming administrative or judicial protection. However, if no applications for, use or registration of a well-known foreign brand has been made or carried out in the PRC, it will be difficult to secure effective legal protection.

Trademarks that are not registered may or may not enjoy public recognition.

Not registered but recognized

In this scenario, the well-known foreign brand is not registered in the PRC, but nevertheless it enjoys a substantial degree of recognition among the public.

In such circumstances, the legal basis for according protection to well-known foreign brands is to be found in international conventions. Article 6 of the Paris Convention for the Protection of Industrial Property provides that if an unregistered trademark has become well-known in a country which is a signatory to the Convention, a third party may not register or use that trademark for or on identical or similar goods. The Agreement on Trade-related Aspects of Intellectual Property Rights (known as TRIPS) contains similar provisions, and also extends them to service marks.

The first paragraph of article 13 of the PRC Trademark Law is essentially consistent with these two conventions, reading: “A trademark which constitutes a reproduction, imitation or translation, liable to create confusion, of another’s well-known trademark not registered in China and which is the subject of an application for registration for identical or similar goods shall be refused, and its use shall be prohibited.”

The function of a trademark is to identify and distinguish the source of goods and services. Similarly, a trade or service mark that has actually been used and which serves to identify and distinguish the source of particular goods and services needs to be accorded legal protection, even if it has not been registered. Actual use and having a significant degree of public recognition in the market are two key conditions for determining whether an unregistered trademark can be accorded legal protection. Both the terms “well-known trademark” in the first paragraph of article 13, and “trademark which is already in use and which has a certain degree of influence”, in article 31 of the Trademark Law, reflect these two key legal conditions.

It should be noted that the protection afforded to well-known foreign trademarks not registered in the PRC does not cross classes. The law does not expressly prohibit applying for registration of another’s well-known trademark for non-identical or non-similar goods.

Not registered, not recognized

In the other scenario, the well-known foreign brand is registered and has a high degree of public recognition abroad, but is not used and does not enjoy a substantial degree of public recognition in the PRC.

The question is, when another party registers the same brand in the PRC, is the original brand-owner protected under PRC law?

Protection is extremely difficult to obtain in such circumstances. Intellectual property rights, including trademark rights, are territorially defined; the legal protection enjoyed by a well-known trademark registered in a foreign country does not automatically extend to the PRC. To obtain legal protection in the PRC, trademark rights or a prior use right must arise under PRC law. If a mark is neither registered nor used in the PRC, trademark rights or prior use rights cannot arise, and the foreign trademark rights holder will have no ground upon which to claim protection under the PRC Trademark Law.

The need to register

The PRC has a trademark registration system. While the Trademark Law acknowledges that under certain circumstances, trademark rights can be obtained through the use of a mark, the securing of trademark rights through registration is the fundamental principle.

The main basis for the protection of unregistered trademarks in the Trademark Law can be found in articles 13, 15 and 31. Each of these articles protects unregistered trademarks which can establish prior use by prohibiting malicious pirate registration.

The protection offered by the PRC Anti-unfair Competition Law to the name or trade dress peculiar to a well-known product is also a form of protection of unregistered trademarks or trade logos. However, the scope and degree of protection offered by these provisions are limited. If a holder of rights in a well-known foreign brand that has not been registered as a trademark in the PRC wishes to obtain the protection of PRC law, it must file an application in the PRC for registration of the relevant logo for its goods or services as a trademark, design patent or copyright. It should also preserve evidence of its trademark being well known abroad.

Doing this will not effectively punish infringements against an unregistered well-known brand that have already occurred. For example, if a rights holder cannot, with respect to a “pirate” registration that has already taken place, provide evidence that the other party made the registration in bad faith and that its trademark has a substantial degree of public recognition, it will be almost impossible to obtain satisfactory legal protection.

However, proceeding in this manner is better late than never, providing an effective basis for the rights holder to take legal steps against future
infringements.

Liu Yushen is a lawyer and senior client manager at Chang Tsi & Partners

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