Case study: TM confirmation under adverse circumstances

By Frank Liu and Jerry Huang, Shanghai Pacific Legal
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It’s not unusual to see companies making belated applications for trademarks. For example, the core trademark may be pre-emptively registered due to negligence, or is utilised prior to application to seize business opportunities. Alternatively, the application may be blocked because the mark is too simple or considered too similar to existing trademarks.

Trademarks are essential for identifying and distinguishing goods and services, so the absence of trademark protection can have a substantial impact on a company’s business development and marketing operations.

Frank Liu, Shanghai Pacific Legal
Frank Liu
Partner
Shanghai Pacific Legal

This article aims to provide a concise overview of problems and challenges encountered in trademark confirmation, drawing on examples observed in practice.

Ignoring trademark application due to overconfidence. Company A, an overseas entity, had established a strong reputation in international markets over several years of operations. Its trade name served as a crucial trademark, safeguarding its market share and enabling it to crack down on infringers.

After operating in the Chinese market for years, the company had grown overly confident in its industry position. It had long believed that it wouldn’t matter to its business operations whether it registered its trademark or not. Only after discovering that free riders were eroding its market share did the company realise the importance of trademark registration.

By that time, however, company A faced hurdles to its application due to existing identical or similar trademarks in its core categories.

After thoroughly analysing company A’s operating conditions and prior trademarks, a tailored solution was devised for confirming its trademark. Given the pre-emptive trademark registrations and similar prior trademarks in core categories, the confirmation process was complicated and time-consuming. The author not only forecast and analysed the interim outcomes of the actions under the process, but also executed targeted and multi-pronged strategies against each prior trademark. This included timely submission of multiple rounds of standby trademark applications in a timely manner according to the progress of the cancellation actions.

infringement
Jerry Huang
Associate
Shanghai Pacific Legal

After removing all obstacles through co-ordinated action on multiple fronts, company A managed to register its trademark in its core categories and goods. This outcome fortified the overall foundations of the company’s trademark but also added a sting to its trademark safeguards in the Chinese market. In addition, the early action planning and forecasting also provided a valuable reference for the company’s business arrangements.

Urgent trademark application in the context of business adjustments. Company B has diverse operations in design, retail and home furnishing. To seize market opportunities arising from adjustments to its business, the company put its trademark C into online and offline use while seeking a comprehensive trademark application.

Despite its initial searches having uncovered several potentially similar prior trademarks, company B had heavily invested in promoting trademark C, so making a switch was impractical. In addition to making some urgent trademark applications to avoid any pre-emptive registration, the author also analysed the registration success rate to prepare for follow-up actions.

Not surprisingly, trademark C applications were rejected due to the existence of prior similar marks in core categories. When company B was on the verge of quitting follow-up actions, the author further conducted an in-depth analysis and adjusted the strategy quickly to focus the application on a few core categories.

The author then assisted the company in collecting evidence on trademark use and improving grounds for a review of the rejection. After rounds of concerted efforts, the company was able to successfully register the trademark in several core categories, having its urgent business needs met in a shorter time and at a lower cost.

While it is advisable to “register before use” to mitigate risks, companies may find it challenging to adhere strictly to conventional plans in dynamic markets where opportunities are fleeting. In such cases, adapting strategies to the specific circumstances becomes crucial, ensuring maximum support for clients’ business planning needs.

Trademark confirmation planning and actions against pre-emptive registration. Company D, an overseas manufacturer of cleaning products, initially registered trademark E overseas. When planning an expansion into the Chinese market, the company found a suspected pre-emptive trademark registration already at the preliminary approval notification stage.

After thoroughly studying the background and needs of company D, the author developed a trademark confirmation solution. Considering that the suspected pre-emptive registration would inevitably hinder the company’s trademark application, the author promptly filed an objection to forestall the rival registration and simultaneously applied to register trademark E in the relevant core and associated categories in China.

In addition, to accommodate the Chinese market and local consumer habits, the author proposed some Chinese versions of the trademark for company D to choose from and applied for Chinese trademark registration. The Chinese trademark registration was relatively smooth as the preliminary search was done in a selection of Chinese trademarks to avoid any identical or similar prior registrations.

However, the suspected pre-emptive registration hindered the application for the English version of trademark E. Since an opposition had been filed, the author was able to finally secure the approval for the registration of both the Chinese and English trademarks of company D in the core and associated categories, laying a trademark foundation for its continued expansion into the China market.

There are many trademark registration applications made every year in China, alongside a huge pool of ones already approved. The China National Intellectual Property Administration is gradually tightening its examination criteria for trademark applications, rendering the registration process unsatisfactory for applicants in many circumstances.

Nevertheless, a favourable result becomes more likely if we promptly change the plan to accommodate local conditions, conduct a stage-by-stage analysis, and then forecast the risks and outcomes.

Frank Liu is a partner and Jerry Huang is an associate at Shanghai Pacific Legal

Room 2709, 27/F, Plaza 66 II
1266 Nanjing Road West
Shanghai 200040, China
Tel: +86 21 6086 0199
Fax: +86 21 6086 0111
E-mail: Frank.Liu@shanghaipacificlegal.com
Jerry.Huang@shanghaipacificlegal.com
www.shanghaipacificlegal.com

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