Resolving TM disputes in overseas jurisdictions

As more Chinese enterprises opt to register their trademarks overseas, they are finding that the process isn’t always smooth. So, what are some of the solutions to opposition or disputes to trademarks when companies venture abroad?

When the overseas trademarks of Chinese enterprises encounter opposition from others, blind and brute confrontation is not recommended. Instead, we should analyse and investigate the situation to come up with a plan. If the opposition is from just one country, we may start by sorting out the reasons for the opposition.

If the opponent makes the case based on a similarity between the trademark under its name and the disputed trademark, we may first judge the similarity between these trademarks and whether the opponent’s trademark is extensively used in the country where the dispute arose. Extensive use of trademark plays a vital role in cases of trademark disputes or invalidation in Europe and the US, among others. If there was extensive use, even with only limited similarity between the trademarks, the examiner is likely to consider that the co-existence of the two trademarks could easily lead to confusion and misunderstanding among consumers.

In US cases of trademark disputes, the opposed party is required to elaborate on the reasons why the parties concerned believe there is no danger of confusion and clarify any measures taken by all parties to avoid such confusion. If the opposed trademark is not used in the US, it would be impossible to list the reasons why it will not lead to confusion, thus leading to an unfavorable result. In order to protect the rights of its own trademark, Apple raised disputes against a great number of round, fruit-related trademarks in the US.

After researching judgments on Apple’s disputes against “fruit-related trademarks” in the US, the author found that 28 of them were under negotiation, and the remaining 22 were determined by the Trademark Trial and Appeal Board in favour of Apple (19 of which were not responded to by the opposed parties, with another three withdrawn).

Based on the above-mentioned cases, although there are some differences between them and the Apple logo, due to the high-profile nature of Apple’s trademark in the US, if the opposed party is unable to prove that the co-existence of their trademarks won’t lead to confusion, its chance of a successful defence would be extremely low, which is why most opposed parties chose to resolve disputes via negotiation.

Therefore, in cases of high similarity between the two trademarks, or if the similarity is not high but the trademark cited by the opponent is widely used in the target country, the opposed party may choose to waive the defence and negotiate with the opponent on co-existence.

If the dispute involves the same opponent and multiple jurisdictions, the cost of mounting a defence can be high. We may therefore engage in a global negotiation, for which we have the following suggestions:

• • Know your enemy. Start by conducting a comprehensive investigation of the trademarks under the name of the opponent, including trademark registration in the target country and elsewhere. At the same time, conduct a simple investigation on the opponent and ascertain its main business scope. This is to better understand its position and considerations when raising the dispute, so as to grasp the next step of the plan.
  • Negotiate with precision according to the investigation results. If the disputed trademark is a long-term project and has not been put into use overseas, there would be enough time for negotiation. We may selectively raise disputes over or invalidate the opponent’s trademark in other countries according to the opponent’s trademark registration, so as to increase our bargaining power and strive for as much of a foothold as possible. However, if the disputed trademark has been put into use overseas, we must resolve the dispute in the shortest time possible (challenging the opponent’s trademark in multiple countries can cost a great deal). Other schemes may be considered, such as comparing the main business scopes of the two companies for differences. If there is sufficient difference in the scope of business as well as the trademark, we may achieve co-existence by limiting the trademark to designated goods or services, with the purpose of differentiating it from the trademark of the opponent.
  • Make timely adjustments to the negotiation plan, such as dividing the process by region. In this manner, we may strive for the greatest benefit in respect of the more important countries or those where the trademark has been used, and make certain concessions as to countries where the trademark is registered for defence or where the trademark is part of a long-term plan and not yet been put into use. When negotiating, explain the situation with well-founded and reasonable facts, and take the initiative when necessary.
  • If the negotiations break down, based on the situation, prepare a defence in the country where the dispute was raised, or make a new trademark application. The latter gives us the opportunity to change the standard sample of the trademark or avoid conflicting goods or services.
  • If negotiations progress slowly and the other party delays in giving feedback, we may take action against the opponent’s trademark for stimulating effects. Moreover, as most negotiations take place alongside oppositions in several countries at the same time, even if the other party fails to give feedback, we must respond as scheduled or postpone the response to guarantee our own trademark rights.

He Wei is the deputy head of the second trademark department and a trademark attorney at Sanyou Intellectual Property Agency