China trademark takedown
China trademark takedowns

China’s lack of an affirmative trademark use requirement allows trademark owners to register marks in more classes and covering more products and services than what they actually sell. Starbucks is a prime example of a company that has taken full advantage of this strategy by (for example) registering “STARBUCKS” as a trademark in all 45 classes of goods and services.

The benefits of registering in a whole host of China trademark classes really comes into play when dealing with infringing goods on Alibaba and other e-commerce platforms. Many of our clients have found that infringement starts with their core lineup of products but quickly moves to things they haven’t released and perhaps never will. Any consumer product is fair game for knockoff artists. If they can imagine it, or more precisely if they can imagine someone buying it, it will turn up on Alibaba.

Though Alibaba is responsive when you request a takedown for a product covered by your trademark registration, they often will decline to take action if the product is outside the scope of your registration. So if an enterprising Chinese merchant began selling Game of Thrones brand deodorant on Alibaba, HBO might only succeed with a takedown request if it had already registered a trademark covering deodorant.

Registering your trademark is the only realistic way to gain trademark protection in China, and that protection is limited by the classes and subclasses of goods and services covered by your registration. If you want protection for other products, you need to register in the appropriate classes and subclasses to cover those products.

Registering in all 45 classes is not a realistic strategy for most company. But when devising your IP strategy for China, you should think about not just the products and services you intend to sell in China, but also the ones you don’t want someone else to sell under your name.

China trademark registrationUnlike the United States, China does not have an affirmative requirement to prove that a trademark is being used in commerce. You do not have to prove use for a trademark application to proceed to registration, and once a trademark is registered you do not have to prove you are still using it to maintain or renew the registration.

Foreign companies have come to realize that China’s lack of a use requirement is a double-edged sword. On the one hand, it allows trademark squatters to register marks for a wide range of products and services they have no intention of ever providing. On the other hand, it allows “real” trademark owners to register their marks to cover a much wider range of products and services than would be allowed in most other countries. As we have noted before, Starbucks employs this strategy better than anyone: it has registered “STARBUCKS” as a trademark in all 45 classes of goods and services.

However, China will require evidence of use if a trademark registration is challenged for non-use. The basic rule is that once a mark has been registered for three years, it is vulnerable to a non-use cancellation. At that point, if a third party files a non-use cancellation, the owner has two months to provide evidence of use within the past three years.

If you are actively marketing your goods or services in China, then it should be fairly easy to provide evidence of use. Your use of the trademark in question on packages, containers, labels, manuals, advertisements, product displays, signage or at exhibitions are all likely to be sufficient. In general, original documents are required, but when a product has a lot of ephemera this is a low bar.

Where it gets difficult is when the only use of the trademark in question is on a product manufactured solely for export. It is not completely resolved in China whether such use constitutes either (1) use in China with respect to a trademark infringement action or (2) use in China with respect to a non-use cancellation. But in our experience, the Chinese Trademark Office (CTMO) will generally accept manufacturing in China, even if solely for export, as sufficient to defeat a non-use cancellation.

But you still need original documentary evidence!

It is all too common for foreign companies to order products from their China manufacturer for years on end using English-only documents that never identify the trademark on the products, and often never even identify the product with sufficient specificity. That makes it almost impossible to prove use to the CTMO’s satisfaction. What you want is documents that are in Chinese and clearly demonstrate your use of the mark in China on the products covered by your trademark registration: documents like invoices, shipping documents, quality inspections, and customs export declarations. Photographs are helpful to provide context but, standing alone, are usually insufficient to demonstrate use.

Typically, most (or all) of the documents that can prove trademark use for export-only products are held by the factory. So while you are still on good terms with your factory, you should make sure to keep a complete, regularly updated set of documents for each of your China trademark registrations. If things go south with your supplier, you don’t want your trademarks to be at risk too.

China TrademarksTwo recent court decisions from China have upheld the trademark rights of Donald Trump to the word “TRUMP” and Michael Jordan to the word “乔丹” (the Chinese transliteration of the name “Jordan”). These decisions have been seen as indications that famous people’s names now have more protection in China. Whether this is a trend or just an anomaly remains to be seen, but it’s worth noting that these long-running controversies have been over shortened, arguably ambiguous versions of celebrities’ names. When a disputed trademark registration is for a celebrity’s full name, the dispute is almost always resolved quickly, and in the celebrity’s favor.

Donald Trump, Michael Jordan, and other famous people have already succeeded in numerous such actions. For example, Dong Wei, the same trademark squatter whose “TRUMP” trademark was recently invalidated by Donald Trump, had also filed multiple trademark applications for “DONALD TRUMP” back in 2009. Once the applications proceeded to publication, Donald Trump – @realDonaldTrump, that is – opposed them and was successful the first time. These cases simply don’t get as much publicity because the outcome is not controversial.

China, like many civil law countries, has long given deference to people protecting their full names as trademarks. Formally, the protection is accorded under Article 32 of the Trademark Law, which holds that a “trademark application shall neither infringe upon another party’s prior existing rights, nor be an improper means to register a trademark that is already in use by another party and enjoys substantial influence.” The examination guidelines used by the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) further elaborate that prior existing rights include, among other things, name rights.

These guidelines sound great but in practice are applied with the same degree of subjectivity as everything else at the CTMO. It’s unclear how famous you have to be to be deemed to have “name rights” in China for a given field, or what sort of evidence is sufficient. However, it is clear that the standard of proof is much lower than what is necessary to show that an ordinary mark is well known.

One final point: in practice, a famous person can only invoke his or her name rights during a trademark opposition or invalidation proceeding. The CTMO won’t make these determinations during the examination phase. It’s up to every celebrity to police the use of his or her name in China.

China trademarksIn a surprising decision the Supreme People’s Court of China gave Michael Jordan a partial victory in his long-running trademark battle with Qiaodan Sports. As I wrote last year, Jordan has been trying for years to cancel trademarks he alleges Qiaodan Sports registered in bad faith, including the marks “乔丹” (the Chinese-language version of “Jordan”) and “Qiaodan” (the pinyin version of 乔丹). Previously, Jordan has lost at every step of the way; the Trademark Review and Adjudication Board and various Chinese courts have all rejected Jordan’s argument that “乔丹” was already well-known and associated with him personally at the time Qiaodan Sports filed its trademarks.

But the highest court in China today ruled that in fact “乔丹” was well-known and associated with Michael Jordan personally, and that therefore Qiaodan Sports’ trademark registrations for “乔丹” should be invalidated. I have not seen the decision yet but from what has been reported in the Chinese media, the decision does not include any rationale; it just announces the outcome, leaving us to draw our own conclusions.

It’s tempting to see this decision as a harbinger of better times for foreign companies seeking to protect their brand in China. Particularly in light of the recent decision in favor of Donald Trump that similarly recognized the word “Trump” as being well-known. But I would be cautious about taking that view, for several reasons.

First, this decision and the Trump decision were for trademarks that were associated with a person’s name. For some time now, Chinese courts have been more likely to protect a trademark that is a person’s name (versus a random company name). Even a few years ago, Jordan would have had no trouble invalidating a trademark squatter’s application for “Michael Jordan.”

Second, Jordan only won a partial victory. Although the court found “乔丹” was well known and associated with Michael Jordan, it also found that “Qiaodan” was not. It’s difficult to rationalize the distinction. Presumably the court determined that (1) Jordan is too common a name to register as a trademark and “Qiaodan” is the standard pinyin transliteration for that name, and/or (2) any number of Chinese characters could be put together to form “Qiaodan” and therefore the connection was too tenuous. But these arguments are rather flimsy; if you look in a Chinese dictionary, the only word that the pinyin “Qiaodan” resolves to is “乔丹,” which has a single meaning: the name “Jordan.” Why grant protection to “乔丹” but not “Qiaodan”?

Third, this decision was decided on narrow grounds. Though the court ultimately accepted the argument that “乔丹” was well known and associated with Michael Jordan, it rejected his argument that Qiaodan’s registrations were “detrimental to socialist morals or customs, or having other unhealthy influences” or acquired by “improper means.”

Fourth, this decision is anomalous under current China trademark practice. The vast majority of Chinese trademark decisions are still coming out in favor of trademark squatters, and it is all but impossible to prove that a mark filed by a trademark squatter was well-known in China at the time of the application. It’s hard not to share the cynical view that something else is going on below the surface here. But maybe it’s as simple as that the case was heard in front of a sympathetic chief judge.

The Supreme People’s Court’s decision is final and cannot be appealed further. So while Qiaodan Sports can no longer use “乔丹” on its goods, it can continue using “Qiaodan” for as long as it wants, without threat of further interference. Jordan may be claiming victory in the press, but he can’t be happy that Qiaodan Sports will get to use “his” name forever.

Because this decision was so unexpected, the immediate consequence is to introduce even more uncertainty to the trademark registration process. Probably many more owners of allegedly “well-known” marks will be encouraged to begin invalidation proceedings in China. I can’t say I blame them, but it’s not much of a strategy. The only realistic way to establish trademark rights in China is to file a trademark application in China.

China Trade Dress Law
Do you know the store? Is it Hong Kong or New York?

Close your eyes, and imagine that when you open them you have been magically transported to another country and you are inside a Starbucks. How do you know you’re in a Starbucks? Even if you’re not this guy, you could probably tell where you are without seeing the word “Starbucks” or the mermaid logo. Would you even know that you were in a different country? Probably not – and that’s exactly how Starbucks wants it. A Starbucks coffee shop has a certain look and feel, a “know it when you see it” gestalt that is easily and immediately identifiable.

The look and feel of products or services – including product packaging and design, the GUI of a website or software application, and the layout and design of a store – generally fall under the rubric of “trade dress.” In the United States, trade dress is considered a symbol or device under trademark law, and can be registered and enforced just like any other trademark. And you better believe Starbucks enforces its trade dress rights.

In China, trade dress is not well defined and not given specific protection as such. Conceptually, trade dress in China incorporates IP elements that don’t fit neatly under the rubric of trademark, copyright, or patent, and to the extent trade dress is protected in China, it is via China’s Anti-Unfair Competition Law (AUCL). However, insofar as it applies to trade dress, the AUCL is not particularly strong, only applies to “famous” products and services, and doesn’t have a mechanism for registration. In other words, you can only enforce trade dress rights by taking administrative or legal action, and if you don’t have a famous product or service you probably shouldn’t bother.

However, a couple recent judicial decisions in China provide a glimmer of hope. In 2015, Stihl, a leading manufacturer of power tools, was deemed to have trade dress protection for its distinctive orange-and-grey color scheme. (A Hangzhou machinery company had made exact copies of several Stihl chainsaws, including the color scheme but excluding the “Stihl” trademark.) And earlier this year, Activision Blizzard was awarded trade dress protection for the look and feel of World of Warcraft, including such elements as character names and designs, equipment icons, maps, and game interface. (An online Chinese game called Everyone WarCraft: War of Draenor had copied much of World of Warcraft’s look and feel.)

A draft amendment to the AUCL was published on February 25, 2016. Most of the commentary to date has focused on the changes that amendment would make to the antitrust and anti-monopoly language, but it also could expand the scope of what could be covered under trade dress. It appears that the trend in China is toward more trade dress protection.

Even with these positive steps, trade dress protection in China should be seen as complementary to the registrable forms of IP protection like trademarks, copyrights, and patents. You may not be able to register the layout of your China retail store, but you can register trademarks in China for color combinations (as Stihl eventually did) and character names and you can register copyrights for product labels, video game characters, icons, and maps and you can register design patents for the outward appearance of products.

Bottom Line: Trade dress protection exists in China, but only sort of. Relying on China trade dress protections is not advised. The way to protect your intellectual property in and from China is by registering trademarks, copyrights and patents there.

China trademark registrationSusan Finder’s estimable Supreme People’s Court Monitor wrote yesterday about a fascinating Donald Trump trademark matter in China.

Back in December 7, 2006, Trump filed a China trademark application for the word mark “TRUMP” in Class 37, covering services such as building construction, repair, and installation services. Unfortunately for Trump, on November 24, 2006, an individual named Dong Wei (董伟) had filed his own application for “TRUMP” in class 37 covering services such as building construction supervision, construction, demolition, road building, mining, and drilling.

Trump’s application was rejected by the Chinese Trademark Office (CTMO) with respect to the goods similar to those on Dong Wei’s application. Trump then appealed to the Trademark Review and Adjudication Board (TRAB) and lost. He then appealed to the Beijing Intermediate People’s Court and lost again. He then appealed to the Beijing Higher People’s Court, and in May 2015 he lost yet again. Having exhausted his options in court, Trump made a decision familiar to fans of reality television: he fired his trademark attorneys.

Though Trump’s attorneys had contended that “TRUMP” was a well-known mark, the Beijing Higher People’s Court did not even address this argument. It was a simple decision based on a simple principle: Dong Wei filed his application first, and Dong Wei’s trademark was still valid.

But that’s not the end of the story. At the same time as he appealed the rejection of his application, Trump pursued a parallel strategy seeking to invalidate Dong Wei’s trademark. As soon as Dong Wei’s trademark application was published in the Trademark Gazette, Trump filed an opposition. That opposition was rejected. Trump then filed an appeal to the rejection of his opposition. That appeal was denied by the TRAB in April 2015. (It appears likely that the Beijing Higher People’s Court was waiting for the results of this appeal before issuing their decision.)

At this point, Trump had two main options if he still wanted to contest Dong Wei’s mark. He could appeal the TRAB’s decision (with regard to his opposition to Dong Wei’s mark) to the Beijing IP Court. Or he could accept the results of the TRAB’s decision, let Dong Wei’s mark proceed to registration, and then attempt to invalidate Dong Wei’s registered trademark. Trump went with the latter option, which is an odd choice because he would be making the same arguments before the same appellate board.

And then something surprising happened. The TRAB ruled in Trump’s favor, and invalidated Dong Wei’s mark with respect to everything but mining and drilling. The invalidation decision is not publicly available, so we can only extrapolate from the few facts that are known. The TRAB published its invalidation result in September 2016, which means that the decision itself was probably made in June or July 2016. Trump was apparently able to show, at long last, that “TRUMP” was a well-known mark, but only with respect to the more standard real estate and construction services. Why now? Was Trump able to provide new evidence showing that the “TRUMP” name was well-known in 2006? Without knowing more, this decision seems at odds with the usual standards regarding well-known marks in China. It is hard to escape the feeling that the media attention given to Trump in China over the past few months affected the TRAB’s decision.

Hedging his bets even further, Trump had filed a new, separate trademark application in 2014 for similar services as those covered in Dong Wei’s mark. This 2014 application effectively took the place of Trump’s 2006 application. (Trump’s attorneys presumably thought — correctly — that the 2006 application might be rejected before the invalidation proceeding for Dong Wei’s mark was complete, and wanted to have another trademark ready to go.) Now, with Dong Wei’s mark invalidated, Trump’s new mark has been published in the Trademark Gazette. Unless someone files an opposition, the mark will proceed to registration in 3 months.

It would have been a different situation if Dong Wei filed his application today. First, Trump is undeniably well-known in China. Second, China has an informal rule against registering the names of American presidents as trademarks: a quick review of the CTMO database indicates that applications for 克林顿 (the official Chinese translation of “Clinton”), Clinton, Obama, 奥巴马 (the official Chinese translation of “Obama”), and even 希拉里 (the official Chinese translation of “Hillary”) have been routinely rejected by the CTMO. The difference with Trump is that he was a businessman for years before turning to politics.

As Mark Cohen’s China IPR blog has pointed out, Dong Wei is hardly the only person in China to file TRUMP-related trademark applications in China. A quick CTMO search reveals dozens of applications for “TRUMP,” “TRUMP TOWER,” “TRUMP PLAZA,” and so forth, as well as innumerable Chinese variations. Some of those have been filed by Donald Trump himself, but he’s fighting a rearguard action. If he cared about protecting his name – and his willingness to litigate over these issues shows that he does – he should have taken the Starbucks approach and filed applications in every class covering every subclass. Maybe he’ll do that now.

It will be interesting to see what the CTMO and TRAB do with subsequent oppositions and invalidation proceedings brought by Trump. I can only assume such proceedings will be legion. Even if most (or all) of the third-party “TRUMP” trademarks are invalidated due to Trump’s status as the president-elect, think of all the time, effort, and money that Trump expended to get this far.

Once again, the moral of this China trademark story is: register your trademark now, before someone else does it for you. Unless you plan on being elected President of the United States.

China Attorneys

Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a super fast general answer and, when it is easy to do so, a link or two to a blog post that may provide some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

One question we get a fair amount is: “Alibaba [or some other Chinese e-commerce site] is selling counterfeit versions of my product. Will you help me sue them in China?”

We generally respond as follows: The way to remove infringing goods on a Chinese e-commerce site is to contact the site directly. Most e-commerce sites will not lift a finger unless you have already registered your IP in China. If you file a lawsuit in China against a site without first asking the site to take down the infringing listing and registering your IP, the judge will tell you to take a hike.

Filing suit in the U.S. hasn’t been a successful route, either. Kering Group (the parent company of luxury brands Gucci, Yves St. Laurent, Balenciaga, and others) filed suit against Alibaba in 2015. The suit is still wending its way through federal court, but some of the more serious charges have already been dismissed.

Registering your copyrights in ChinaChina copyright lawyers is an essential part of any IP protection plan. But when you’re trying to enforce your rights, how do you prove what you have registered? A copyright registration certificate merely identifies a creative work by its name and the type of work.

If you have registered a work that is typically identified by name (e.g., a movie, a song, or a book), a copyright registration certificate may be sufficient for a takedown request on e-commerce sites. But if you’ve registered something that is less identifiable by name (e.g., a doll, a graphic design, or a work of art), a certificate alone probably won’t be enough.

Anti-infringement teams are not going to conduct independent research on your products or Google your company. All they care about are government-issued documents showing IP ownership. Consider how straightforward the infringement analysis is when based on a trademark certificate: (1) does the allegedly infringing item bear the mark listed on the certificate, and (2) is the item similar to the goods listed on the certificate? You need to make it that easy when you’re requesting action based on a copyright infringement.

Happily, there is a solution.

What some e-commerce sites request – and what China Customs requires – is an “authenticated search result” for each copyright at issue. This search result, duly stamped by the Copyright Protection Center of China (CPCC), includes both the copyright registration certificate and images of the creative work. You can’t request it until your copyright has been registered, but for certain works — especially works that are easily identified upon visual inspection but not by name — it’s essential.

China copyrightCopyright is an essential part of any substantive IP protection plan in China, but many companies fail to take an extremely important step: registering their copyrights in China. One of the most common misconceptions our China lawyers frequently hear is that copyright registration in China is optional, because you do not have to file anything to have a valid copyright in China.

Like so many China misconceptions, this one has an element of truth to it. As a signatory to the Berne Convention, China has the same basic definition of what is protected under copyright as the 171 other Convention parties: an original creative work that exists in a fixed medium. A “creative work” could be anything from a video game, song, or toy to a database, map, or product design. A songwriter in Nashville, a programmer in Auckland, a furniture designer in Helsinki: all of their creative works are protected by copyright at the time they complete the work in question, and that copyright is just as valid in China as it is in the U.S., New Zealand, and Finland. But there’s a big difference between having a valid copyright in China and having an enforceable copyright in China.

In most situations, the key issue is one of proof. A copyright registration in China is presumptive evidence of ownership, and in some situations it’s the only evidence that is acceptable. Whether you’re trying to take down an infringing video on Youku Tudou or an infringing photograph of your product on Alibaba, have counterfeit dolls seized at Customs, or sue a publisher who is selling your book without permission, a certificate issued by the Copyright Protection Centre of China (CPCC) is the easiest and most efficient way to enforce your rights. And copyright registration is almost always a prerequisite to getting royalty payments from Chinese entities that have licensed copyrighted material.

Meanwhile, if you are trying to prove ownership of a creative work and you don’t have a Chinese copyright registration, it could take weeks or even months – and that assumes a clear, well-documented chain of title. If you’re at the point where you need to enforce a copyright to stop infringement, it’s almost certainly going to be time-sensitive.

China’s copyright registration process is fairly straightforward, and it does not involve substantive examination at the time of registration, but it usually takes a couple months to receive a copyright certificate. In our experience, when our clients have China copyright certificates we usually secure takedowns of infringing materials relatively quickly and easily. But without a copyright certificate, takedowns take considerably longer and sometimes they do not happen at all.

Don’t get caught flat-footed. If you have copyrightable IP that you want to protect in China, register it with the CPCC. Now.

 

China trademark registrationClients often ask us whether they need to register their company name as a trademark in China. As I am the product of an American law school, it’s hard to resist the gravitational pull of responding with “it depends,” but in this instance I have little difficulty. English-language company names have virtually no protection in China. If you don’t want someone else to use your company name in China, you should register it as a trademark.

It’s true that in order to form a business entity in China (e.g., a joint venture, WFOE, or representative office), you must select both a Chinese name and an English name for the entity. But only the Chinese name has any legal relevance. That name needs to be approved by the State Administration of Industry and Commerce (SAIC) and cannot conflict with preexisting company names. The English name, on the other hand, is just a trade name that appears on your company chop. It does not need to be approved, and you can change it at will. It has the same amount of protection of any trade name used without registration: virtually none.

Even your Chinese-language name won’t have any protection as a trademark. Although company formations and trademark registrations are both under the umbrella of the State Administration of Industry and Commerce (SAIC), the departments do not have any meaningful cooperation. A third party could register your entity’s Chinese name as a trademark, and you could register a third party’s trademark as your company name. But because a company’s legal name in China often has little in common with the company’s trade name, most people only care about the latter.

If you haven’t formed a business entity in China, then you have no presence other than the names you use on your products or services. For some companies, like Coca-Cola and McDonald’s, the company name is the brand, and they very much want to protect that name. For other companies, like National Amusements (the parent company of Viacom and CBS) and Yum! Brands (the parent company of KFC, Taco Bell, and Pizza Hut), the company name is not the brand, and they are perhaps not as concerned about protecting it. You’ll have to make that call for yourself.

China has a well-publicized exception that affords protection to “well-known” trademarks even if they’re not registered in China. But as we have written numerous times, this exception is almost never available: unless your company is named Coca-Cola or Nike, you are not well-known. Companies often push back against this and argue that they are well-known in their country among people who know their industry, and that makes their company name well-known. But this is not the standard. For a mark to be considered well-known in China, the mark must be generally known throughout China. Take a big American toy company like Hasbro or Mattel. Most Americans have heard of those companies, even if they don’t follow the toy and game business. But if we stopped 100 people walking down the street in Nanjing, how many do you think would be able to correctly identify either company?

The only protection for your English-language company name in China comes from registering it as a trademark with the Chinese Trademark Office. Relying on any other method is just magical thinking.