Trial Docket: (2016) Jing 73 XingChu No. 1020
City of Beijing
[Headnotes]
The Beijing IP Court well explained in its judgment that Article 44.1 was not only applied to invalidation cases against marks registered in bad faith also to opposition procedures against trademark applications. According to the Court, the legislative intent of Article 44.1 is that it should be flexibly applied whenever it is necessary to deter bad faith trademark filings.
[Synopsis]
1st Round:
Plaintiff (Appellee): GU BAI TOOLS (SHANGHAI) CO., LTD. (later assigned the disputed trademark to AKRIS (HONG KONG) LIMITED)
Defendant: Trademark Review and Adjudication Board
Third Party (Appellant): AKRIS PRET-APORTER AG
2nd Round:
Plaintiff: Huitong Trading Development Limited (previously known as AKRIS (HONG KONG) LIMITED)
Defendant: Trademark Review and Adjudication Board
Third Party: AKRIS PRET-A-PORTER AG
AKRIS PRET-A-PORTER AG (AKRIS AG), a famous Swiss fashion company, is the owner of a series of trademarks using the word AKRIS, including the International Registration No.637645 "PUNTO AKRIS" in Class 25 with territorial extension to China as early as 1995.
In 2003, a Hong Kong company called FRANCE BENNY INTERNATIONAL ENTERPRISE GROUP CO., LIMITED (FRANCE BENNY) filed a trademark application for "A-K-R-I-S-" No. 3499689 in Class 25 covering goods "clothing, shoes, hats etc.", which was preliminarily approved by the China Trademark Office (CTMO) in January 2005. In 2014, the mark was assigned to a Shanghai company, GU BAI TOOLS (SHANGHAI) CO., LTD. (GU BAI TOOLS) and then again, in 2015, to another Hong Kong company, AKRIS (HONG KONG) LIMITED (AKRIS HONG KONG).
In 2005, AKRIS AG filed an opposition against the "A-K-R-I-S-" trademark based on its prior "PUNTO AKRIS" mark. In 2009, a natural person surnamed LIANG filed a non-use cancellation action against the PUNTO AKRIS mark, before the Trademark Office. AKRIS AG's opposition was dismissed by the Trademark Office on July 1, 2009, but the situation was later reversed by the Trademark Review and Adjudication Board (TRAB) in the opposition review procedure concluded on November 11, 2013. However, on March 3, 2014, AKRIS AG's PUNTO AKRIS mark was cancelled by the TRAB based on non-use. Therefore, when GU BAI TOOLS, the then owner of the opposed trademark, appealed before the Beijing First Intermediate Court against the TRAB's opposition review decision disapproving the trademark application, it was inevitable that AKRIS AG would lose: it had no more prior right to support its opposition.
In the second instance before the Beijing High Court, AKRIS AG had to change its litigation strategy by shifting the focus from its prior registration (Article 28 under the 2001 Trademark Law), which had ceased to exist, to the bad faith of GU BAI TOOLS (Article 44.1 under the 2013 Trademark Law). It was found that the three successive owners of the opposed mark, FRANCE BENNY, GU BAI TOOL and AKRIS HONG KONG, had intertwined shareholder relations and that besides the opposed mark, the original owner FRANCE BENNY had also filed a startling number of trademark applications for world famous brands including "EDEN PARK", "TODS", "LLADRO", "C.P.Company" and "MAPPIN & WEBB" etc.
On April 20, 2015, the Beijing High Court rendered a decision upholding the judgment of first instance rejecting AKRIS AG's opposition and referred the case back to the TRAB, for a new decision to be made. However, the Beijing High Court specifically instructed the TRAB to examine, in its new decision, the above mentioned bad-faith facts.
On October 28, 2015, the TRAB made a re-examination decision affirming that FRANCE BENNY's filing of many other reputed trademarks, without the intention of use, caused damage to the trademark registration order and was in contradiction with the bona fide principle. Therefore, the TRAB maintained its initial decision to refuse the registration of the "A-K-R-I-S-" trademark, but this time on the basis of Article 44.1 ("trademark registration acquired by fraud or any other unfair means") of the 2013 Trademark Law.
In 2016, AKRIS HONG KONG appealed against the TRAB's new decision before the Beijing IP Court claiming that the evidence was insufficient to prove FRANCE BENNY's unfair filing of those trademarks and that the application of Article 44.1 was erroneous because that article only deals with registered trademarks, and not with trademark applications.
During the appeal before the Beijing IP Court, AKRIS AG initiated another legal action in Hong Kong, successfully forcing, on February 13, 2017, AKRIS HONG KONG to change its misleading trade name from AKRIS (HONG KONG) LIMITED to HUITONG TRADING DEVELOPMENT LIMITED. On April 19, 2017, the Beijing IP Court maintained the TRAB's opposition decision of disapproval. The "A-K-RI- S-" case was selected as one of the 18 exemplary cases concerning bad faith trademark filing, released by the Beijing IP Court, two days before the World IP Day, on April 24, 2017.
Wanhuida Peksung represented AKRIS AG before the Beijing High Court and Beijing IP Court.
[Judge's Comment]
In recent years, the Chinese authorities and courts have been ramping up efforts in fighting preemptive trademark filings.
In the above case, the TRAB made two decisions in succession to refuse the registration of the Opposed Mark, one based on the relative ground of AKRIS AG's prior registration of "PUNTO AKRIS" and one on the absolute ground of bad faith when the prior registration has ceased to exist.
The Beijing High Court took full account of AKRIS AG's new evidence and new arguments concerning the bad faith. However, since these facts and arguments had not been raised and discussed before the TRAB in the opposition procedure, the Court was not at liberty to make any adjudication on them, in its decision. However, the Court found a way to by-pass this procedural obstacle by "neutrally" directing the TRAB to pay attention to these points in its new decision.
In the new appeal against the TRAB decision, the Beijing IP Court well explained in its judgment that Article 44.1 not only applied to invalidation cases against marks registered in bad faith also to opposition procedures against trademark applications. According to the Court, the legislative intent of Article 44.1 is that it should be flexibly applied whenever it is necessary to deter bad faith trademark filings.
This 12-year battle, which lasted since 2005, resulted in a victory for AKRIS AG, but the battle does not seem to be over yet. Another company named AKRIS (SHANGHAI) APPAREL CO., LTD (AKRIS SHANGHAI), which was established in June 2016, filed in February 2017, some new A-K-RI-S- trademarks that are still pending for examination before the China Trademark Office. The bright side is that AKRIS AG's trademark applications predate most of them.