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AFD Case Study – Proper Application of Articles 4 & 7 of Trademark Law in Opposition Proceedings

According to the Trademark Law of China, the main legal bases for right holders to file a trademark opposition include Article 15 (agent-client relationship, other business relationships), Article 30 (prior registration), Article 31 (prior application), and Article 32 (prior rights). Although Article 4 (malicious application not intended for use) and Article 7 (principle of good faith) of the Trademark Law were not the main legal bases for filing a trademark opposition, if rights holders can prove (for example, from the aspects of the opposed party’s business scale, involved industry, the number and characteristics of their trademarks, and assignments of their trademarks) that the opposed party has subjective malice of copying, imitating, plagiarize others’ trademarks which have gained certain reputation and that for the purpose of gaining large amounts of illegal profits, the opposed party has hoarded a great number of trademarks which are much beyond the amount actually needed for their normal business operations, then proper application of the provisions of Articles 4 and 7 may play an important role in increasing the chance of success in opposition proceedings and has become a useful tool in the oppositions. Through the following case, we will demonstrate the importance of properly applying the provisions of Articles 4 and 7 of the Trademark Law in opposition proceedings.
A renowned British perfume manufacturer (hereinafter referred to as “client") had a very high visibility in the global perfume market. The client found that a trademark (hereinafter referred to as "opposed trademark") that had been preliminarily approved for registration violated their exclusive right to use an earlier registered trademark, and thus consulted our firm about how to defend their right.

After checking and comparing the two trademarks, we provided the following professional advice to the client:
(1) according to China’s Classification of Similar Goods and Services, the designated goods of the opposed trademark and the client’s registered trademark (hereinafter referred to as “cited mark") were the same or similar; according to China’s Trademark Examination and Trial Standards, the opposed trademark and the cited trademark can be deemed similar, so the opposed trademark constituted a similar trademark to the cited trademark on similar goods, which is not in conformity with Article 30 of the Trademark Law;
(2) The original applicant of the opposed trademark (i.e., the original opposed party in this case) was a natural person, but filed more than 600 trademark applications with the Trademark Office, which were beyond the actual amount needed for normal business operations and were not intended for actual use; many of such trademark applications were intended for preemptive trademark registration of well-known foreign brands and the names of famous persons, so the original opposed party had subjective malice of copying and plagiarizing others’ well-known brands; the original opposed party transferred a large number of trademarks to the current applicant (i.e., the current opposed party in this case), which showed his motive of hoarding trademarks for gaining large amounts of illegal profits; therefore, both the original opposed party and the current opposed party violated the provisions of Articles 4 and 7 of the Trademark Law.

The client accepted our professional advice and filed a trademark opposition within the prescribed time limit with the Trademark Office as we suggested. In the end, the Trademark Office fully supported our above opinions and made a decision not to approve the registration of the opposed trademark.

On behalf of the client, our attorneys assisted with all decision making and attended the whole proceedings of the above case.

In trademark opposition practice, the provisions of Article 4 and Article 7 are very useful and helpful in increasing the chance of success in opposition proceedings. Especially, when right holders file a trademark opposition using Article 32 (prior rights) of the Trademark Law as the legal basis, if the right holders do not pay attention to collecting corresponding evidence in their business operations, they will probably lose in the opposition proceedings because of lack of evidence. In such case, it will be very helpful to the right holders if they can properly apply the provisions of Articles 4 and 7 of the Trademark Law.

We hope the above analysis may help right holders obtain a favorable result in trademark opposition proceedings.

Should you have any questions about trademark protection, please feel free to contact us.

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