Article 15 of Trademark Law of the People's Republic of
China (PRC) states:
1) When any agent or representative
registers, in its own name, the trade mark of a person for whom
it acts as the agent or representative without authorisation
from the owner, and the owner raises opposition, the trade mark
shall be rejected for registration and prohibited from use. The
so-called agent in this article includes dealers and
distributors who know about the trade mark in dispute due to
business activities.
2) Where an applied trade mark used on
identical or similar goods is identical or similar to an
unregistered trade mark used by a third party prior to the
filing date of the applied mark, and the applicant is fully
aware of the trade mark previously used by the said third party
due to a contractual agreement or business relationship or
other relationship other than those prescribed in the previous
clause, the applied trade mark should not be registered when
the third party raises opposition.
Circumstances in which to quote paragraph 1 and paragraph 2
in a dispute case
In the 2013 revision of PRC Trademark Law, paragraph 2 is
added into Article 15. In drafting the grounds of opposition,
invalidation or complaint, it is advisable to quote a specific
clause depending on the relationship between the two
parties.
Paragraph 1 regulates the agent or representative and the
principal. Usually, the agent refers to the distributor of the
principal. Paragraph 1 does not require the prior use of the
trade mark, or the reputation of the trade mark. The only
requirement is the special business relationship between the
parties, namely, distributor and principal. Since Article 15 is
usually considered the clause that protects unregistered trade
marks in China, if one expands the scope of relationship to any
kind of business relationship, such as buyer and seller,
advertising agency and OEM manufacturer, the protection of an
unregistered trade mark under Article 15 will be more
attractive to owners of unregistered trade marks than Article
13 and Article 32.
We think that paragraph 2 should apply where the business
relationship is other than distributor and principal. To apply
paragraph 2, the opponent should provide evidence to prove
prior use of the trade mark, which is not a requirement in
paragraph 1.
Proving the distribution relationship when no distribution
contract is entered
Continuous purchase orders in successive years, annual
purchase plans for a continuous period of time, email
communications during the negotiation procedure, sales
documents to reflect the real transactions and authorisation
letters to satisfy the requirement of Chinese authorities can
all count as sound evidence to prove the relationship.
Use of Article 15 before the distribution relationship
starts or after the distribution relationship terminates
Article 15 can be used in these scenarios. If Article 15
cannot apply before the contract of distribution is settled, it
will encourage negotiation out of bad faith, in particular,
aimed at obtaining information regarding the principal's trade
mark and other business information using the excuse of
distribution but without the true intention to fulfil the
contract. If the agent applies for the principal's unregistered
trade mark after the termination of the distribution contract,
in most cases, so long as the agent can still earn unjustified
benefit from the former business relationship with the
principal, Article 15 can still apply.
Proving ownership of the trade mark concerned
In a different way from other clauses such as Article 13 and
Article 32, territory is not a requirement in Article 15,
especially when paragraph 1 applies. To prove ownership, the
opponent can produce trade mark registration certificates in
any jurisdiction, usually other than in mainland China. If the
principal's trade mark is registered in China, then Article 30
or Article 31 applies rather than Article 15. If the mark in
dispute is not a registered mark in any jurisdiction, evidence
of prior use of the mark can be used to prove ownership.
Similarity of goods or services
In current practice, the China Trademark Office and the
courts tend to observe the criteria that the goods covered by
the trade mark in dispute should be the same or similar to
those provided by the opponent. The issue of how to judge
whether the goods or services are similar can be irritating for
opponents in China because of the sub-class system. The
opponent should prove the similarity in function or close
relationship between the goods and hence the likelihood of
confusion among the relevant public, if the opposed goods are
not considered similar to the goods provided by the opponent as
per the sub-class system in China.
Authorisation from the principal
Authorisation from the principal to register the trade mark
in the name of the agent should be explicit and definite. In
cases where the principal only authorises the agent to register
its trade mark, but does not state in whose name the trade mark
should be filed, the authorisation is not explicit and cannot
be taken as granting an entitlement to the agent to register
the mark in its own name.
In Miji Electronic Appliances (Shanghai) Co Ltd v TRAB
(third person Josef Schulte-Ufer), Miji argued that the
third person (the principal) knew the fact that the trade mark
in dispute was filed under the name of Miji (the distributor),
stating that the principal did not raise opposition in due time
but allowed the trade mark to mature into registration. Miji
argued that such behaviour from the principal should be taken
as an authorisation. However, the court took a different view.
Silent acquiescence should be explicitly prescribed in
legislation. The act of omission from the principal should not
be taken as authorising the distributor to register the trade
mark in its own name.
Article 15 can be a very useful ground for opposition and
invalidation when the conditions mentioned above are met.
Hopefully, it gives trade mark owners a useful tool against
trade mark pirating. To make the tool work, trade mark owners
should make an effort to preserve evidence when dealing with
distributors and other parties falling within the framework of
Article 15 as representatives.
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Lily Lei |
Miao Tian |
Liu Shen & Associates
10th Floor, Hanhai Plaza
(1+1 Plaza)
10, Caihefang Road,
Haidian District
China
Tel: +86-1068681616