To kick start 2023, we have gathered our firm’s top 5 intellectual
property cases in 2022, and we would like to share with you our successful cases
and the hottest issues in the previous year.
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1.Landmark Unfair Competition
Case
We represent one of the world’s oldest luxury cosmetics
and skincare houses against its major competitor in a major unfair competition
case in Mainland China, where we have successfully stopped the competitor from
using similar visual imaginary in the promotional materials in their competing
products. The counterparty had adopted promotional materials consisting of design
elements in arrangements that are very similar to our client’s promotional
materials used on its own iconic product of the same kind, which has been
adored by the Chinese consumers over the last decade.
The Anti-Unfair Competition Law specifically provides
that the act of copying of product names, product designs or product packaging
with certain degree of influence in Mainland China, which causes confusion to
the public, constitutes unfair competition. However, this case concerns the
copying of promotional materials, which do not fall within the situations
expressly stipulated in the relevant Article 6. We strategically relied on
Article 2 of the Law, though even more abstract, is a general provision
prohibiting all acts that may adversely affect interests of others and provided
extra flexibility to the Court to rule in our favour.
Since the claim
brought under this Law is not based on any registered rights, in practice, it
is even more onerous on the petitioner to prove that they do have a prior right
which forms the legal basis to invoke protection under the said Law. As such, one
of the keys to establish and prevail this claim was extensive evidence
collection to establish the fame, not only for the client’s brand, but more
specifically on our client’s promotional materials and elements thereof. To
this end, we assisted our client in conducting national library searches and
extensive internet searches to collect evidence of prior use and reputation. We
also advised our client to have its graphic designer and creative director to
give testimonies in relation to the creative process and uniqueness of our
client’s promotional materials, which played an important role in showing the
originality of our client’s promotional materials.
The Shanghai
Pudong People’s Court held that the counterparty’s copying of our client’s
promotional materials constituted unfair competition. The Court awarded
monetary compensations to our client and ordered the counterparty to publish
public announcements to clear the negative impact. We have successfully
protected the uniqueness of our client’s visual imagery which has become core
to the product’s commercial identity through years of promotional materials,
other than by use of the trademark, and prevented other parties from using
similar visuals to promote competing products.
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2. Warding
Off Fraudulent Assignment of Trademarks by Cunning Swindler
A European brand
got into a dire situation in which its house marks in China were fraudulently
assigned to another party. The counterparty is an individual who previously negotiated
an acquisition with client’s China arm. After the deal fell through due to
numerous breaches by the counterparty, the counterparty forged our client’s
signature on some assignment documents and sought to fraudulently transfer more
than 80 of our client’s registered trademarks in Mainland China, including its
house marks, to her own name. The counterparty also relied on dubious
authorization letters with fraudulent signatures to try to open stores in major
e-commerce platforms in China with the client’s brand, and filed various marks
copying the client’s.
We devised and
executed strategies to successfully stop the counterparty’s fraudulent transfer
in China via administrative litigations, criminal actions, and administrative measures
before the CNIPA. We filed multiple administrative litigation suits before the
Beijing Intellectual Property Court to nullify the assignments. We reported the
fraud to the police to exert further pressure on the counterparty. We issued
formal complaint with the CNIPA exposing the counterparty’s fraud and our
actions taken against them. Eventually, we successfully suspended the approval of
the unauthorized assignments of our client’s marks. We also stopped the
counterparty from opening stores in e-commerce platforms and their new
applications copying client’s marks.
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3. Knocking
out Cross-jurisdictional Infringer in Mainland China and Hong Kong
We identified a shadow company incorporated in Hong
Kong adopting a name that fully incorporates our client’s English and Chinese name,
and filed more than 20 trademarks in Mainland China that are similar to the
client’s house mark in the main class 3 and other relevant classes to
perpetuate their free-riding acts. The shadow company had been selling lipsticks
that knockoff our client’s iconic lipstick line on Chinese e-commerce platforms.
In fact, it is common for infringers to incorporate shadow companies in Hong Kong and adopt names
(in both English and Chinese) that are similar to famous brand names, to create
the illusion of association with such brands, and then file bad faith trademark
applications or sell counterfeits or knockoff products under such tradenames/trademarks
in Mainland China, causing consumer confusion.
We successfully obtained an order from the Hong Kong
Companies Registry to compel the shadow company to change both its Chinese and
English names. Furthermore, we filed trademark invalidation against the shadow
company’s trademark registrations in Mainland China emphasizing the grounds of
bad faith. The Hong Kong Companies Registry’s decision together with the fact
that the applicant filed many marks similar to our client in related classes
were prime evidence establishing bad faith on the part of the shadow company.
The biggest takeaway from this successful case is
that, the threats posed by shadow companies incorporated in Hong Kong can be
much more easily overcome with early detection and taking advantage of the
company name complaint before the Companies Registry to compel the shadow
company to change its name. Such complaint must be filed within 1 year from the
company’s incorporation/adoption of such name. The favourable decisions from
the Hong Kong Companies Registry can also be utilized as evidence of bad faith
in other actions taken against the same target or even its associated parties
in the same squatter syndicate in Mainland China. In fact, we assist many of
our clients to identify shadow companies incorporated in Hong Kong by
conducting regular company searches to catch and kill such shadow companies in
the most cost-effective way possible at an early stage to minimize their damage
to our clients’ brands.
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4.Obtaining Well-known
Recognition of the Chinese Name of a Foreign Brand
We manage the greater China trademark portfolio of the
world's largest private non-profit educational testing and assessment
organization. Due to the high fame of the client, they have been a target in
numerous bad faith trademark squatting throughout the years. Amongst many
favourable decisions we obtained for the client, in particular, we succeeded in
having the CNIPA to recognize the well-known status of the client’s Chinese
name in opposition proceedings for the first time this year.
Under the current practice, obtaining the recognition
of well-known status by the CNIPA is no mean feat, especially in opposition
proceedings for a Chinese name of a foreign brand. Through our advice on
evidence collection, we successfully convinced the CNIPA to recognize the
well-known status of the client’s Chinese marks, and rejected the
counterparty’s applications covering services such as “news agency services” and
“personal background investigations” in classes 38 and 45 respectively, which
are otherwise less relevant to the client’s educational services. Such
recognition of well-known status will be of
tremendous help in preventing third parties from freeriding the client’s fame
and reputation in trademark applications and infringement actions going
forward.
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5.Tackling
Trademark and Copyright Infringement by Client’s Former Distributor in Mainland
China
We act for one of the world’s largest oil companies
against an infringer in the Greater China region. Our client discovered that a
Chinese car washing machine company has been operating a social media account
and posted images of a car washing machine in a petrol station in China
displaying the client’s mark. Through our investigation, it was revealed that
the entire design and decoration of the petrol station was highly similar to
our client’s and that our client’s mark was prominently displayed in the petrol
station.
Enforcement actions were taken based on trademark/copyright
infringement and unfair competition against both the car washing company and
the petrol station owner. Consequently, the car washing machine company took
down the infringing promotional materials consisting of our client’s mark on
their social media platforms and online platforms. On the other hand, the
petrol station claimed that it is authorized by the client’s distributor in
Mainland China. Through our further investigation, we successfully obtained
clear photographs of the products sold in the Chinese petrol station to allow
the client to verify the authenticity of the products for further action based
on breach of distribution agreement, intellectual property infringement and
unfair competition in Mainland China. We also successfully opposed the
pre-emptive application filed by the client’s distributor in Mainland China.
While the impact caused by Covid has cleared up
throughout the last year, from time to time travel restrictions and
Covid-related work arrangements still affect brand owners’ onsite investigations
against infringement activities within Mainland China. However, with our local
expertise and extensive experience in dealing with infringers across the
region, we are able to overcome different hurdles and devise effective
strategies, allowing us to continue to deliver successful outcomes against
infringers for our clients.
© Vivien Chan & Co., Newsletter issue 01, January 2023
All Rights Reserved
About Us
Vivien Chan & Co. is a full-service law practice with offices in Hong Kong (1985) and Beijing (1993). We are consistently recognized as a premier law firm for and in Greater China. With over 35 years of doing business in Greater China, our Hong Kong and China teams have an in-depth understanding and knowledge of the legal culture and market dynamics.
