Piss-poor Media Coverage of Malicious Trademark Registration Rules

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Apologies for a long, cranky post during the holidays, but this topic deserves some attention. As you know, I’ve been writing about trademark squatting and other registration issues for a long time, and the subject has been particularly hot in the past couple of years with disputes involving famous brands and names like iPad, Hermes, and Michael Jordan. However, we cannot simply lump all of these cases together, label them as trademark infringement or trademark squatting, and look for a quick legislative fix.

That being said, it appears as though China will be addressing the issue of malicious registration in an amendment to the Trademark Law; Xinhua reported the news earlier this week:

The top legislature on Monday began deliberating a draft amendment to the Trademark Law that would prevent the malicious registration of trademarks that are already in use.

“Applications should not be accepted if the applicants know beforehand that the trademarks to be registered are already in use by other companies,” says the draft, which was submitted to the bimonthly session of the Standing Committee of the National People’s Congress (NPC) for review.

The draft is intended to curb the malicious registration of trademarks by individuals who have insider knowledge of other companies using said trademarks.

OK, a bit of explanation is in order. China’s current trademark law says that between multiple applicants, the first party to apply for trademark protection wins. This is the so-called “first-to-file” concept. There are, however, some exceptions to the rule, including special protection for well-known trademarks and “bad faith” registrations.

As to the latter, if it can be shown that the registrant had knowledge of the mark prior to the application, then a bad faith argument might be successful. Note that both arguments may be used with respect to both trademark oppositions (during the application process) as well as cancellations (after the mark has been registered).

All right, so why am I disgruntled? Two things: one a minor irritant, and the other a substantive criticism. I’ll start with the minor issue first and pick on Reuters, which ran a story on this issue with the following lede:

China plans to change the law to crackdown on “malicious” trademark registrations, state media said on Monday, after a series of cases in which well-know [sic] international brands and individuals have had their names or copyright misused.

Three problems with that sentence alone: 1) the typo; 2) the unforgivable sin of mixing up copyright and trademark (the above was the first of two such references in the article); and 3) the substantive issue (I’ll get to this in a minute).

I know I tend to go on and on about this, but is it really so hard to grasp that patents, trademarks and copyrights are different things? Are they conceptually that difficult to distinguish? Do editors actually do anything these days aside from coming up with inaccurate, inane but pithy headlines?

OK, rant over. On to the real problem.

The Reuters coverage, which as usual was aped by some other journamalists, suggests that this proposed amendment is a response to recent high-profile trademark cases, including (they say) Hermes, iPad and Michael Jordan. I find this rather odd.

Both the Hermes and Michael Jordan cases involved trademark squatting. Hermes lost (I assume) because of evidentiary problems, not because the law does not set forth a procedure by which the owner of an unregistered mark can mount a cancellation action based on well-known mark status. In the Michael Jordan case, which is ongoing, there is an added wrinkle of name rights, but even so, Jordan should not have too much trouble proving his fame at the time of the application.

The iPad case had nothing to do with trademark squatting, and the registration by Proview pre-dated the launch of Apple’s iPad tablet. Using the Apple-Proview dispute as an example of trademark squatting clearly reveals the Reuters reporter’s ignorance (in addition to the copyright references, that is). CNET also ran an article on this topic, along with a photo of an iPad, with a really inexcusable subtitle/blurb: “China says it will make a greater effort to stamp out companies such as Proview, which sued Apple earlier this year for the use of the iPad name.” {sigh}

Of the three cases cited by Reuters, one involves name rights, another is a straightforward well-known mark case, and the third was a contract dispute. I’m at a loss to explain how any new set of rules could apply to all of those situations.

Judging by the headlines, which include language like “China to crack down on,” “China to curtail,” and “China to stop” trademark squatters, it sounds like China law has a huge hole in in that needs to be filled. Nonsense. The legal system here has dealt with malicious registrations for years; it’s not perfect, but neither is it useless or nonexistent.

This begs the question: just what are we likely to see in these amendments? I don’t think we’re going to have any new causes of action; again, the law already allows brand owners to assert well-known and bad faith arguments during cancellation and opposition proceedings. This hint in the Xinhua article is quite odd:

The amendment also offers protection for renowned trademarks, giving their owners the right to ban others from registering the trademarks or using similar ones — even if such trademarks are not registered.

In such a case, the trademark in question must be determined to be well-known, with results to be valid only for that specific case, the amendment states.

What’s the problem? Well, that’s pretty much just a restatement of the current law as it is today. Hey, maybe the “amendments” will be nothing more than a legislative reminder to everyone out there that these issues have already been addressed in past trademark law reforms.

This isn’t to say, though, that winning such cases is always easy. Hermes, and many others, have lost because they were not able to prove well-known mark status at the time of registration. I suppose evidentiary standards could be loosened up a bit with some new rules. But that’s hardly a game changer.

With respect to bad faith, these cases are also often difficult to prove. Just look at the current fight involving Tencent and the “微信” (wei xin) mark. The squatter in that case filed an application just one week prior to Tencent’s! This was before the product launch, so any well-known mark argument will be extremely difficult to win. That leaves a bad faith argument, which the suspicious timeline definitely points to; whether Tencent has enough evidence to make its case remains to be seen. This may be one of those “insider knowledge” type cases referenced by Xinhua.

On the other hand, Xinhua tells us that the new rules would “prevent the malicious registration of trademarks that are already in use,” so it’s not even clear that these amendments would apply to the 微信 dispute. They definitely would have had no bearing at all on the iPad case.

Let me attempt a summary and exit here. Trademark squatting is a problem, and it looks as though the government wants to tighten up some rules in that area. It isn’t at all clear, though, that this is being pushed because of a few high-profile foreign-related {cough cough conceit cough} disputes, one of which is not even remotely applicable. Moreover, as the law already addresses malicious trademark registrations, this is not ground-breaking legal reform here.

And it has nothing at all to do with copyright!

2 responses on “Piss-poor Media Coverage of Malicious Trademark Registration Rules

  1. Chris Devonshire-Ellis

    Stan this news was released on Christmas Eve. A time when any self-respecting journo should be safe in the Pub getting a few bevies down than slaving away at a keyboard. Besides, we have you for that, as you’ve just proved.
    Merry Christmas!