PRC Trademark Practice Tip – use it or lose it

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Nanjing MG Automobile Co Ltd, which produces the MG brand passenger cars in China, has been sued by a Chinese citizen for alleged copyright infringement.

The Zhejiang Province native surnamed Xu has filed a law suit against Nanjing MG, claiming the Chinese car maker illegally used the MG trademark on cars without his permission.

The MG brand was registered for use on vehicles in 2003. The name was later transferred to Xu in 2005.

Nanjing MG applied to register the MG brand in 2007 after it took over the manufacturing facility of MG-branded models from the failed MG Rover Corp in 2006.

People close to the issue say the State Trademark Office has canceled Xu’s ownership of the MG brand. According to Chinese law, a trademark has to be put into use within three years after the registration otherwise it can be canceled. The case has been accepted by the court and a decision is expected soon. [Shanghai Daily]

First off, we probably have a misunderstanding of what is a trademark and what is a copyright. To clear that up, note that the case is/should be about trademark, the "MG" logo. The reference to "copyright infringement" may be incorrect. However, it is possible that Xu has filed a copyright case on use of the logo because the trademark argument has already fallen apart. If this is true, Xu is not too bright – bad case. I don’t see how Xu can prove that he/she has any copyrights to that particular logo.

Second, we’ll probably never know how this interesting case would have gone if this person Xu had simply used the mark once in the past three years. Doesn’t take much – an advertisement in a newspaper would have done it. But no, sadly Xu didn’t bother, and Nanjing MG was able to petition the China Trademark Office to cancel Xu’s mark due to non use, referred to as a three-year non-use cancellation. Easy win for Nanjing MG.

Third, if Xu’s mark had not been cancelled, you would have had Nanjing MG trying to come up with another reason why they should get the rights to the mark as opposed to Xu, the registered owner. Probably the best bet would be some sort of bad faith or famous mark argument. Not only would this have taken years but who knows what the result would be?

Fourth, I assume that the lawsuit will be dismissed soon, particularly if it is a trademark suit. If Xu is not the trademark owner any more, there is no standing to sue Nanjing MG under a trademark theory. If it is really a copyright case, I would love to see how ownership is aserted – that would be amusing.

Five, just because Xu’s mark has been cancelled does not mean that Nanjing MG is now the lawful owner. All it means is that the mark is up for grabs. If Nanjing MG pursued a smart strategy, they filed the mark at the same time they filed the non-use cancellation action. That way, when the mark was cancelled, they were probably "first in line" to get the new mark registered. As this can take over two years these days, however, it’s probably still pending.

If you have read this entire post and find this interesting: you are an IP geek and should seek professional (mental health) assistance.

If you’ve read this and understand it all: you are a China IP geek, and most likely I already know you — hey, how’s it going? how’s business? haven’t heard from you in a while; whatcha doin’ for the Olympics?

5 responses on “PRC Trademark Practice Tip – use it or lose it

  1. Matt

    Very interesting, I think being able to follow IP precedent being set in China is exciting. My job has nothing to do with law, what kind of geek does that make me?

  2. Stan Post author

    An incredibly scary, he-was-a-quiet-neighbor-who-didn’t-have-any-friends-we-had-no-idea-he-kept-body-parts-in-the-frig type of geek, no doubt.

  3. Kenan Farrell

    Lol, yeah…saying hello also in response to your last comments. I suppose I’m a China IP geek. I blog on Virtual law issues in emerging markets (China, Korea) over at virtuallyblind but I’ve been following your blog for awhile. Thought I’d introduce myself. Hope you’re enjoying these great Olympics.