How’s that for a headline? You knew that a case involving a trademark squatter was going to get my attention, and one involving not just Baidu, one of the China’s most famous companies, but also a condom brand, is simply irresistible.
There are some lessons to be learned here and some fun facts about Baidu’s trademark strategy and approach to IP protection. So let’s have a look at the facts of this case to start things off. The case involved a Shenzhen health care products company called Yelaixiang, which had filed the “百度” (Baidu) trademark in 2005 and received approval in 2008. (Almost three years! Another reminder of the problem of long queues at the Trademark Office, which they have already cut down on substantially.)
Is Yelaixiang a trademark squatter? Yes, although some specifics are necessary here. They filed in 2005, long after Baidu was a famous company. Some of Baidu’s trademark filings go back to 2001. I think it would be difficult to argue that Yelaixiang was not aware of Baidu’s brand when it filed for protection in 2005 — I call that bad faith and trademark squatting. Assuming all this can be proven, of course.
All right, the next bit of relevant information here requires us to talk about product classification. Remember that when you file for trademark protection, you have to specify which products or services you wish to protect. You cannot simply go to the Trademark Office and ask for protection on everything. Moreover, trademark infringement and the question of similar marks involves specified products or services. For example, although I may not be able to register the trademark “Apple” in Class 9 for computers, it’s possible I can do so for the same mark in Class 2 under paint products (that’s a guess – I have no idea if that’s available).
That means that just because Baidu is a famous company that started filing marks in 2001, Baidu’s trademark coverage may not have been sufficient to deal with the Yelaixiang mark. Since I know you guys have better things to do, I took a quick look through the Trademark Office database and found the relevant information.
Yelaixiang’s 2008 registration was in Class 10 (medical products) and specified condoms. By the way, I did a quick search under Yelaixiang’s name in the database. They have a huge number of marks registered, including some relevant generic terms such as “DICK,” “SHAFT,” and “STRETCH” for some reason, and although I did not look at all of the marks, I did notice that they also have registered “阿里巴巴” (e-commerce company Alibaba’s name in Chinese), also in Class 10 specifying condoms. Apparently there are others (h/t @JoeXu).
So what about Baidu’s trademark coverage? This was rather interesting. For one of China’s most famous brands, you would expect Baidu to have extensive coverage, and indeed they do. My cursory look at their trademarks show that they have filed in every single Class.
Class 42: software development
Class 9: computers (also, I was amused to see, “floppy disks”)
Class 38: mobile/telecom services
No surprises there, right? Baidu is an Internet company, so mobile services, software, and computers, that all makes sense. But wait, there are more. Remember, Baidu has marks registered in all Classes, so some of them are bound to be totally unrelated to their core business.
Class 1: insecticide
Class 2: paint, food coloring
Class3: toothpaste, soap, shampoo, animal makeup (I’m not kidding – “动物化妆品”)
You might be wondering, why the hell would Baidu file under animal makeup and food coloring? No, they aren’t crazy. For each single trademark application, the applicant may specify up to ten goods/services. More than ten triggers additional fees. So if you’re going to file for protection of one or two products, you might as well choose some others and get your money’s worth. Free IPRs!!!
So that registration in Class 2 for food coloring seems a bit weird until you realize that the application also included beverages. (I left that out on purpose to illustrate this point. Most, if not all, of the filings included ten products/services.) Baidu probably isn’t worried about Baidu-brand food coloring, but an unauthorized Baidu-brand Cola would probably make Robin Li unhappy.
Another way to look at Baidu’s filing strategy is to look at the mark in terms of what they actually might use (e.g. mobile services, software development) for their core business versus what they will probably never use (e.g. insecticide, toothpaste). We can call the first category “offensive filing” and the second one “defensive filing,” the latter because it is only meant to stop use by third parties and has nothing to do with actual use of the mark. Because defensive filing is done to anticipate the nefarious scheming of would-be squatters and infringers, it can also be referred to as “prophylactic filing” (I was legally obligated to get that in sometime during this post).
Now that we have that out of the way, there is one remaining piece of the puzzle: Baidu’s filing in Class 10, the same class under which Yelaixiang filed. I do confess that I originally went to Class 5, pharmaceuticals, to search for contraceptives. After searching through “personal sexual lubricants,” “Herbs (Smoking –) for medical purposes,” “cocaine,” and “vulnerary sponges,” I realized that condoms were nowhere to be found. Only later did I discover that they were in Class 10.
I then found Baidu’s Class 10 filing, and unfortunately they had not specified “condoms,” going instead with items like medical and dental equipment, baby bottles, and surgical sutures. But don’t be critical of Baidu’s IP team on this point. This registration was approved in 2010, so even if they had tried to include “condoms,” the earlier Yelaixian registration would have blocked it.
Now we can get back to the actual dispute. Baidu filed an administrative action in 2010, which the media is referring to as an “appeal.” I’m going to assume that since the mark was already registered, this was actually a cancellation request with the Trademark Review and Adjudication Board (TRAB) asserting a bad-faith registration. The only criticism I can lay at the feet of Baidu here is that they did not knock this mark out during the publication period (i.e. filing an opposition instead of a cancellation), but I guess better late than never. I expect they now have a top-notch trademark watch service working for them to avoid a repeat of that mistake.
Well, Baidu lost in front of the TRAB and they appealed to the Intermediate Court in Beijing. Since it was an administrative appeal, that meant that it was Baidu vs. TRAB, and Yelaixiang was not formally a party to the dispute.
Baidu won the appeal, which means that the Trademark Office will revoke the trademark. Although the case was not a determination of infringement, I would expect that Yelaixiang would also stop using the mark on condoms. If they don’t stop using it, Baidu would have a solid infringement case, using their existing Class 10 registration and famous brand status.
Right then. One final point. I’ve been talking about several other trademark squatting cases recently, with some famous foreign brands like Hermès and Chivas Regal ending up on the losing side. Why did Baidu win when some of these others didn’t? There are various reasons why those cases were flawed, but what it comes down to is evidence.
Baidu is a mega-brand here in China, and it must have been extremely easy for them to produce sufficient evidence as to their well-known status prior to 2005. In addition to its trademarks, essentially all of Baidu’s advertising and publicity activity takes place in China, and none of it is that old. Another advantage Baidu has over foreign brands is that as a domestic firm, they are eligible to be included on a variety of “Famous Trademark” lists that are generated by several different government agencies, different provinces, etc. Suffice it to say that Baidu’s evidentiary hurdle, in terms of gathering information, was a relatively low one.