Once there was a millionaire, who put up an advertisement to hire the best driver for his family. After several rounds of competition, three young men were selected. All of them had excellent driving skills, but the wealthy man wanted to hire the best of the best. The question was how to find the best? At last, the wealthy man led the three young men to a road near a cliff to test their brake skills. The first young man parked the car 5 meters from the cliff. The second young man said proudly, "I can do better." As promised, he parked the car nearly 1 meter from the cliff. Now, it was the third young man's turn to show his skill. He looked composed, but a little nervous. He told the wealthy man, "Sorry sir, if I know there is a cliff beforehand; I will park the car safely far from it." Consequently, the third young man got the job.
In commerce, our clients know all to well that their brands will be copied or imitated as their reputation grows; the damage can be as fatal as a cliff. However, companies often continue to expand their business without being cautious to protect their brands in advance because they think their famous brands are registered over the key goods and are well prepared to defend the bad faith filings or the counterfeiting. Unfortunately, there are limits to this strategy, and sometimes things do not go that way.
When dealing with the trademark cases, we noticed that famous brands are the most common trademarks that are imitated and copied by others in China. Often, it is hard to successfully oppose or invalidate these marks because the trademark dealers will choose to register the mark over goods or services that the famous brands marks do not cover. In practice, the common issues in opposition or invalidation cases are whether 1) the disputed mark constitutes a "similar mark over similar goods" compared to the real owners' marks; 2) the disputed mark infringes the real owners' prior rights (such as the designer's name right especially in fashion world, trade name right, copyright, etc.) and 3) the disputed party has any business relationship with the real trademark owners or had access to the real trademark owners' marks before filing. Generally, the China Trademark Office ("CTMO") follows the Chinese Classification of Goods or Services to decide whether goods are similar. It means that if two similar marks' goods fall under different classes or subclasses, they will be considered as dissimilar. Further, although these brands are famous, it is difficult for most of companies to submit sufficient evidence to prove that their marks are "well-known" and their brands deserve broader protections because it is an extremely high criterion to meet in China. Many cases are lost due to this reason.
Therefore, to resolve this dilemma most of famous brands were fixed, we suggest the trademark owners take a more conservative approach to their brand protection, that is to file defensive trademarks and designate goods over all interested classes and cover every subclass, if possible. Defensive trademarks are an effective way to prevent counterfeiting and bad faith applications. Additionally, we strongly encourage the trademark owners to preserve evidence that they have used their marks in mainland China (e.g. invoices, contracts, bills of lading, newsletters, promotional activities, awards, etc., bearing the trademark and date if possible). This type of evidence is not only required to submit in a non-use cancellation action filed by a third party, but also is very helpful in trademark opposition and invalidation actions. In fact, more protection is granted to marks that have acquired a certain reputation in mainland China, and use evidence is the way to prove reputation.
At last, back to our title, how many famous brands are hurting because their owners do not choose to "park their cars safely far from the cliff?" My friend, "The answer is blown in the wind."
