On Thursday last week the Bavarian Supreme Court dismissed the appeal of German supermarket Okai and found that its registration of the Wangzhihe mark amounted to unfair competition.
The case has been widely covered in China’s domestic media since the first instance decision was handed down in November 2007. Officials have sought to present the litigation as an example of why Chinese companies need to be more careful about how they protect their brands overseas.
"This case tells us that Chinese companies should attach great importance to protecting their trade marks overseas, as in many counties, trade marks are registered on a first-come-first-served basis," said Li Jianchang, vice-minister of State Administration for Industry and Commerce, according to the state-run newspaper China Daily.
“I don’t think this has had the kind of impact it should have had,” said George Chan, a consultant for Rouse in Beijing. “This concept of registering your primary mark overseas has been lost on some Chinese,” he added.
Chan said that he had not seen an increase in the number of Chinese companies looking to file their marks abroad since the Wangzhihe case began receiving publicity. Wolfgang Festl-Wietek, a partner of Viering Jentschura & Partner in Munich who advised Wangzhihe on the case, also said that he had not seen a big rise in trade mark applications from China, but said that might be because many Chinese companies use the Madrid Protocol.
The facts of this case are almost an exact reversal of many foreign companies' experiences in China. In 2006, Wangzhihe decided to increase its presence in the German market but discovered that the Wangzhihe trade mark had already been registered by Okai, a Chinese owned supermarket company that had been an authorised distributor of its products.
Festl-Wietek said that the case was complicated by the fact that Wangzhihe had no trade mark registration in the country and that its status as a famous Chinese brand did not help in Germany.
Wangzhihe initially tried to argue copyright infringement but found that the courts were unwilling to grant copyright in this case. However, it sucessfully argued unfair competition.
Okai appealed the ruling and attempted to settle the case during the appeal. “We said that you should never reward theft,” said Festl-Wietek.
The Court did not award damages because Okai had not actually used the mark to sell other products. But its registration of the Wangzhihe mark in the relevant classes has been invalidated.
Wangzhihe is not the only Chinese company to have suffered from trade mark squatting. Festl-Wietek confirmed that his firm is also acting for Baijia, a maker of sweet potato noodles, in a similar case in Germany. “More and more Chinese companies are successful here. As soon as they are successful there is an infringer,” he said.
According to a report in the Financial Times last week two Chinese individuals have applied for trade mark registrations in Canada for marks owned by more than 60 Chinese companies. These include the Bank of China and China Investment Corporation.
“Based on the nature of the registrations and the number that are involved, this looks like a pretty clear case of trade mark squatting,” said Chan.
The cover story in Managing IP’s October 2007 looked at why Chinese companies need to build global brands. For that article Managing IP searched trade mark databases in the US, Australia, Brazil and the EU and found that life insurers China Life and Ping An and Air China, a sponsor of the Beijing Olympics, had no Community trade mark or USPTO registration at that time.
