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Dealing with unwanted fame

trade-mark-piracy

Brand owners may not even realise their products are becoming popular in China and attracting the attention of counterfeiters. Yan Wang of Peksung Intellectual Property uses a practical example to explain what options they have

trade-mark-piracy

A trade mark right is only valid in certain jurisdictions but the reputation of a brand is boundless. As China's economy develops, the activity of Chinese consumers is increasing. Moreover, the rapid development of the internet means that Chinese consumers know more about worldwide brands. Chinese consumers understand more about foreign brands than you think!

In July 2015, a consumer bought from mia.com (Mia) a Betta feeding bottle, that was imported from Japan. Mia is a large-scale online shopping website that mainly sells imported baby products. However, the consumer found that the feeding bottle bought from Mia was a little different from the one that he bought from the official Japanese website of Betta although the overall appearance and package of the two are basically identical. For example, the manufacturer shown on the feeding bottle from Mia was "Betta co, ltd", while the manufacturer shown on the official website of Betta and on the feeding bottle bought from the official website is "Zoom.t.co, ltd" (Zoom T). The consumer suspected that the feeding bottle bought from Mia was fake and asked to return it, but Mia refused. The consumer then published this matter on the internet and attracted a lot of attention.

On August 4 2015, Mia issued a statement announcing that the Betta feeding bottle it sold was genuine and authorised by the trade mark owner. But on September 18 2015, Zoom T announced that the Betta feeding bottles sold by Mia were not their products.

On September 20 and 22 2015, Mia made two announcements arguing that it purchased Betta feeding bottles from suppliers authorised by the trade mark owner. Mia also said that the suspicion that the products were fake resulted from a dispute over the right to the Betta trade mark.

Were the bottles fake or not? The dispute can be looked at from a number of different angles.

Which feeding bottle do consumers really want to buy?

There is no doubt that the consumers want to buy the Betta feeding bottles produced by Zoom T. Mia also admitted this in its statement of August 4 2015. Although there is a battle for the right to the Betta trade mark in China, the real owner of the trade mark Betta is Zoom T.

Who authorised Mia and whose bottles were they selling?

According to Mia's statement of August 4 2015, the chain of authorisation of MIA is as follows: Betta authorised Betta Infant Products (Beijing) (Beijing Betta) who authorised Mia.

MIA also showed a statement from Beijing Betta to support this chain of authorisation. It was Beijing Betta who imported the goods of Betta and supplied them to Mia.

However, in September 2015, after Zoom T denied the authenticity of the Betta feeding bottles on Mia, Mia published another chain of authorisation. The company claimed that Zoom T authorised D company, who authorised W company who authorised Mia (with a period of validity from April 1 2014 to October 31 2014).


"If positive trade mark monitoring is carried out, once the pirated a mark is published or registered, the true owner of the mark can take action in time"


Concerning the second chain of authorisation, MIA showed official documents of authorisation as evidence for the authorisation from Zoom T to D company, and then to W company, but there was only a purchase contract from April 20 2014 between W company and Mia.

Mia also said that there was a battle for the trade mark rights to Betta in China and argued that Zoom T had not acquired trade the mark right for this mark in China. The reason that Zoom T's trade mark applications were rejected was the prior applications owned by a company called Beijing Yisaisi International Trading (Beijing Yisaisi). It was because the trade mark right of Betta had not been ascertained then that its supplier W company purchased goods from Beijing Yisaisi during the period of October 31 2014 to September 1 2015.

Through online investigation, it is known that Beijing Betta and Beijing Yisaisi are owned by the same people and that these two companies are actually the same one. With respect to Betta, nothing is visible in Japanese websites, so it could be a paper company controlled by Beijing Betta and Beijing Yisaisi. Mia also mentioned in its statement that Beijing Yisaisi might have entrusted Chinese companies to produce Betta feeding bottles.

It is clear that Mia had sold both of the following two kinds of Betta products:

  • Fake Betta products manufactured by Betta and imported by Beijing Betta/Beijing Yisaisi;

  • Genuine authorised Betta products manufactured by Zoom T.

Who owns the Betta trade mark in China?

Covering feeding bottles in International Class 10, the earliest trade mark application is trade mark 9370942, which was filed on April 21 2011 and was co-owned by two Shanghai companies. This mark was opposed after it was preliminarily approved and published. Surprisingly, according to the adjudication of the Chinese Trade Mark Review and Adjudication Board (TRAB) on the appeal against the opposition to this mark, which was published in the statement of Mia on September 22 2015, the opponent was not Zoom T, but Beijing Yisaisi. TRAB said that this mark pirated Beijing Yisaisi's prior mark and rejected the registration of this mark. However, just like the consumers on Mia's website, the consumers bought Beijing Yisaisi's fake Betta feeding bottles because they thought these feeding bottles were produced by a famous Japanese manufacturer and had been imported to China from Japan. This raises the question of whether the reputation acquired by Beijing Yisaisi from producing and selling fake Betta feeding bottles should belong to Zoom T or Beijing Yisaisi.

Beijing Yisaisi owns nearly 200 marks in China. On May 6 2011, it filed its first application for Betta in class 10 in respect of feeding bottles and since then it has filed applications for both Betta and its corresponding Chinese character mark in many classes. It has over 50 Betta marks and more than 20 corresponding Chinese character marks. The registration of Betta in class 10 with the earliest application date was 15700142, filed on November 14 2014 and registered on January 14 2016. There was no record of opposition at time of writing. If no opposition was filed against it, Zoom T's sale of Betta feeding bottles will constitute infringement of Beijing Yisaisi's trade mark right.

In addition to the Betta marks and the corresponding Chinese character marks, Beijing Yisaisi also filed applications for Zoom T and Zoom T Co Ltd in Japanese characters. Obviously, Beijing Yisaisi clearly knew the relationship between Zoom T and the Betta mark.

In addition, Beijing Yisaisi filed trade mark applications for other famous mother and baby brands, such as Nuk, Baby Banana, Thinkbaby and Papagino. Beijing Yisaisi also filed trade mark applications for the Japanese company name of Papagino and there was also a Prada mark among the trade mark applications of Beijing Yisaisi.

What can Zoom T do?

The company should take action against Beijing Yisaisi's Betta marks and the related marks as soon as possible. The actions may include opposition, announcement of invalidation or a non-use cancellation.

According to current information, it seems that there is no direct business relationship or contact between Beijing Yisaisi and Zoom T. This means that Zoom T can claim, in respect of feeding bottles in class 10 and the similar goods, the reputation of its prior mark and Beijing Yisaisi's bad faith in the oppositions or announcements of invalidation, by relying on Article 13 of Chinese Trade Mark Law (prior well-known status) and Article 32 of Chinese Trade Mark Law (prior influential status and the bad faith of Beijing Yisaisi). It might be difficult for Betta to be recognised as a well-known mark in China, and there will be greater chances of success if Article 32 is claimed.


"Some brands become much more famous in China than in their own countries, thanks to the purchase agent services and overseas online shopping in China"


Zoom T's Betta mark is stylised to a certain extent. If this style was created by Zoom T or Zoom T obtained the copyright for it through other ways, prior copyright can be claimed according to Article 32 concerning Beijing Yisaisi's trade marks with the same style. Since copyright has no restrictions on specific goods or services, if Zoom T's copyright to the special font of Betta can be recognised, it may overcome prior marks in respect of dissimilar goods/services.

As we have seen, Beijing Yisaisi filed a lot of applications for famous brands, particularly mother and baby products. This activity (trade mark registration acquired by unfair means) may be prohibited according to Article 44 of China's Trade Mark Law. Zoom T can unite with the other companies whose trade mark rights were also infringed by Beijing Yisaisi to contact the Chinese Trade Mark Office together to complain, which might increase the chances of success.

File its own trade marks

According to its official website, Zoom T started the production of Betta feeding bottles in 1995. However, its first trade mark application for this mark in Japan was filed on June 25 2013, and only in class 10. On the other hand, Beijing Yisaisi started to file Betta-related trade mark applications in China on May 6 2011 and filed around 80 trade mark applications related to Betta in more than 20 classes. It is obvious that Zoom T's trade mark protection is inadequate in quantity and scope.

Start monitoring trade marks

Beijing Yisaisi's trade mark application for Nuk was finally rejected due to an opposition. Announcement of invalidation was also filed against Beijing Yisaisi's trade mark registration of Baby Banana. If positive trade mark monitoring is carried out, once the pirated a mark is published or registered, the true owner of the mark can take action in time. Obviously Zoom T did not do this effectively.

Lessons to be learned

Among Chinese consumers, a lot of people praise foreign brands or the products imported from foreign countries more than domestic brands. They know the foreign products through their relatives, friends or the internet, and then buy these products from foreign countries using different methods. For example, they buy these products when travelling abroad, or entrust Chinese people living in foreign countries (purchasing agents) to buy these products and then post them to China, or directly buy these products from foreign online shopping websites and then have the products posted to China. Among these methods, the purchase agent services greatly affect the promotion of foreign brands in China. To increase their sales revenue, these purchase agents promote foreign brands in China, which meets the needs of a lot of Chinese consumers who want to buy foreign products. This makes a lot of foreign brands very famous in China. The Betta case is a good example of this. Zoom T did not pay enough attention to the Chinese market and did not know that its brand had become so famous in China due to sales in these ways. Fake Betta feeding bottles produced or imported by Beijing Yisaisi, which were sold in large numbers by several big online shopping websites in China, might have equal or even larger sales figure as compared to those of the genuine article.

In these circumstances, a lot of foreign companies might have not started business in the Chinese market or might have only sold on a small scale, and they do not know that Chinese consumers may know their marks. What's more, some brands become much more famous in China than in their own countries, thanks to the purchase agent services and overseas online shopping in China. In these cases, the trade mark protection of these companies is usually poor. I hope that through this case, more foreign companies, especially the medium- and small-sized companies that have not enlarged their business in China and the companies whose products can easily be carried or posted or for daily use, can learn the importance and necessity of trade mark protection in China.

Yan Wang

Wang_Yan

 

Yan Wang is a Chinese trade mark attorney and attorney at law at Peksung Intellectual Property, an IP law firm in China. She obtained a Bachelor’s degree of Arts in Japanese from Henan Normal University, Henan, China in 2007 and a Master’s degree in Japanese from Shanghai International Studies University, Shanghai, China in 2009. After graduation, she joined Peksung Intellectual Property to practise as a trade mark attorney. She passed the judicial examination in 2012. Her working languages are Chinese (native), Japanese and English.


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