Caixin reports that the nine are being investigated over allegations that they worked together to ensure that certain trade marks were given well-known status.
Having a well-known mark offers prestige to a brand as well as giving its owners greater powers to block competing marks from the registry. It can be obtained in one of two ways in China: through administrative proceedings such as a trade mark opposition or cancellation action, and through litigation.
The Henan arrests have shone a light on scams in China that lawyers say see company executives pay an individual to infringe their mark. The company files a lawsuit against the willing defendant and in the course of the litigation a friendly judge agrees to declare the plaintiff’s mark well known.
They also come after China’s highest court, the Supreme People’s Court, issued a series of opinions explaining how judges should interpret and apply the country’s IP laws.
Lawyers from Hogan Lovells say that the Opinions from the Supreme People's Court of China on Giving Full Play to the Functional Role of Intellectual Property Trials explain that the courts should carefully examine evidence submitted in support of a claim for well-known status to prevent companies from deliberately creating trademark disputes as a means to seek the recognition of well-known trade mark, suggesting that China’s top judges are aware of scams similar to those alleged to have taken place in Henan.
Deanna Wong of Hogan Lovells told Managing IP that she believes the wide-ranging opinions have led to more reasonable, consistent rulings from Chinese courts.
But she added that while many brand owners focus on obtaining well-known status for their trade marks, there is still uncertainty over the exact level of additional protection it offers.
“Historically it was believed that registered well-known marks would be offered more protection in other classes. But does it also mean that owners of well-known marks will find it easier to enforce their marks?” said Wong. “It may not be as good a weapon as it should be.”
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