The Case in Brief

 

The "Bishounen" brand sake, first brewed in Japan, has been produced and marketed in Kyushu, Japan since the 2020s. The brand name   (Bishounen, meaning handsome juvenile) was created by the then president of Nankaoru Shuzo Co., Ltd. (later renamed Meishōn Shuzo Co., Ltd.), who borrowed the term from the verse "Zongzhi is a natural and unrestrained handsome juvenile" in the poem entitled "Eight Immortal Drinking Songs" written by Du Fu, a Chinese Tang Dynasty poet. After it was registered in Japan, the trademark, together with the sake brewing business, was, due to business changes, transferred to NLA Co., Ltd. (NLA), and the trademark was later changed into "Corporate Bishounen".

 

Since 2004, A Chinese natural person by the surname Feng has repeatedly applied for registration of a number of trademarks from Japan, including "Bishounen", “”, "Yu Naiguang", "Gaoqingshui" and "Kamo Tsuru", and prominently used them in respect of sake and other products. He also claimed that the products came from Japan. Up to now, Feng has obtained registration of five "Bishounen" trademarks: Trademark Registration Nos. 22065677, 19242286, 16484591, 8848113 ("Cited Trademark 2" hereinafter), and 4067769 ("Cited Trademark 1" hereinafter).

 

In 2014, NLA applied for international registration of the “” trademark (No. G1192609) under the Madrid Agreement for extending the territorial protection of the trademark to China (the "Bishounen" trademark application). After examination, the Trademark Office rejected the application by citing Feng's trademarks, namely the Cited Trademark 1 and Cited Trademark. On January 5, 2015, NLA filed an request for reviewing the rejection with the then Trademark Review and Adjudication Board (TRAB) and actively sought to remove the obstacles to its above prior rights.

 

• Regarding Cited Trademark 1

 

On March 9, 2011, a request was filed by some other party for cancellation of the trademark on the ground of non-use for three consecutive years, and the trademark was finally cancelled on September 6, 2015.

 

• Regarding Cited Trademark 2

 

1. Administrative Proceedings

 

On May 22, 2015, NLA requested, under Article 49 of the Trademark Law, the Trademark Office for cancelling the registration of cited trademark 2 on the ground that Feng had not used it for more than three years without justifiable reasons. In February 2016, the Trademark Office found, upon examination, that the evidence of use of the trademark provided by Feng was invalid, and decided to cancel the cited trademark 2. In March 2016, Feng filed an application with the TRAB for review of the cancellation decision, and submitted additional evidence of use. In the cancellation review proceedings, TRAB determined that the evidence of use from Feng had formed a complete chain of evidence, which could prove that cited trademark 2 was used in respect of the designated goods, and thus made a review adjudication in January 2017 to uphold the registration of cited trademark 2.

 

In March 2017, TRAB issued a review decision rejecting the extension of territorial protection of the trademark application (No. G1192609) to China, as the registration of cited trademark 2 was upheld in the cancellation review proceedings.

 

Finding that the evidence from Feng in the case of cancellation of cited trademark 2 had serious defects, including, among other things, blurred photocopies, lack of supporting evidence of actual performance, and failure of the photos to show the specific time of use, NLA could not accept TRAB's cancellation review decision and the subsequent decision to reject the review decision, and decided to file an administrative lawsuit regarding both decisions.

 

2. Court Proceedings

 

In 2017, NLA filed an administrative lawsuit with the Beijing Intellectual Property Court (BIPC) in direction to the above-mentioned cancellation decision and the review rejection decision, requesting BIPC to suspend the hearing of the rejection review case (involving NLA's "Bishounen" trademark application) before the litigation ruling on the cancellation review case (involving the cited trademark 2) was made. Unfortunately, BIPC did not support the suspension request.

 

Since the above-mentioned suspension request was not supported by the court, the proceedings involving NLA's "Bishounen" trademark application rejection review case proceeded. BIPC, in the first instance in April 2018, and the Beijing Higher People's Court (BHC), in the second instance in September of the same year, successively found that cited trademark 2 did not lose its legal validity and could be used as a valid cited trademark, it is not undue for TRAB to have found the trademark application (G1192609) contrary to the provisions of Article 30 of the Trademark Law, and rejected NLA's litigant claim accordingly.

 

On the other hand, after a long wait, BIPC finally heard the above-mentioned administrative lawsuit involving the cancellation review in 2019. In response to the plaintiff NLA's challenge to the evidence provided by Feng, the third party, BIPC specifically pointed out that the China National Intellectual Property Administration (CNIPA) should match the copy to the original when examining the evidence to verify its authenticity, and if it could not match the original, the witness will bear the consequences of inadequate performance of its burden of proof. BIPC ultimately supported the plaintiff NLA's claim. In Feng's subsequent appeal, BHC rejected the appeal in its final judgment in 2021, and upheld the original ruling. Finally, in May 2021, CNIPA made a review decision, cancelling cited trademark 2 according to the above court ruling.

 

After receiving the above-mentioned cancellation review decision, NLA requested BHC for a retrial in October 2021 regarding rejection review lawsuit involving its "Bishounen" trademark application. After hearing the case, BHC held that the request for retrial met the legitimate circumstance where "there is new evidence sufficient to overturn the original ruling" as stipulated in paragraph two of Article 91 of the Administrative Procedure Law, and decided that the case should be retried by a collegiate panel reconstituted by BHC. According to Article 28 of the Provisions of the Supreme Court on Several Issues Concerning Trial of Administrative Cases Involving Authorization and Confirmation of Trademark Rights, since cited trademark 2 had been cancelled on November 13, 2021, the collegial panel reconstituted by BHC upheld NLA's claim, ruled to revoke the first-instance and second-instance rulings and rejection review decisions on the trademark application (G1192609), and ordered CNIPA to make a new review decision regarding the trademark. Finally, CNIPA made a new review decision in February 2023, approving the application for extended territorial protection of the trademark (No. G1192609) in China.

 

 

Difficulties and Enlightenments

 

(1) Options for Combating Registrations in Bad Faith

 

Articles 32 and 45 of the current Trademark Law stipulate that if an applicant preemptively registers, by unfair means, a trademark that has been used by another party and has a certain influence, the prior right holder or interested party may request the TRAB to declare the registered trademark invalid within five years from the date of registration. For bad-faith registrations, the owner of a well-known trademark is not subject to the five-year limitation.

 

However, in practice, it is difficult for foreign enterprises to provide evidence to request invalidation of a registered trademark on this legal basis. It is even more difficult for them to collect evidence to prove that their trademarks are used earlier and have certain influence in China and that the other party's preemptive registration is in bad faith. In addition, there is a five-year limitation for requesting invalidation. If the other party requests invalidation after five years of trademark registration, it is necessary to prove that his own trademark is well known, but establishing a well-known trademark requires more evidence to prove that it has extensive influence on the relevant sector of the public in the relevant market, which would make it much more difficult to adduce evidence to this effect.

 

Therefore, even in case of bad-faith pre-emptive registration, it is not necessary to request invalidation. Instead, as Article 49 of the Trademark Law stipulates, requesting cancellation of a trademark on the ground of non-use for three consecutive years without justifiable reasons and re-registering one's own trademark is a more time-saving, cost-effective and effortless choice, and has also been adopted in practice by many enterprises under the advice of trademark attorneys. Under Rule 66 of the Implementing Regulations of Trademark Law, in cases where a registered trademark is cancelled on the ground of non-use for three consecutive years without justifiable reasons, the trademark registrant should submit evidence used in connection with the trademark before filing a cancellation request or explain the justified reasons for the non-use, as a cancellation request only requires explanation of the relevant circumstances, with relatively lighter burden of proof and significantly lower costs.

 

(2) Regarding Judge’s Discretion

 

Under Article 51 of the 2017 Interpretation by the Supreme Court of Several Issues Concerning Implementation of the Administrative Procedure Law (now Article 87 of the Interpretation by the Supreme Court on Application of the Administrative Procedure Law), in the course of litigation, the trial of a case must be based on the outcome of the trial of the relevant civil, criminal or other administrative case, and with the relevant case pending, the litigation shall be suspended.

 

However, in practice, although the applicant may request the court to suspend the trial, the judge has discretion as to whether the previous case will have an impact on the case and whether the trial should be suspended. What’s more the court accepts a large number of cases and its case schedules are quite complex. To improve efficiency and reduce the backlog of cases, the judge may not allow the trial to be suspended. In the case under this study, the review and litigation proceedings involving the rejection of the application went in parallel with the application, review and litigation proceedings involving the cancellation of the registered trademark. Although the result of the registered trademark cancellation would substantially impact the outcome of the rejection review lawsuit, the judge ruled not to suspend the hearing. The first-instance hearing of the cancellation review did not start until 2019, thus very much lengthening the timeline, with greatly increased litigation costs of the parties.

 

(3) Regarding Choice to Push the Appeal

 

Article 31 of the current Trademark Law stipulates that if two or more trademark registration applicants apply for registration of the identical or similar trademarks in respect of the same or similar goods, the trademark filed first shall be preliminarily examined and publicized.

 

In the absence of the outcome of a cancellation lawsuit, it is a very difficult choice to proceed to appeal the outcome of the first-instance rejection lawsuit as it is not certain the appeal will win. However, the obvious advantage of filing an appeal is that the trademark application (G1192609) would be kept valid, with the filing date preserved. As the application remains valid, once cited trademark 2 is successfully cancelled and the rejection review lawsuit is won in the second instance, then it is possible for NLA's "Bishounen" trademark to be registered. Conversely, if the appeal is not filed and the review decision rejecting the protection extension request takes effect, the NLA's "Bishounen" trademark application will no longer have the effect of blocking others from filing a later application. At this point, once someone files an application for registration of "Bishounen" or a similar trademark in respect of the same or similar goods, even if cited trademark 2 is finally cancelled and NLA immediately files a new registration application, the NLA's subsequent registration application will face a new registration hurdle: the Trademark Office will prioritize the registration of application filed by an earlier applicant. Therefore, while there will be some time and money costs due to the choice made to keep the original application alive as a result of the continued appeal chosen, the applicant can at least reduce the risk of any new obstacles that would otherwise arise to block his trademark registration.

 

(4) Regarding Determination of Evidence in Cancellation on the Ground of Non-use for Three Consecutive Years

 

Under normal circumstances, when examining evidence showing trademark use submitted by the registrant of a disputed trademark, the court will require that the evidence to this effect meet the following basic requirements:

i) the relevant evidence is authentic in form;

ii) use of the trademark occurs within the specified period;

iii) the evidence of use shows the existence of a disputed trademark logo; and

iv) the disputed trademark logo is used in respect to the designated goods or services approved.

 

In this case, BIPC requested CNIPA to check the evidence submitted by the parties with the originals when hearing a trademark cancellation review case. In practice, many commercial entities lack the awareness of regulated use of their registered trademarks, and little evidence of trademark use is retained in their business operations, and some trademark right holders even have falsified evidence of trademark use in order to circumvent the provisions of the system regulating non-use of trademarks for three consecutive years. For this reason, it is particularly important for CNIPA to check the originals when examining evidence of trademark use. If a trademark right holder is unable to submit the relevant original copy of the evidence of use, thus making it difficult for the defendant or the court to determine whether or not the disputed trademark has been in public, truthful, and legal use within the specified period based on the copy alone, the holder shall bear the legal consequences of failure to provide evidence.

 

This case has offered something for CNIPA and the courts to draw on in their future hearing of such cases to stringently determine the authenticity and relevance of evidence in their examination of evidence. On December 4, 2022, CNIPA released, on its official website, the Explanation on Providing Evidence of Trademark Use, specifying in detail the requirements that should be met concerning evidence of trademark use, the specific forms of expression of trademark use, the circumstances under which trademarks are not deemed to be used, and the legitimate reasons for not using it for three consecutive years. We believe that in future trademark examination and trial, CNIPA and the courts will make clearer determination.

 

(5) Regarding Attorneys’ Role

 

This trademark application case and the resultant review, cancellation and administrative litigation have involved professional legal issues that require careful study, professional advice and patient work on the part of experienced attorneys. In this case, the Chinese and Japanese attorneys, through years of cooperation, have established, between them, good mutual trust and full and close communication channels and methods. Faced with the uncertainty in terms of time and financial costs, and the final outcome, the attorneys of both parties have done their best to fully demonstrate their professionalism, experience and confidence in front of their applicant, have persuaded the applicant, won its understanding, support and cooperation, and finally arrived at the satisfactory result.

 

Good results always come from long and hard work. Justice is ultimately done. In the case, the Japanese company Mizuki Co., Ltd. and the Chinese and Japanese trademark attorneys particularly deserve the admiration and appreciation for their constant efforts to seek justice, and they have also offered something for Chinese and foreign enterprises to learn from when they should encountering similar circumstances.