Although there are no provisions in China’s Trademark Law for the defensive registration of trade marks, brand owners frequently seek to register their marks defensively in a wide range of classes. This article considers to what extent ‘defensive registration’ is a desirable strategy.
Prior to the second amendment to the Trademark Law, in 2002, it was not possible to register trade marks in relation to goods that fell outside the registered scope of the applicant’s business. That amendment revoked Article 10 of the Implementing Rules of the Trademark Law, which had specifically provided that the goods in respect of which a trade mark could be registered must fall within the registered scope of the applicant’s business. Although the term ‘defensive mark’ is not used in the Trademark Law, this change in the law made it possible for brand owners, in practice, to adopt a ‘defensive registration’ strategy, even though their ‘defensive’ registrations may be vulnerable to cancellation on the ground of non-use .
In countries that make specific provision for defensive registration, such registrations are exempted from the ‘revocation for non-use’ rule. In Hong Kong, for example, the law provides that “If a registered trade mark … has become exceptionally well known in Hong Kong… the trade mark may, on the application of the owner of the registered trade mark made to the Registrar, be registered as a defensive trade mark in respect of any or all of those other goods or services”, and revocation on the ground of non-use “shall not apply in relation to defensive trade marks.”(Section 60 of Hong Kong Trade Marks Ordinance). Likewise, Japanese law provides that widely recognised marks can be registered in relation to identified goods or services other than those listed in the original registration. These additional goods or services need not be similar to the original goods or services and the registrant need not use or have any intention to use to mark in relation to the additional goods or services.
Because the law in China does not make specific provision for the defensive registration of marks, however, the adoption of a ‘defensive registration’ strategy in China is problematical.
The most immediate problem for brand owners adopting a ‘defensive registration’ strategy in China is presented by Article 44(4) of the Trademark Law, and Article 39 of the Implementing Rules, which provide that any person may apply to the CTMO to revoke a registered trade mark on the ground that it has not been used on or in relation to the goods in respect of which it is registered, for three consecutive years.
This means that unless marks registered for defensive purposes are ‘used’ in relation to the relevant goods, the registration will be vulnerable to cancellation. To overcome this problem, brand owners often engage in small scale production or advertisement of the relevant products, but this can be difficult and may, in any event, be insufficient.
A further problem, particularly for a brand owner whose mark has the potential to achieve ‘well-known’ mark status, arises when a ‘defensive registration’ is infringed. Should an action be brought for infringement of the defensive registration, or should the principal registration be relied on, claiming that the mark in question is ‘well known’ and, therefore, entitled to cross-class protection?
In most circumstances, the latter is likely to be the preferable course, as achieving ‘well-known’ status in China is very valuable. In practice, however, in this situation, the court is likely to examine the brand owner’s trade mark portfolio and, on seeing the ‘defensive registration’, require the brand owner to bring an action for infringement of the ‘defensive registration’. As a result, the brand owner would lose an opportunity to gain ‘well-known’ status for the mark (‘well-known’ mark status cannot be obtained on registration, but only subsequently), and, in all probability, face a revocation counter-claim based on non-use of the ‘defensively registered’ mark.
While China’s current Trademark Law remains in place, the risks inherent in the current practice of obtaining ‘defensive trade mark registration’ are likely to outweigh the benefits. This is particularly so in relation to trade marks that have the potential to achieve ‘well-known’ mark status. These issues should be considered carefully before embarking on a trade mark registration programme in China.