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Brief infringement analysis on prior trademark used as trade name without authorization

Author: Sai CHEN
Partner / Attorney-at-Law
Voice: Crystal DOU
Project Administrator

Welcome to Linda Liu & Partners on the air!
The topic for today is a brief infringement analysis on prior trademark used as trade name without authorization.In China, the conflict between trademark right and trade name right happens occasionally due to a number of factors, such as different rights are confirmed by different authorities. In practice, it is relatively common that an enterprise uses the trade name of another company with certain reputation.
The first factor that would be considered when determining the infringement is popularity of prior registered trademark

The level of popularity is a main standard when determining confusion. In judicial practice, it can be said that more than half of the battle has successfully finished as long as the court finds that the trademark is of high popularity. Thus, it is advisable for a trademark holder to collect considerable amount of evidence to prove the popularity of the trademark in infringement dispute cases.
The second factor to be considered is subjective bad faith of latertrade name holder, which means whether a trade name holder is aware of the existence of the trademark and has unfair purpose of taking advantage of trademark reputation when he or she registers the trade name. If the trade name holder has bad faith, it can be determined as a violation of principle of honesty and credibility which constitutes unfair competition according to Anti-unfair Competition Law.
When you find that your trademark is infringed, what action should you take to prevent such infringing act? According to our experience in the past years, the following actions may be done to solve the dispute.
Option1. Warning and negotiation 
Warning and negotiation means to send a C&D letter to the trade name holder, negotiate with him/her, and request him/her to stop using the trade name and change it. Some of the infringers, upon receiving a C&D letter, usually accept the request from the right holders under pressure. But some may be stubborn and insist on no infringement based on their registered trade names. Under such circumstance, it is necessary to take further actions.
Option 2. Administrative investigation  
When the accused infringing products are labeled with noticeable trade names, which constitute trademark infringement, the main aim of applying administrative investigation is to seize the inventory goods on-site and timely prevent the circulation of the infringing goods. Meanwhile, the right holder may use the force of local Administration for Market Regulation, which may persuade the trade name holder to change the trade name voluntarily.
Option 3. Civil lawsuit     
A trademark holder may directly initiate a civil lawsuit to solve a dispute. Although it costs more time and money in a civil lawsuit, it can ensure that the trade name dispute is solved by the court. Moreover, it is a chance for the trademark holder to request well-known trademark recognition by the court. In addition, the trademark holder may obtain damages in a civil lawsuit.
So, this is a brief infringement analysis, and advice on the actions that could be done when prior trademark is used as trade name without authorization
Please feel free to let me know if you have any question. Thank you for listening, bye~
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