Trademark Enforcement

Using Copyright to Battle Trademark Pirates in China

SIPS Copyright Registration, Knowledge, Trademark Enforcement

This article examines how foreign rights holders can assert copyright against Chinese pirates who apply to register or use their design trademarks in China. It focuses in particular on a recent case decided by China’s Supreme People’s Court (SPC) that illustrates the protections available and explains the type of evidence required for rights holders to establish ownership in copyright.

Key points
  • Adjudicators in China will routinely rely on copyright when dealing with oppositions and invalidations against trademark pirates. The same is true in relation to enforcement of rights in the courts.
  • As they discover incidents of piracy of their logos, most rights holders do not have copyright registrations in China or elsewhere that can help raise a presumption of copyright ownership. But in a recent decision, the SPC overturned the Beijing Municipal High People’s Court’s (BHPC) earlier denial of copyright ownership of, based on a range of evidence, most notably a US trademark registration which was recognized as “preliminary evidence [of the rights holder’s] right to claim copyright in a trademark logo”.
  • Rights holders that are concerned with possible piracy of their trademarks should consider registering their logos as a copyright subject matter in China. Failing that, the recent SPC decision serves as a reminder that a copyright registration can still be useful even if obtained after the filing of the pirated trademark. But the rights holder will also need to provide extensive paperwork documenting the prior use, as well as the original creation and acquisition of the work.
Introduction

Article 32 of the Trademark Law of the People’s Republic of China allows rights owners to oppose or invalidate a design trademark on the basis that it infringes copyright. This protection is based on the assumption that the trademark pirate acted in bad faith.

China protects copyright upon the creation of a work, and as a member of the Berne Convention for the Protection of Literary and Artistic Works, China extends this protection to rights holders in other member countries, including Australia.

China also has a copyright registration system, and while registration is not necessary, it is accepted as prima facie evidence of copyright ownership.

When asserting copyright against trademarks, rights holders often struggle to prove their copyright ownership. They either have not secured a copyright registration predating the date of the disputed trademark or they do not have sufficient evidence proving the origin and development of the copyrighted work.

In the recent case before the SPC involving an opposition to the pirated mark “GREGORY with Mountain Logo” filed by Gregory Mountain Products LLC (Gregory) of the US, the court supported claims of copyright ownership by the victim brand owner based upon a range of evidence, including most notably evidence of trademark registration in the US as well as use of the logo prior to the date of filing of the pirated mark in China.

Background

China is a first to file jurisdiction, and foreign trademark rights are not recognized unless they are “well-known” in China.

Further, registered Chinese marks do not enjoy cross class protection — ie, protection against goods and services deemed dissimilar to those protected by the registered mark. There are certain exceptions, such as cases involving well-known marks, serial piracy or other prior rights.[i]

One of those “prior rights” include copyright. Hence, copyright potentially allows rights holders to claim protection for unregistered marks or cross-class protection of their registered marks.

However, proving copyright has often been difficult. Rights holders very rarely have a copyright registration in China or elsewhere, particularly a copyright registration that predates the filing date of the disputed trademark. Copyright registrations secured after the filing date of the disputed mark have sometimes been disregarded entirely by adjudicators in China.

In the absence of a copyright registration, rights holders can seek to establish ownership by providing evidence on how and when the work was created and acquired. This may include original (dated) drawings of the work and contracts relating to the development and/or acquisition of the work. In practice, rights holders often struggle to find this kind of evidence (the origins of corporate logos tend to be forgotten as a company grows). Adding to the complexity (and cost), Chinese courts require that all evidence originating outside of China be notarized and then legalized by the Chinese Embassy or Consulate nearest to the rights holder.

Some rights holders have pointed to earlier trademark registrations that predate the disputed trademark as evidence of prior copyright, but this strategy has, until recently, met with resistance from Chinese adjudicators who are rightly concerned that the trademark owner may not necessarily be the owner of the copyright in the design.

The SPC decision in the case involving the Gregory logo recently discussed the extent to which prior trademarks and copyright registrations obtained after a pirate mark was filed can be acceptable in supporting claims of copyright ownership.

Summary of the case

The Chinese company Heshan Sanliya Crafts Co Ltd (Sanliya) filed for the disputed mark GREGORY with Mountain Logo in 2000, which is substantially identical to a US trademark owned by Gregory that was filed in 1992. Gregory filed an opposition against the mark after it was preliminarily approved by the China Trademark Office, and after years of litigation, the dispute finally boiled down to one key issue: whether Gregory possessed copyright in the logo design.

US Trademark

China Trademark

Although the Trademark Review and Adjudication Board and the Beijing First Intermediate People’s Court both held that the evidence submitted by Gregory was sufficient to support that Sanliya infringed upon its copyright, the BHPC overturned those rulings, stating that the US trademark registration and a Chinese copyright registration (that was filed after filing of the disputed mark) were not sufficient to prove prior copyright.[ii]

Gregory applied for retrial of the case at the SPC. In 2020, the SPC made a final judgment, confirming that Gregory owned copyright in the logo, taking into consideration Gregory’s US trademark registration, along with other evidence.[iii] In particular, the SPC cited the following evidence:

  • the China copyright registration of the Gregory mountain logo showing that Gregory had obtained the copyright via assignment (although the copyright was registered after the filing of the disputed mark, the SPC saw it as part of the chain of evidence establishing copyright);
  • copyright agreements and declarations in relation to the creation and acquisition of the copyrighted work;
  • webpages showing use of the Gregory mountain logo by Gregory and its predecessor from 2000 to 2014 (notarized and legalized, submitted with translation);
  • product labels showing prior public use of the Gregory mountain logo by Gregory’s predecessor (notarized and legalized, submitted with translation);
  • publications showing prior public use of the Gregory mountain logo by Gregory (notarized and legalized, submitted with translation); and
  • introduction of the history of the Gregory mountain logo from a book published in May 2007.
Analysis

As mentioned, to support its copyright claims, Gregory provided a copy of its prior US trademark registration and a Chinese copyright registration.

The BHPC held that:

  • a trademark registration or a trademark gazette only indicates that the rights holder is the owner of relevant trademark rights but cannot be used to prove authorship of a copyright; and
  • the copyright registration was obtained after the filing of the disputed mark and was therefore not proof of prior copyright.

In China, there is no substantive review of copyright applications. If an application meets formality requirements, registration will generally be granted. Copyright registrations therefore provide prima facie proof of copyright, but given the lack of substantive review in the examination process, they can be readily rebutted.

In the Gregory case, the respondent Sanliya had obtained its own copyright registration to neutralize Gregory’s copyright.

In the 2020 judgment, the SPC overturned the BHPC’s ruling on the evidential value of trademark registrations in proving copyright ownership. The language it used was “the US trademark registration constituted preliminary evidence that can be used to confirm that it is an interested party that is entitled to claim copyright over the logo”.

The SPC reasoned as follows:

  • In 2017, after the BHPC’s decision was made, the SPC issued Provisions of the Supreme People’s Court on Several Issues concerning the Trial of Administrative Cases involving Trademark Authorization and Confirmation (the 2017 Provisions), in which it stated:

Where a party claims that a disputed trademark damages its prior copyright, the people’s court shall, under the Copyright Law and other relevant provisions, examine whether the subject claimed constitutes a production, whether the party is a copyright owner, or whether another interested party having the right to claim for copyright and the disputed trademark infringe upon the copyright.[iv]

This provision was cited in the 2020 judgment. The language of the provision is very delicate. It does not contradict the courts’ earlier rulings that trademark registrations do not necessarily prove ownership of copyrights, but only confirmed that the trademark holder “was an interested party”. Nonetheless, it clearly confirmed the evidentiary value of prior trademark registrations in proving copyright ownership claims, rather than denying it completely.

  • In addition to the prior US trademark registration, Gregory provided additional evidence relating to Gregory’s acquisition of the copyrighted work and prior use of the work in US.
Comparison with previous cases

In an earlier judgment in October 2017 (also after implementation of the 2017 Provisions) in relation to a trademark dispute between DAMA SPA and a Chinese company Wenzhou Yijiuliang Optical Co Ltd (Wenzhou Yijiuliang), the SPC held that an early trademark registration with a local copyright registration would be sufficient to prove copyright ownership.[v]

In the Gregory case, the SPC seemed to suggest that additional evidence was required, such as documents relating to the acquisition and use of the copyright work. The difference between the two cases might be that, in the DAMA case, the owner of the disputed mark, namely Wenzhou Yijiuliang, failed to submit any evidence to challenge the copyright claim, while in the Gregory case, Sanliya submitted its own copyright registration to rebut US Gregory’s ownership of the copyright.

Conclusion
  • Based on the Gregory decision, a prior foreign (or domestic) trademark registration is undoubtedly helpful in supporting claims of copyright ownership.
  • However, trademark owners cannot solely rely on a trademark registration in this regard.
  • In fact, a trademark registration is only considered “preliminary evidence” to support the rights holder’s interest in copyright.
  • The trademark owner/copyright owner should still obtain a local copyright registration (the earlier, the better) as well as other corroborating evidence relating to the creation and acquisition of the copyright work.

By Courtney Macintosh and Yijie Zhao

This article originally appeared in the Australian Intellectual Property Law Bulletin, Vol. 33, No. 6.


Endnotes

[i] However, even in those circumstances, cross-class protection is not assured. Each case is judged by its individual merits, and on the evidence presented by the parties.
[ii] Beijing High People’s Court Final Administrative Judgment No. 2902 (2016).
[iii] Supreme People’s Court Administrative Retrial Judgment No. 79 (2018).
[iv] Article 19 of the Provisions of the Supreme People’s Court on Several Issues concerning the Trial of Administrative Cases involving Trademark Authorization and Confirmation.
[v] Supreme People’s Court of the People’s Republic of China Administrative Retrial Judgment No. 7174 (2017).