May 10, 2016

Facebook Succeeds in China Trade Mark Case

Facebook has won an interesting trade mark case in China, despite being banned from operating in the country.

Chinese company, Zhujian Beverage (Zhujian), which sells porridges, milk-flavoured drinks and other snacks, had registered "lian shu" (or "face book") in classes including teas, drinks and confectionary. The application was filed in 2011 and, despite two unsuccessful opposition proceedings by Facebook, granted in 2014.

However, in the present case Facebook was successful and the Court determined that Zhujian's labelling their products 'face book' was an 'obvious act of copying and harmed fair market competition', and that the registration would be revoked. The decision by the Court is particularly interesting because Facebook is currently blocked to China's 700 million internet users, and has led to speculation that Facebook could be unblocked and that China's strict stance towards the social media platform may be relaxed. China also prevents various other foreign website being accessed in the world's most populous country.

The trade mark registration system in China operates on a 'first to file' basis. Some Chinese businesses target high profile foreign brands and register them as their own in China. This practice has been referred to as trade mark hijacking/squatting or bad-faith filing. The owners of hijacked brands are then realistically left with the options of litigating in the Chinese courts or paying money to buy back the trade mark from those Chinese companies.

In trademark disputes even companies with a globally recognised brand must prove it is also well known within China. Just last week, Apple Inc. lost a legal battle to prevent a domestic company Xintong Tiandi from using the 'iPhone' trade mark on leather goods in China.

in: News, Trade Marks

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