Trademark Nonuse/In Use Investigations- USA v. China

Trademark protection had long afforded American companies a competitive marketplace with a fair playing field. All that can change as you begin to operate your business internationally.  To get the basics, visit the United States Patent and Trademark Office to orient yourself on what you need to know to get started on protecting your intellectual property.

In the United States, the most common reason to launch into a trademark in-use investigation is to determine if the mark is in fact being used in commerce, how it is being used and the date of first use.  Further it is important to know when the mark was first used in commerce, how it was and is being used, the scope of the use, the goods or services it is being used on and if it is no longer in use (abandonment) when did the use cease.

Protecting IP in China

For those businesses venturing out to the rapidly growing economy of China, it is necessary to look at the role that in-use or nonuse trademark investigations are conducted in China. Trademark  use investigations have been an important and necessary practice in the United States for quite some time, but that may change outside of our borders.  The U.S. is a first to use, not first to file country, which means that “common law” uses of a mark need to be uncovered and investigated.  In order to effectively conduct searches and investigations in China it is essential that your investigation partner has access to databases compiled via advanced web harvesting of unstructured data, which allows an investigative analyst to leapfrog from a single source dependency to run more cost effective searches with greater cost efficiency.

Abandoned Marks and Squatters

A mark is considered abandoned when it’s use has been discontinued with no intent to resume (See 15 U.S.C. § 1127).  In China there are similar laws and the courts have provisions that indicate the breadth of the search that must be conducted to determine nonuse.

According to Anthony Tong of Robin Bridge & John Liu in Hong Kong, when faced with a refusal on relative grounds in China, it is prudent to search popular Web portals such as sina.com.cn and baidu.com.cn to look for references to the cited mark. Unless the searching turns up many references, a nonuse application is often recommended because it is an inexpensive approach. Indeed, Tong posits that investigations are not even particularly necessary because the burden of proof is on the trademark owner, exhaustive searching is near impossible given the size of China, and it is not uncommon to find trademark owners submitting dubious evidence of use even where investigation proves nonuse.

In the U.S. we have squatters that sit on domain names hoping to make money when the brand owner or mark owner wants the digital rights to their name.  In the coming years in China, mark owners will have to prove use of their mark(s) if they want to prevent losing them due to nonuse.  That said nonuse investigations in China will likely be more common in the future.

Help Protecting Your IP Abroad

It is vital that you evaluate the use of your intellectual property not only within your country of origin, but also protect your rights abroad. Start by selecting an investigator with worldwide to avoid issues that can escalate costs and increase the time required to provide verified information.  James Tunkey, COO of I-OnAsia points out that, “Today’s brand protection spend in China is less expensive that in the US on an apples-to-apples basis.”  Tunkey adds, “It is also important to note that Chinese targets are typically manufacturers and the weighted ROI on China spend is greater than it would be in the US.”

For those with an eye on China, our partner I-OnAsia gives us boots on the ground with relationships and information sources that are trusted and quick to respond. Start your IP protection plan by contacting us.

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