Yijia fends off legal challenge to its exported Creston products

The Beijing High People's Court has ruled in favor of a Chinese company in a recent dispute, recognizing that export authorizes statutory trademark use.

Yijia, a foreign trade company in Zhangjiagang, Jiangsu province, registered the disputed trademark, Creston, in China in March 2010. It was used on Class Nine products, such as measurement tools.

German supermarket chain Aldi applied to the Trademark Office for revocation of the trademark. They claimed that the trademark was not in use during three consecutive years starting from March 2012. The request was rejected.

According to the Trademark Law, a registered trademark can be revoked if it is not in use for three consecutive years.

In January 2016, Aldi filed with the then Trademark Review and Adjudication Board, still challenging the trademark's use.

The board, which has later been integrated into the National Intellectual Property Administration, supported the trademark office's decision. It said that the documents presented by Yijia, including correspondences, supply contracts, customs declarations and promotional literature for exhibitions and conferences, had formed a chain of evidence. It proved that the trademark's use met statutory requirements.

Aldi then took the issue to the Beijing Intellectual Property Court. But the court ruled against it.

As a result, Aldi lodged an appeal with the Beijing High People's Court. They alleged that the evidence from Yijia only showed that the Chinese company was commissioned by overseas clients to provide products carrying the Creston trademark. But it cannot prove that the trademarked products were sold on the domestic market, they claimed.

The high court said that although the evidence showed that the products were for export, Yijia had the intention to use the trademark in question. It has made this known to the public via advertising, so its act ions were in accordance with the Trademark Law.

The provision of trademark revocation for nonuse for three consecutive years is to encourage commercial use and get rid of layoff registrations, according to the appeal court.

The revocation would result in an inability to honor the export contracts, with Yijia losing the trademark despite using it. The result would contradict with policy encouraging trade and with the purpose of the revocation provision, the judges said. They upheld the verdict of the previous court ruling.

Jia Hong, an attorney from L&H Law Firm, told the China Intellectual Property News that a registered trademark cannot realize its value if it is laid off for a long period.

The layoff would prevent other filers applying for and using the same or similar trademarks, Jia added. He noted that is why the Trademark Law stipulates the revocation provision in the case of nonuse for three consecutive years.

In this case, the exported products were produced and sold in China and the overseas client would identify the shipment via the trademark. Therefore the trademark has worked to distinguish the products, he said.

While the end consumers of the exports are abroad, the trademark still plays a distinguishing role in distribution in China, he added.

(Source: China Daily)