Path 1 for Rights Protection Against Malicious Registered Trademarks: Instituting Civil Litigation Based on Prior Rights
Introduction When an enterprise suffers malicious trademark squatting, where the registered trademark illicitly employs the enterprise’s original artistic patterns, calligraphic fonts and other prior works, most right holders will firstly resort to administrative procedures including trademark opposition and invalidation declaration. However, such administrative procedures are subject to the five-year statute of repose, and the administrative remedy channel will be permanently closed once the time limit expires. The judicial interpretations of the Supreme People’s Court set forth a crucial remedy route: even if the opposing trademark has been legally registered, the right holder may directly file a civil lawsuit for rights protection on condition that the text and graphics of the trademark infringe prior rights such as copyright, design patent right and enterprise name right, and such civil litigation shall not be subject to the five-year time limit for trademark invalidation. Drawing upon typical cases of the Shanghai Intellectual Property Court and retrial guiding cases issued by the Supreme People’s Court, Shanghai Boxiang Law Firm elaborates on the complete logic of civil litigation-based rights protection, defines the identification rules of prior rights, the dividing line between administrative and judicial procedures, as well as judicial adjudication criteria for the abuse of rights arising from malicious registration, and delivers a long-term rights protection scheme unrestricted by trademark registration tenure for brand owners. Ⅰ. Core Statutory Basis Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Civil Disputes Involving Conflicts Between Registered Trademarks, Enterprise Names and Prior Rights (Revised in 2020), Article 1Where a plaintiff files a lawsuit on the ground that the words, graphics and other elements adopted in another party’s registered trademark infringe upon its prior rights including copyright, design patent right and enterprise name right, and such lawsuit satisfies the provisions of Article 119 of the Civil Procedure Law of the People's Republic of China, the people's court shall accept the case. 1.A registered trademark does not serve as a legal immunity shield. The exclusive right to use a trademark shall only be exercised within the scope that complies with laws and does not infringe upon others’ legitimate prior rights. 2.Civil infringement litigation targets actual market use acts, which differs from trademark administrative confirmation proceedings; the two procedures can be carried out concurrently without conflict. 3.Administrative invalidation proceedings are subject to the five-year time limit prescribed in Article 45 of the Trademark Law of the People's Republic of China, while civil litigation is not subject to such time restriction. II. Case 1: Calabash Brothers Case | Shanghai Intellectual Property Court, Case No. (2021) Hu73 MinZhong No.62 Case Overview Shanghai Animation Film Studio (SAFS) holds the complete copyright in the artistic works featuring the classic "Calabash Brothers" characters. The creation and publication date of such works are far earlier than the filing date of Registered Trademark No. 631343 owned by Shijiazhuang Calabash Brothers Food Co., Ltd., and these artistic works enjoy extremely high nationwide popularity. After the food company registered the disputed graphic trademark, it extensively used the Calabash Brothers character images in product promotion and e-commerce pages. Instead of filing administrative proceedings for trademark invalidation, SAFS directly instituted civil litigation for copyright infringement. The defendant argued that it held a legally registered trademark, and its use of the trademark within the approved scope constituted legitimate exercise of trademark rights without infringement, so the court should dismiss the case. 1.The court accepted the case in accordance with the law: SAFS filed the lawsuit targeting the defendant’s actual commercial use of the trademark graphics, which fell within the scope of civil copyright disputes and satisfied the acceptance requirements for civil litigation. 2.Trademark rights do not grant absolute freedom of use: Even a registered trademark shall not be used to infringe others’ prior copyrights; the court has the authority to order cessation of such infringing use. 3.Establishment of prior rights: The Calabash Brothers artistic works were created and published prior to the trademark filing date and gained high public recognition, thus constituting legally recognized prior rights. 4.Finding of substantial similarity: The disputed trademark only features trivial differences in hand postures and gourd leaf size, while fully retaining all original and distinctive creative elements including square faces, thick short eyebrows, large eyes, gourd-shaped headwear, leaf collars and waistcoats, hence it is substantially similar to the original work. 5.Determination of infringement: The defendant’s publication of the graphic on product promotion channels and online platforms constituted the right of communication through information network exclusively controlled by the copyright owner, amounting to copyright infringement. The court ordered Shijiazhuang Calabash Brothers Food Co., Ltd. to immediately cease its infringement upon SAFS’ right of communication through information network in respect of the Calabash Brothers artwork. The defendant filed an appeal, and the court of second instance dismissed the appeal and upheld the original judgment. Well-known artistic images and animation character designs enjoy strong protection as prior copyrights. Right holders may directly sue against market use without first applying for trademark cancellation. Minor local discrepancies cannot negate the finding of overall substantial similarity, and trademark registration cannot bar rights protection based on prior copyrights. Ⅱ. Case 2: Yipinshi Case | The Supreme People’s Court, Case No. (2021) SPC MinZai No. 30 (Benchmark Retrial Guiding Case) The case went through the complete judicial procedure: dismissal at first instance, affirmation on appeal, and judgment revision upon retrial by the Supreme People’s Court. It clearly defines the boundary between the five-year time limit applicable to administrative trademark procedures and civil litigation, and clarifies two pivotal judicial rules: the copyright identification for secondary creation based on public fonts, and the determination that malicious trademark registration constitutes abuse of rights. Basic Case Review 1.Qingdao Cuckoo Electronics Co., Ltd. owns the copyright of the calligraphic artwork featuring the Chinese characters "Yipinshi". Derived from the public-domain Chusa Calligraphic Style, the work gains independent originality through personalized selection, layout and character combination. It was publicly released in South Korea in 2006 and exhibited at the China Import and Export Fair in China in 2007. 2.Zheng Jianhong registered two word trademarks "Yipinshi" in 2010 and licensed Zhanjiang Yipinshi Electrical Appliance Co., Ltd. to use the trademarks on electric rice cookers. 3.Cuckoo Electronics filed a civil copyright infringement lawsuit in 2017, which was dismissed by both the court of first instance and the court of second instance. The first instance held that the font lacked sufficient originality; the second instance directly refused substantive review on the ground that the lawsuit was filed more than five years after trademark registration. 4.Cuckoo Electronics applied for retrial before the Supreme People’s Court, which delivered landmark revised judgments in two separate cases: firstly, the trademark use constituted infringement of prior copyright; secondly, the registrant’s counter-suit against Cuckoo Electronics for trademark infringement constituted abuse of rights. 1.Secondary creation based on public-domain fonts may still qualify as artistic works.Calligraphic creation commonly draws on traditional fonts from predecessors, and originality shall not be negated merely because materials stem from the public domain. The individual glyphs and overall layout combination of the three characters "Yipinshi" are distinct from the original Chusa Calligraphic Style, and no identical prior public records exist for its integrated styling. Therefore, the work is original expression of the author and protected by the Copyright Law. 2.Infringement is established due to proven access and substantial similarity.Zheng Jianhong once filed applications for similar Korean trademarks, proving reasonable access to Cuckoo Electronics’ publicly released "Yipinshi" calligraphy prior to the trademark filing date. The registered trademark fully copies the original creative elements of the artwork, leading to substantial similarity. Trademark registration cannot serve as a legitimate defense against infringement of prior copyright. 3.The court of second instance committed fundamental error in law application: civil litigation is not subject to the five-year statutory repose period.The five-year limit prescribed in Article 45 of the Trademark Law only applies to administrative trademark invalidation procedures. Civil copyright litigation targeting actual market use is not bound by such statute of repose. Dismissing the lawsuit solely for exceeding the five-year limit constituted wrongful application of law. Retrial Judgment Result: The judgments of first and second instances were revoked. Zheng Jianhong and Zhanjiang Yipinshi Electrical Appliance Co., Ltd. were found liable for copyright infringement, ordered to cease infringement and pay compensation. Relying on the maliciously registered "Yipinshi" trademark, Zheng Jianhong initiated a counterclaim against Cuckoo Electronics for trademark infringement. The Supreme People’s Court delivered core rulings as follows: 1.Cuckoo Electronics’ prior copyright is legally valid, with creation completion date earlier than the disputed trademark filing date. 2.With established access to the prior artwork, Zheng Jianhong copied the original artistic work to apply for trademark registration; such conduct lacks legitimacy and itself constitutes copyright infringement. 3.Filing infringement claims based on trademarks with flawed rights that infringe others’ prior rights violates the principle of good faith, amounts to abuse of rights, and has no legitimate legal basis. Final Retrial Judgment: The judgments of first and second instances were revoked, and all trademark infringement claims filed by Zheng Jianhong and Zhanjiang Yipinshi Electrical Appliance Co., Ltd. were dismissed. IV. Four Core Judicial Rules for Civil Rights Protection Based on Prior Rights (Summary of the Two Precedents) The exclusive right to use a trademark is confined to registered signs on approved designated goods. The exercise of trademark rights is premised on non-infringement upon others’ legitimate prior rights. Where the text and graphics of a trademark copy or imitate others’ prior copyright, design patent rights, enterprise trade names, etc., the court may order the cessation of trademark use even if the trademark has been duly registered. 1.Administrative trademark invalidation procedures: Applications must be filed within five years from trademark registration; the applicant shall lose eligibility once the time limit expires. 2.Civil litigation based on prior rights: Such lawsuits target merchants’ actual online and offline sales, promotional use and judge civil infringement disputes, with no five-year time restriction. It serves as the fallback remedy for malicious trademark squatting beyond the five-year administrative period. 1.Prior copyright: The work shall be created and publicly published prior to the trademark filing date. Works featuring personalized selection, layout and styling adjustments based on public-domain materials shall be deemed original works eligible for copyright protection. 2.Prior design patent right / enterprise name right: The right shall be publicly disclosed and used prior to trademark application, and possess distinctiveness for source identification. 3.Core judgment logic: A valid foundation for rights protection is established where prior rights come into existence earlier and the trademark is copied or imitated afterwards. Where a registered trademark is copied from others’ prior works, and the registrant, aware of the flawed rights foundation, files trademark infringement claims against the original right holder, the court may rule such conduct an abuse of rights in violation of the principle of good faith and dismiss all litigation claims entirely. V. Practical Guidelines for Corporate Brand Compliance and Rights Protection 1.Within the five-year statutory period: File administrative trademark invalidation proceedings and civil litigation concurrently. The administrative procedure aims to cancel the disputed trademark, while civil litigation seeks injunction against use and compensation, so as to achieve dual protection effects. 2.More than five years after trademark registration: Abandon administrative invalidation applications and directly initiate civil lawsuits based on copyright or design patents to pursue liabilities for all online and offline infringing use acts of the infringer. 1.Copyright evidence: design drafts, creation time certification, public release records prior to the trademark filing date, exhibition documents, copyright registration certificates. 2.Fonts & artistic images: comparison statements proving originality, documents distinguishing original creation from public-domain materials, evidence of brand popularity and publicity. 3.Infringement evidence: notarized physical purchases, e-commerce page screenshots, short video promotions, offline store posters, complete evidence of product packaging. 1.Upon completion of new trademark graphics, fonts and cartoon image design, conduct searches for existing prior artistic works and copyrighted fonts in advance. 2.For brand logos commissioned from external designers, sign formal copyright assignment agreements and reserve all original design source files. 3.Conduct intellectual property compliance review before brand VI upgrade, packaging renewal and new product launch, to prevent unintentional plagiarism of prior works and subsequent trademark infringement disputes.Core Interpretation
The Defendant’s Core Defense
Judgement Opinions of the Court of First Instance
Judgment Result
Core Enlightenments from This Case
Part One: Revision Key Points of Copyright Infringement Retrial Judgment
Part Two: Judicial Rules for Derivative Trademark Infringement Litigation (Abuse of Rights)
Rule 1: Trademark Registration Does Not Constitute Absolute Immunity; Prior Rights May Directly Invalidate the Legitimacy of Trademark Use
Rule 2: Civil Litigation and Administrative Trademark Invalidation Procedures Are Independent; Civil Litigation Is Not Subject to the Five-Year Statute of Repose
Rule 3: The Determination of Prior Rights Centers on the Formation Date; Different Rights Adopt Distinct Constitutive Standards
Rule 4: Malicious Trademark Squatting Followed by Counter-infringement Litigation Constitutes Abuse of Rights, and Such Claims Shall Be Dismissed Directly
(I) Combined Application of Dual Remedies When Faced with Malicious Trademark Squatting and Infringement upon Prior Graphic & Text Rights
(II) Preservation of Core Evidence for Prior Rights (Key to Winning Litigation)
(III) Preemptive Brand Risk Prevention: Avoid Infringing Others’ Prior Rights with Self-owned Trademarks
Reminder from Shanghai Boxiang Law Firm
Nowadays, malicious trademark registration and unfair competition acts such as "initiating counter-litigation with registered trademarks" occur frequently. Many brand owners are only familiar with administrative trademark remedies, while ignoring civil litigation, the fallback remedy free from the five-year time limit. Judicial criteria have been clarified through landmark precedents including the Calabash Brothers Case heard by the Shanghai Intellectual Property Court and the Yipinshi Retrial Case ruled by the Supreme People’s Court: legitimate prior rights such as copyright prevail over subsequently registered trademarks. Trademark registration merely serves as an administrative licensing certificate and shall not override others’ prior civil rights. For malicious trademarks registered for more than five years and thus ineligible for administrative invalidation, right holders do not have to abandon rights protection passively. Civil litigation based on prior rights enables claimants to demand cessation of the use of infringing signs, monetary compensation and reimbursement of reasonable litigation expenses. It proves an efficient and long-term solution to curb malicious trademark registration and safeguard legitimate interests of original brands.Intellectual property compliance shall run through the whole cycle of brand design, trademark registration and commercial operation. Only by collecting evidence of prior rights in advance and arranging multi-channel rights protection plans can enterprises build a solid intellectual property defense barrier for their brands.
