Looking back on Viet Nam’s Victory in Cancelling Validity of the Trademarks “Buon Ma Thuot” Appropriated in China? (Part 2) | Looking back on Viet Nam’s Victory in Cancelling Validity of the Trademarks “Buon Ma Thuot” Appropriated in China Part 2 1335

By Le Quang Vinh, Senior Partner

Translated by Nguyen Thanh Hang

Evaluating the possibility of winning in a lawsuit to cancel two trademarks Buon Ma Thuot under the Chinese Trademark Law

a. The Capacity of Filing a Lawsuit

According to the provisions of Article 41 of Trademark Law of the People's Republic of China 2001 (paragraphs 1 and 2), any organization, individual or trademark owner or any interested party may have the right to request the cancellation of two trademarks “Buon Ma Thuot coffee” with the registration numbers: 7611987 and 7970830. In other words, the Dak Lak People's Committee, the Buon Ma Thuot Coffee Association or any member that is allowed to use GI “Buon Ma Thuot coffee” are both entitled to request the cancellation of two trademarks mentioned above.

On the other hand, because the Dak Lak People's Committee has issued Offical Letter No. 5062/UBND-TH authorizing the Buon Ma Thuot Coffee Association (the Association) to participate in the procedures in the capacity as the petitioner of the lawsuit and international registration of the brand “Buon Ma Thuot coffee”, therefore the Association as the petitioner for cancellation in China is in accordance with the Chinese Trademark Law.

According to Article 12 of the Rules for Trademark Review and Adjudication, issued on September 17, 2002 by the Ministry of Commerce of China (the "Rule"), a foreign person or enterprise attending to the cancellation of registered trademarks who does not have his/her or its habitual residence or place of business in China shall entrust a trademark agency authorized by the State and having the qualifications on behalf of themselves to file a lawsuit.

b. The Issue of Statute of Limitations

The statute of limitations for lawsuits is a very important issue in the litigation in general and in China in particular, because the Trademark Review and Adjudication Board shall only accept the petition (if it refers to articles relating to the time limit filing a petition) submitted within the prescribed time limit. For example, Article 16 of Trademark Law of the People's Republic of China 2001 shall only be applied if the Association files a lawsuit petition to the Trademark Review and Adjudication Board before November 13, 2015 and June 13, 2016 respectively.

Because Article 16 of the Chinese Trademark Law is directly related to the act of trademark registration which conflicts with the geographical indications of others, so we have determined that this is one of the most important legal grounds that the Association should be noted and invoked to apply.

c. Overview on the Trademark Review and Adjudication Board and Dispute Resolution Procedure

The Trademark Review and Adjudication Board ("TRAB") is an agency under the Ministry of Commerce of China and it is completely independent from the China Trademark Office ("CTMO") – that granted the registration of two “Buon Ma Thuot” trademarks for Guangzhou Buon Ma Thuot Coffee Co., Ltd.

Under the Trademark Law of the People's Republic of China 2001, the Regulations governing the implementation of this Law and the Rule, the TRAB is responsible for handling and resolving trademark disputes, including disputes concerning to the cancellation of the registered trademark defined in Article 41 of the Trademark Law 2001.

TRAB must adjudicate trademark disputes in written form, on the basis of evidences of the parties and must comply with applicable law, dispute parties to the case have equal rights and all evidences, grounds, argument must be expressed in writing.

In accordance with Articles 23 and 24 of the Rule, dispute parties have the right to supplement the relevant evidence materials but such supplementation must be no later than three months from the day of submitting the application form with the applicant/plaintiff or within 3 months from the date on which the defendant received a written notice from TRAB about plaintiff's request for cancellation of trademark.

Depending on the complexity of the case, TRAB may establish a panel of only one or three experts with the same authority, and in some cases the panel may have more than three experts. This panel’s formation shall promptly inform the parties concerned by written form. Article 45 of the Rule also notes that the trial may be public at the request of the parties concerned or based on the actual needs of the case.

The evidence rules are set out in Chapter V, in which evidence shall include documentary evidence, physical evidence, audio visual reference materials, testimony of the witnesses, statements of the parties, and appraisal conclusions, etc. Some evidences that are not required to prove such as the facts known to all; the facts concluded pursuant to law; the facts proved in accordance with law; the facts concluded on the basis of daily life experience; other facts that need not be proved by evidence in accordance with law. (Article 75).

All written evidence must be original, in case of failure to provide the original, a certified copy of the original must be provided. All documents provided in foreign languages, which is stipulated to be valid, must be translated into Chinese when submitted to TRAB (Article 82).

According to the Article 95 of the Rule, TRAB may determine the probative force of several pieces of evidence according to the following principles: (i) the official documents produced by state organs and other functional departments based on their powers shall be prior to other documentary evidence; (ii) the appraisal conclusions, archive materials, and documentary evidence that have been notarized or registered shall be prior to other documentary evidence, audiovisual reference materials and testimony of witnesses; (iii) the original document or article shall be prior to the copy or duplication ...

Statistics from China in 2009 show that TRAB handled a total of 37,002 complaint files, including 28,594 complaint petitions related to denial of protection. However, due to the increasing number of complaint petitions and the request for cancellation has been increasing, so the fact remains that it may take 24 - 36 months for TRAB to issue a decision resolving the request for cancellation of a trademark.

According to Article 43 of the Trademark Law of the People's Republic of China 2001, in the case that TRAB has made a ruling but one of the parties is dissatisfied with such ruling, within 30 days from the date the notification is received, such party is entitled to bring a suit in a People's Court.

Thus, the whole process of the TRAB trial is essentially an administrative complaint and the decision of the TRAB have the nature of administrative decision (similar to the Vietnamese law, it can be the subject of trial in the court system).

d. Evaluating the Legal Grounds and Evidences in Support of the Cancellation Claim

From the comprehensive evaluation and analysis of the legal aspects of international law and Chinese lawmentioned above, we found that the following legal bases are in favor of the Association:

(i) Buon Ma Thuot is the Geographical Name of Vietnam and it is Widely Known by the Public

Article 10 of the Chinese Trademark Law defines two conditions for the grant of a trademark registration to be refused, including, foreign geographical names, and widely known by the public, whereby we may provide assistance to the Association with the aim of collecting evidence and proofing through the following points:

Buon Ma Thuot is a famous place because it is a city of Dak Lak province, Vietnam and has a long history;
Buon Ma Thuot is the capital of Vietnamese coffee, where coffee cultivation and coffee output account for nearly 50% of the country;
Buon Ma Thuot accounts for nearly 50% of the country's coffee export output and it is exported to over 50 territories all around the world;
China is one of the 10 biggest coffee importers of Vietnam, including Buon Ma Thuot coffee. Vietnam always ranks second in the world among the largest coffee exporting countries, with export turnover of more than 2 billionUSD per year;
Evidence and other information confirmed by international organizations, coffee associations, manufacturers, large-scale processing facilities, international exhibitions, etc relating to Buon Ma Thuot to prove that Buon Ma Thuot can not be ignored by the Chinese public;
Buon Ma Thuot is not another meaningful word in Chinese or a Chinese place.

(ii) Buon Ma Thuot Has Been a Protected Geographical Indication in Viet Nam since 2005

In the spirit of Article 16 of the Chinese Trademark Law, the Association can easily prove the following aspects:

1. The two Buon Ma Thuot trademarks of Guangzhou Buon Ma Thuot Coffee Co.,Ltd, which are registered under No. 7611987 and 7970830 (as mentioned in Section I of this proposal), clearly and obviously contain Buon Ma Thuot Geographical Indication of Vietnam;

2. The list of goods in class 30 covered by the registrations No. 7611987 and 7970830 includes coffee and other products related to coffee, so such goods is directly related to coffee and other coffee products bearing Buon Ma Thuot geographical indication protected in Vietnam;

3. Guangzhou Buon Ma Thuot Coffee Co.,Ltd is not a Vietnamese enterprise, not a member of the Association as well as there is no a head office in Buon Ma Thuot; therefore, that assumes, as this company attaches one of the above Buon Ma Thuot trademarks to coffee products or transaction papers or advertising media to offer Buon Ma Thuot coffee products, the public and customers could be clearly mistaken that it is Buon Ma Thuot coffee, originating from Buon Ma Thuot. In other words, of course, such use would mislead the public as to the true origin of the product and, therefore, these two marks should be refused the protection and prohibited from use.

4. Buon Ma Thuot for coffee is protected in Vietnam as a geographical indication from October 14, 2005 under Decision No. 806/QĐ-SHTT. Buon Ma Thuot Geographical Indication is the property of Vietnam, therefore, the deliberate registration of 02 Buon Ma Thuot trademarks by Guangzhou Buon Ma Thuot Coffee Co.,Ltd is the infringement of Vietnam’s property, the impersonation of Vietnam, misleading the public about the commercial origin, historical value, cultural value of Buon Ma Thuot land - famous in the world for coffee.

5. Intentional registration of two Buon Ma Thuot trademarks is contrary to honest practices stated in the Paris Convention, the TRIPs Agreement and the Trademark Law of the People's Republic of China 2001 as analyzed above.

6. In terms of "goodwill" or "good faith" as defined in the last paragraph of Article 16 of the Chinese Trademark Law, if Guangzhou Buon Ma Thuot Coffee Co.,Ltd adduces and makes counter-claims in this respect, the Association may refute this argument (if any) on the basis of the following grounds:

Good faith is an abstract and comprehensive term that encompasses a sincere belief or motive without any malice or the desire to defraud others.[4] Article 7(1)[5] of the United Nations Convention on Contracts for the International Sales of Goods 1980 (CISG) also defined the good faith, widely commented by many scholars, which basically has the same meaning [6]. Article 6ter.1 (c) of the Paris Convention, Article 24.5 of the TRIPs Agreement contains the Good Faith provision, especially Article 24.5 of the TRIPs Agreement provides: where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either:

- Before the date of application of these provisions in that Member as defined in Part VI; or

- Before the geographical indication is protected in its country of origin.

measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.

China has been a member of the WTO since December 11, 2001, even in the case of application of the exception in Article 24.5 referred to Article 65.1.2.3 of the TRIPs Agreement, there is no ground for the application of "Good Faith" under the last paragraph of Article 16 of the Chinese Trademark Law because it has passed the transitional period and Buon Ma Thuot geographical indication have been protected in Vietnam since 2005.

On the other hand, as demonstrated and analyzed above, the act of Guangzhou Buon Ma Thuot Coffee Co.,Ltd is clearly and indisputably bearing the nature of dishonest acts, to deceive the Trademark Office, the public and to mislead the public as to the true origin of Buon Ma Thuot coffee, and of course be regarded as an act in contrast with honest practices in international trade, contrary to the principle stated in the Chinese Trademark Law, or to put it another way, this act is clearly and obviously considered as the "Bad Faith" act, in opposition to the "Good Faith" principle of the international conventions and Chinese laws.

In addition to the above legal grounds, the Association may also apply and supplement the following legal basis:

(iii) The Deliberate Registration of 02 Buon Ma Thuot trademarks by Guangzhou Buon Ma Thuot Coffee Co.,Ltd is an Act of Bad Faith in Violation of the Principles Stipulated in Article 31 of the Chinese Trademark Law.

- Article 31 of the Chinese Trademark Law states that an application for the registration of a trademark shall not create any prejudice to the prior right of another person, nor unfair means be used to pre-emptively register the trademark of some reputation another person has used.

- According to the practice of trademark dispute resolution in China, we believe that we can supply materials and prove the ground in the following aspects: (i) Buon Ma Thuot Geographical Indication that have been and are being used and have acquired certain influence (reputation) in China before the filing date of August 11, 2009 and January 5, 2010 (the dates on which Guangzhou Buon Ma Thuot Coffee Co.,Ltd filed the application to CTMO), these two trademarks, of course, is clearly and indisputably similar to the Buon Ma Thuot Geographical Indication of Vietnam, (iii) the goods bearing two counterfeit trademarks is identical with or similar to coffee products bearing the protected geographical indication - Buon Ma Thuot of Viet Nam and (iv) Guangzhou Buon Ma Thuot Coffee Co., Ltd had an act in bad faith;

- Evidence (collected before the date of August 11, 2009) to support the above points may include: evidence to prove the public perception of the mark (people involved in coffee products), evidence referring to the time, history of use and geographical area using the Buon Ma Thuot indication, evidence to prove the time, manner, scope and geographical area related to the promotion of Buon Ma Thuot geographical indication, other evidence to prove the reputation of Buon Ma Thuot geographical indication in China.

- Regarding the proof of the act in bad faith of Guangzhou Buon Ma Thuot Coffee Co., Ltd, we came to see that, in accordance with the principle of Article 10bis of the Paris Convention, all acts, such as, intentionally misleading the public as to the trade origin (the origin of the goods), using indications misleading the public as to the nature, the characteristics, are considered as the acts contrary to honest practices in international trade (i.e., bad faith), and there is clearly sufficient evidence to prove that such act is in bad faith under Article 31 of the Chinese Trademark Law.

(iv) 02 Buon Ma Thuot Trademarks Must be Canceled and Prohibited from Use due to Infringement of Article 15 of the Chinese Trademark Law.

Article 15 of the Chinese Trademark Law 2001 states that "Where any agent or representative registers, in its or his own name, the trademark of a person for whom it or he acts as the agent or representative without authorization therefrom, and the latter raises opposition, the trademark shall be rejected for registration and prohibited from use"

According to Opinions of the Supreme People's Court　of　April　20,　2010,　on Several Issues Concerning the Trial of Administrative Cases Involving the Authorization and Determination of Trademark Rights, the term "Agents" or "Representative" is understood in the broad sense, accordingly any agent or representative of a trademark or any agent or representative in the sense of distribution or sales thereof registers, in its or his own name, the trademark of the principal or the represented without authorization therefrom, the People's Court shall decide that the trademark is maliciously registered by the agent or representative. In adjudicative practice, some malicious registration behaviors occur during the formation of the agency or representative relations, that is to say that they occur before the agency or representative relations are established, the people's courts shall also deem such behaviors as malicious registration by agents or representatives. And given that, the identified act is within the scope of the prohibition contained in Article 15 of the Chinese Trademark Law 2001.

According to the Tien Phong newspaper dated 16/09/2011 entitled "Why Vietnam loses two famous coffee brands," Nguyen Van Thang, import-export management officer of An Thai Coffee Company stated that An Thai Company had a business relationship with Guangzhou Buon Ma Thuot Coffee Co., Ltd. In order to build reputation, the company in Guangzhou asked the association with An Thai Company to import “3 in 1 coffee” for a long time. But for unknown reasons they only entered 3 containers and then stopped.

Information from An Thai Company can be exploited to clarify the relationship between Guangzhou Buon Ma Thuot Coffee Co., Ltd and An Thai Coffee Company via email, contract, exchange and other documents to prove and apply the prohibition in Article 15 of the Chinese Trademark Law.

Apart from the main task of requesting the cancellation of two Buon Ma Thuot trademarks illegally registered, the Association should pay attention to the research and take necessary legal measures to require the competent agency of China to force Guangzhou Buon Ma Thuot Coffee Co., Ltd to remove the phrase "Buon Ma Thuot" in the name of this company in oder to avoid any misunderstanding about the origin of Buon Ma Thuot coffee of Vietnam.

In conclusion, with the above analysis, we are convinced that the Association has sufficient legal basis to win before the TRAB.

Bross & Partners, a renowned and qualified Patent, Design, Trademark and Copyright agent of Vietnam, constantly ranked and recommended by the Managing Intellectual Property (MIP), World Trademark Review (WTR), Legal 500 Asia Pacific, AsiaLaw Profiles, Asia IP and Asian Legal Business, is providing clients all over the world with the reliable, affordable contentious and non-contentious IP services including IP-related filing and prosecution, enforcement, anti-counterfeiting, litigation and domain name. For further discussion, please get in touch with us at vinh@bross.vn or 84-903 287 057

[4] See the online legal dictionary at the link: http://legal-dictionary.thefreedictionary.com/good+faith

[5] The original in English: Article 7(1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.

[6] See the article by Troy Keily scholar at: http://www.cisg.law.pace.edu/cisg/biblio/keily.html#faith