- General Mills Wins Six-Year Battle Against Chinese Trademark Squatter
- August 5, 2015 | Authors: Thomas Telesca; Gracie C. Wright
- Law Firm: Ruskin Moscou Faltischek, P.C. - Uniondale Office
On July 6, 2015, General Mills, the United States multinational company that manufactures and markets consumer goods such as Betty Crocker, Totino’s, Pillsbury, Cheerios, and Lucky Charms, to name a few, obtained a significant victory in the Beijing High Court against a trademark squatter. In an article published in the Hauppauge Reporter in March 2015, we warned that failing to register your trademark in China opens businesses up to protracted and expensive litigation against trademark squatters - those who register your trademark in China before you do. General Mills’ win in the Beijing High Court marks a success against these squatters, but the cost of success still warrants the recommended best practice to register your mark in China as soon as possible to circumvent a similar six-year battle against a trademark squatter.
In the General Mills case, a caterer in Zhongshan, Guangdong Province filed an application in 2000 for the registration of a trademark depicting “Wanchai Ferry” - a line of frozen Chinese-food dinners owned by General Mills. On June 21, 2001, the trademark was approved for registration by the China Trademark Office (“CTMO”), and on August 13, 2009, the trademark was assigned to an individual named Cheng Chao.
On August 21, 2009, General Mills applied to cancel Mr. Chao’s trademark registration, arguing that the trademark had not been used for three consecutive years pursuant to Article 44.4 of the Trademark Law of 2001. On October 17, 2011, the CTMO cancelled Mr. Chao’s trademark registration, and on December 5, 2011, Mr. Chao appealed to the Trademark Review and Adjudication Board (“TRAB”). The TRAB upheld the CTMO’s cancellation, finding that Mr. Chao failed to establish that the mark had been used in commerce. The TRAB agreed with the CTMO that the trademark had not been used for three consecutive years for purposes of Chinese Trademark Law. Mr. Chao then appealed to the Beijing Number 1 Intermediate Court, and on April 18, 2014, the Intermediate Court reversed the TRAB’s decision. General Mills was then forced to appeal to the Beijing High Court to avoid the possibility of having to pay Mr. Chao a licensing fee to use its own trademark.
The Beijing High Court agreed with the CTMO and the TRAB and Mr. Chao’s registration was cancelled. Specifically, the High Court held that Mr. Chao failed to set forth sufficient evidence to prove the trademark had been used in commerce during a three-year period. Notably, the High Court also found that Mr. Chao had registered more than 50 trademarks that were either identical or similar to well-known trademarks of others. This demonstrated that Mr. Chao filed these trademark applications without the intention to use the marks in commerce as required by Article 44.4. Mr. Chao was clearly a trademark squatter.
Although the High Court upheld the original decision of the CTMO and cancelled Mr. Chao’s trademark registration, not all U.S. businesses will have the economic might to wage a war like General Mills. The smart business decision is to register your trademark in China to avoid the need to litigate there.