Serena Nath is an IPilogue Writer and a 2L JD candidate at Osgoode Hall Law School.
After a lengthy 22-year trademark battle with Chinese businessman Fang Yuzhou, London-born shoe company Manolo Blahnik has won the legal right to use their name in China. Manolos have never been sold in mainland China because Yuzhou registered the trademark “Manolo & Blahnik” in 1999 in China. If Manolo Blahnik had attempted to sell their shoes in China, they would likely face legal consequences from Yuzhou and be unable to fight counterfeit products sold there. In the subsequent two decades, Manolo Blahnik repeatedly appealed the decision. However, these appeals were dismissed as the courts ruled that Manolo did not present sufficient evidence of adequate sales in mainland China prior to 2000. Resultantly, Manolo Blahnik has lost significant sales, as China is the fastest growing luxury market.
China’s Trademark System
Historically, China’s trademark system was based on a “first to file” rule, meaning that the exclusive right of a trademark is awarded to the registrant who first applies. As such, no prior use, good faith, or intention for real use of the trademark is required to acquire the exclusive rights over a trademark. Here, although Yuzhou had no intention to use the registered trademark, because he had applied before Manolo Blahnik, and was hence awarded exclusive rights to use the trademark “Manolo & Blahnik.” This is in direct contrast to other jurisdictions, such as Canada, where the exclusive right to a trademark is not necessarily awarded to the first registrant, and prior use or intention to use is considered. However, in 2019 amendments to China’s trademark legislation resulted in drastic changes for trademark disputes.
The 2019 amendments focused on “bad-faith” trademark filings, specifically stating that “[a]pplications made in bad faith for trademark registrations that are not intended for use shall be rejected.” Additionally, trademark agencies are prohibited from representing clients if the agency is aware that it is a “bad-faith” filing, and the penalty for filing a “bad-faith” trademark is either warning or fine. Based on these amendments, then, the Supreme People’s Court of China finally ruled in Manolo Blahnik’s favour.
Future Implications of Trademark Legislation Amendments
The 2019 amendments will likely aid in fighting against “bad-faith” filings. However, as observed with the Manolo Blahnik case, the amendments are also likely to ensure increased brand protection for foreign entities who otherwise are not able to register trademarks due to the “first to file” rule. Some examples of the amendments resulting in victories for foreign companies include a lawsuit won by athletic apparel and footwear manufacturer New Balance, and another won by former NBA star Michael Jordan, where Chinese companies imitated and used these entities’ logos. Despite recent victories, some foreign companies still face an uphill battle. In 2021, Japanese retailer Muji lost a trademark infringement case against a “copycat” Chinese company. It is clear that further amendments are still necessary to overcome the “first to file” rule.