At present, opinions differ concerning the meaning of “agent” referred to in Article 15 of the Trademark Law. The trial of this case by the Trademark Review and Adjudication Board (TRAB) is of positive significance to the clarification of the meaning of “agent”. Because the provision of Article 15 of the Trademark Law derives from the content of Article 6 (7) of the Paris Convention for the Protection of Industrial Property, the relevant interpretation of the latter should be taken as a reference in understanding the meaning of “agent”. In this case, although it was Leixun Company, rather than Zheng, the original registrar of the trademark in dispute, and Huang, the assignee of the trademark, that established the agency relationship for distribution with the applicant, OBO Bettermann GmbH & Co., a limited partnership, TRAB offered an extensive interpretation of Article 15 after considering the legislative intent of Article 15 of the Trademark Law and the facts of the case, and rendered an order canceling the registration of the disputed trademark.

I. Facts of the Case 
     Applicant: OBO Bettermann GmbH & Co.
     Applicantee: Huang
     Disputed trademark: No. 1578392 “OBO and graphic”
      (I) Claims of the Parties
     Main claims of the applicant: The applicant was established in 1911, and presently is one of the world’s most famous manufacturers of products with advanced electronic technology. Its products are mainly lightning arresters for electrical sources, and equipment protecting communication networks. The applicant established a worldwide network for manufacturing, distribution and service. The trademark “OBO” and its graphic trademarks of a cartoon character are its own original creation and have been used for a long period of time. They are not only registered in Germany, but are also registered as trademarks in many other countries and regions. Since 1994, Leixun Science & Technology Industry (HK) Co. Ltd. (Leixun Company), a company owned by Zheng, the original registrant of the disputed trademark, established a cooperative relationship with the applicant, and helped the applicant to develop its business in Hong Kong and Macao. In 1997, with the cooperation of both parties, the applicant appointed Leixun Company as the exclusive agent for the sale of the applicant’s products in China. Because Leixun Company was alleged to sell products counterfeiting the applicant’s products, the applicant wrote a letter of inquiry to Leixun Company on February 1, 2000. On February 15, 2000, Leixun Company replied to the letter denying the allegations. During this period, on February 1, 2000, Zheng applied for the registration of the disputed trademark. The applicant formally issued a written notice dissolving the agency relationship between them. In sum, the applicant alleged that the conduct of Zheng, as the agent of the applicant, in preemptively registering the applicant’s trademarks, violated the relevant provision of the Trademark Law, and requested that the disputed trademarks be cancelled.  
     Zheng, the original registrant of the disputed trademark, raised the following defenses: The applicant did not originally create “OBO”. Leixun Company was incorporated in 1997 and the disputed trademark was designed by a Chinese advertisement company authorized by it in 1997, and Leixun registered the copyright for the graphics of the cartoon character. The applicant’s trademark is “OBO BETTERMANN”, and the disputed trademark is not similar to it, so is not a copy or reproduction. Leixun Company began to use “OBO” lightning arresters in China in 1997, and it devoted a great amount of personnel and financial resources to product promotions. Hence, it did not intentionally preemptively register others’ trademarks in order to seek extortionate profits. The evidence produced by the applicant is not sufficient to prove the existence of an agency relationship between them, so it was lawful for Zheng to register the disputed trademark. In sum, it asked the court to affirm the registration of the disputed trademark.
    The party against whom the application was filed (during the trial, Zheng assigned the disputed trademark to Huang, and Huang was the party against whom the application was filed) contended that it was legally assigned the disputed trademark, and at present is the lawful owner of the disputed trademark. Upon investigation and verification by the assignor of the trademark, there is no agency relationship between Zheng and the applicant, and Leixun Company is not the agent of the applicant. The disputed trademark was designed by Zheng and is the senior user. Therefore, Zheng is the legal registrant and the party against whom the application is filed is the legal owner of the trademark. The applicant did not produce evidence showing its use of the disputed trademark in China. The letter of authorization, business card and the promotional booklet of products presented are all invalid evidence, and thus are inadmissible. The certificates showing registration in other countries presented do not conform to the form of evidence, so they shall not be considered. In sum, it asked the court to affirm the registration of the disputed trademark. 
       (II) Adjudication and Decision of TRAB 
      After hearing of the case, TRAB found that the applicant is a German factory manufacturing lightning equipment. In as early as 1981, it registered the “OBO and graphic” trademark for international classification Class 9 lightning rod goods, and in the same year, this trademark was registered in the International Bureau of World Intellectual Property Organization, and the designated territories extended to Australia, Belgium, Holland, Luxemburg, France and Italy, and was designated for use in Classes 6, 7, 8, 9, 17, 19 and 20 of the international classification. Thereafter, the applicant successively registered the trademarks of “OBO BETTERMANN” and “OBO” on Classes 6, 7, 8, 9, 17 and 20 of the international classification in Germany, and registered the trademarks of “OBO BETTERMANN” and “OBO” in Singapore and Britain for Class 9 goods of the international classification.
     The disputed trademark “OBO and graphic” was applied for registration by Zheng on February 1, 2000, and was designated for use on lightning arresters and lightning rods as Class 9 goods. The registration was approved on May 28, 2001. 
Leixun Company was registered in Hong Kong on August 30, 1994 as a limited liability company in accordance with Hong Kong Company Regulations. The annual report forms submitted to the Hong Kong Companies Registry for filing by this company on September 4, 2002 indicates that one of the directors of the company is Zheng.
     On January 9, 1997, Zheng as registrar in the name of the General Manager of Leixun Company faxed the applicant and suggested that his company be the exclusive agent of the applicant’s products for surge protection in China.
On April 23, 1997, the applicant faxed Zheng, discussing matters concerning its designation as the exclusive agent.
     On June 4, 1997, the applicant faxed Zheng, designating Leixun Company as the exclusive agent in China for the applicant’s products concerning transient voltage and lightning protection.
     On February 15, 2000, Leixun Company faxed the applicant, denying its sale of products counterfeiting the applicant’s trademarks “OBO”, “OBO BETTERMANN” and “BETTERMANN”.
     On March 8, 2000, the applicant faxed Leixun Company, terminating the agency relationship between them. 
     In view of the aforementioned facts and evidence, TRAB held that under Article 15 of the Trademark Law, 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 wherefrom, and the latter raises opposition, the trademark shall be rejected for registration and prohibited from use.
     The evidence presented by the applicant shows that the applicant registered the trademark of “OBO and graphic” in Germany in as early as 1981, and also conducted international registration. The applicant owns the exclusive right to use the trademarks of “OBO and graphic”, “OBO” and “OBO BETTERMANN” in many countries, and all of the trademark registrations were earlier than the registration application for the disputed trademark in China. On these grounds, the applicant can be determined to be the owner of the “OBO and graphic”, “OBO” and “OBO BETTERMANN” trademarks. Although Zheng argued that an advertisement company under its authorization designed the disputed trademark and had registered the copyright for the cartoon character, he did not produce evidence to prove it. Therefore, TRAB did not consider this argument.
     In January, 1997, Zheng, as General Manager of Leixun Company consulted the applicant about the agency matter, and on June of the same year, the applicant appointed Leixun Company as the exclusive agent in China for its transient voltage and lightning protection products. On February 1, 2000, Zheng in his own name applied for registration of the disputed trademark on Class 9 goods for lightning arresters and lightning rods. The disputed trademark is identical in words with the applicant’s trademarks “OBO and graphic” and “OBO”. The graphic of the cartoon character of the disputed trademark is very similar to the graphic of the cartoon character of the applicant’s “OBO and graphic” in shape, particular features and overall appearance of the character. Therefore, it is a similar trademark. The lightning arrester and lightning rod products that are designated to use the disputed trademark are also one kind of transient voltage and lightning protection products manufactured by the applicant and distributed by Leixun Company according to the agency agreement. Zheng, as Director and General Manager of Leixun Company and the main middleman establishing the agency relationship with the applicant, knew perfectly well that the “OBO and graphic” and “OBO” trademarks that were used on the transient voltage and lightning protection products were the trademarks of the applicant, but preemptively registered the similar disputed trademark for identical or similar goods without the applicant’s consent. His conduct falls, not only in the prohibition of Article 41 (1) of the Trademark Law that the registration of a trademark was acquired by any unfair means, but also conforms to the legislative intent of Article 15 of the Trademark Law prohibiting the agent from registering, in its own name, the trademark of a person for whom he acts as the agent without authorization therefrom. Therefore, the disputed trademark should be cancelled. Under Article 15, Article 41 (2) and Article 43, TRAB ruled that the reasons for canceling the “OBO and graphic” trademark No. 1578392 registered by the party against whom the application was filed were tenable, and the registered trademark was cancelled.

(the disputed trademark)

II. Analysis
     The issue in this case is whether the registration of the disputed trademark falls into the situations provided by Article 15 of the Trademark Law of registering the trademark of a person for whom the agent or representative acts without authorization therefrom.
      (I) Understanding the meaning of “agent or representative” provided by Article 15 of the Trademark Law 
     The conduct of the agent or representative registering the trademark of the person for whom the agent or representative acts without authorization violates the bona fide doctrine, and infringes the legal rights and interests of the principal or the interested party. Article 15 of the Trademark Law seeks to prohibit malicious preemptive trademark registration by the agent or representative. Many countries and regions have enacted similar statutory provisions in their trademark laws prohibiting malicious preemptive trademark registration by agents and representatives, for instance, Article 11 of the Trademark Law of Germany, Article 53 (2) of the Trademark Law of Japan, Article 60 of the Trademark Law of UK, Article 8 (3) of the Community Trade Mark Regulation, and Article 23 (14) of the Trademark Law of Taiwan Region of China. Article 6 (7) of the Paris Convention for the Protection of Industrial Property provides (Paris Convention) that: “(1) If the agent or representative of the person who is the proprietor of a mark in one of the countries of the Union applies, without such proprietor’s authorization, for the registration of the mark in his own name, in one or more countries of the Union, the proprietor shall be entitled to oppose the registration applied for or demand its cancellation or, if the law of the country so allows, the assignment in his favor of the said registration, unless such agent or representative justifies his action. (2) The proprietor of the mark shall, subject to the provisions of paragraph (1), above, be entitled to oppose the use of his mark by his agent or representative if he has not authorized such use. (3) Domestic legislation may provide an equitable time limit within which the proprietor of a mark must exercise the rights provided for in this Article.” The provisions concerning prohibition of agents’ preemptive registration conduct in the trademark laws of many countries and regions, including China, derive from Article 6 (7) of the Paris Convention.
     The key point in applying Article 15 of the Trademark Law in this case is the determination of the agency relationship. As to how to understand the concept of “agent” provided by Article 15 of the Trademark Law, scholars put forward two kinds of viewpoints: a broad viewpoint and a narrow one. The narrow viewpoint holds that the agent here specially refers to the trademark agent, while the broad viewpoint holds that the dealer is also considered an agent under the legislative intent of Article 6 (7) of the Paris Convention as the basis of its theory. In his Guide to the Application of the Paris Convention for the Protection of Industrial Property, Georg Bodenhausen, a famous scholar, points out that the agent and representative provided by Article 6 (7) of the Paris Convention should be interpreted as follows: “Considering the objective of this Article, it is very likely that the above measures may not be interpreted from the narrow sense of the legal meaning. Therefore, this provision is also applied to the wholesalers of goods using the trademark, and the persons who apply for the registration of the trademark in its own name. ” In view of the fact that the source of Article 15 of the Trademark Law is Article 6 (7) of the Paris Convention, the broad viewpoint conforms more to the legislative intent, and can be approved. TRAB also adopts this viewpoint in its issuance of the Trademark Examination Guidelines, which provides that, “The content of Article 15 of the Trademark Law derives from the provision of Article 6 (7) of the Paris Convention, so in defining the agency relationship, it should be interpreted as incorporating the legislative intent of this Article, that is, to prevent the agent’s malicious preemptive registration conduct violating the bona fide doctrine. The agent referred to in this Article includes not only the agents provided by the General Principles of the Civil Law and the Contract Law, but also includes the dealers who can learn of the trademark of the person for whom he acts as an agent because of the commercial exchanges.”
     (II) Conditions for application of Article 15 of the Trademark Law
    If the case is decided in accordance with Article 15 of the Trademark Law, apart from the agency relationship between the parties mentioned above, the following conditions for application must also be followed in light of the Trademark Examination Guidelines: the disputed trademark is designated to be used on goods/services identical with or similar to the goods/service of the principal on which the trademark is designated to be used; the disputed trademark is identical with or similar to the trademark of the principal; the agent or the representative cannot prove that his conduct of application for the trademark registration is authorized by the principal; in trademark cases, the principal or the interested party should file an application of cancellation within 5 years from the date of registration of the disputed trademark. 
      (III) Extensive interpretation of Article 15 of the Trademark Law in this case can effectively check preemptive registration conduct
     In the adjudication practice, whether an agency relationship for distribution exists between the parties can be determined by the contract, transaction voucher, and purchasing information that can be used to prove the contractual relationship or commercial exchanges. Therefore, it is not very difficult to determine the existence of an ordinary agency relationship for distribution in practice. In this case, TRAB can determine that Leixun Company is the exclusive agent in China for the applicant’s transient voltage and lightning protection products based on the copies of the letters concerning the ordering of goods, and the execution of the agency agreement between Leixun Company and the applicant. The trademarks used on the applicant’s products are “OBO and graphic” and the “OBO” trademark. However, the facts of the case are relatively unique. It is Leixun Company that established the agency relationship for distribution with the applicant before the date of application for the registration of the disputed trademark, but the subject that preemptively registered the disputed trademark involved in this case is not Leixun Company, but Zheng, General Manger of Leixun Company. Article 15 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 agent or representative without authorization therefrom . . .” If this provision is to be understood literally, it seems difficult to apply this provision to this case, because the agent Leixun Company did not register the trademark in its own name. Nevertheless, TRAB did not render its decision arbitrarily. Rather, it extensively interpreted Article 15 after considering the legislative intent and facts of the case, and decided to apply Article 15 to this case.
     In the commercial agency relationship for distribution, the representative dealer learns of the trademarks of the principal because of the sale of its products. There exist some unscrupulous proxy distributors who take the means of preemptive registration of the trademark of the principal and force the principal to accept his oppressive contractual terms or manufactures products bearing this trademark by itself after the agency relationship is terminated. The conduct of preemptive registration of the proxy distributor not only injures the economic interests of the principal, but also destroys the fair competition market order. It may also give rise to a likelihood of confusion among the consumers as to the real source of the products. The legislative intent of Article 15 of the Trademark Law is to prohibit this kind of malicious preemptive registration conduct by the agent or representative. In the adjudication practice, sometimes the application for registration is not filed by the agent in his own name, but is filed by some other person. The collaboration and conspiracy between the applicant for registration and the agent can be determined based on the special relationship between them. For example, the applicant for registration might be the manager or the legal representative of the agent, and although the registration applicant and the agent are different subjects, the same natural person or superior enterprise controls them. The close relationship between the registration applicant and the agent shall lead to substantially the same result no matter if the application is filed by others or by the agent or representative, which would equally injure the principal’s trademark right. Therefore, it conforms to the legislative intent of Article 15 to rule and apply this provision in the above circumstances. Zheng, the original registrant of the disputed trademark, is the General Manager and director of Leixun Company, and at the same time is also the person who consulted with the applicant about the agency matter. Thus he should have known that “OBO and graphic” is the trademark that is being used by the applicant. Moreover, he has a consistent interested relationship with Leixun Company. Hence, it can be determined that the conduct of Zheng in registering the disputed trademark before the distribution agency relationship between Leixun Company and the applicant broke up possessed the malice of collaborating and conspiring with Leixun Company to pillage another’s trademark, so the provision of Article 15 of the Trademark Law can be applied to this case.
The disputed trademark in this case is identical in words with the trademarks of “OBO and graphic” and “OBO”, and the graphic of the cartoon character of the disputed trademark is very similar to the graphic of the cartoon character of the applicant’s “OBO and graphic” in shape, particular features, and overall appearance of the character. Thus, it is a similar trademark. The lightning arrester and lightning rod products that are designated to use the disputed trademark are also the same kind of transient voltage and lightning protection products manufactured by the applicant and distributed by Leixun Company according to the agency agreement. The registrant of the disputed trademark has no evidence to prove that its registration conduct was under the authorization of the principal. Therefore, the registration of the disputed trademark in this case falls into the circumstances referred to by Article 15 of the Trademark Law, and should be cancelled. 
     (IV) How can Huang, assignee of the disputed trademark, obtain a remedy for the losses he suffered?
    The cancellation of the disputed trademark after the judgment concerning its registration undoubtedly leads to serious losses suffered by Huang, the present proprietor of the trademark. But since Huang is not at fault for the occurrence of his own losses, how could he obtain a remedy? In accordance with Article 36 of Regulations for the Implementation of Trademark Law, although the ruling concerning cancellation of registered trademark has no retroactive force to the contract of assignment of trademark that has been performed, the losses incurred by the malicious conduct of the trademark registrant shall be compensated. In this case, Zheng, the original registrant of the disputed trademark preemptively registered this disputed trademark violating Article 15 of the Trademark Law, assigned to Huang the disputed trademark with defects in his rights. Zheng’s conduct can be determined as being one of the situations maliciously causing losses to others because he knew perfectly well that the disputed trademark had defects. Of course, the problem of compensation of damages does not fall within the jurisdiction of TRAB, so Huang should seek to obtain a remedy through civil proceedings or arbitration.
Endnote:
     1. See Ruling No. (2005) 0242 concerning Trademark Dispute No. 1578392 “OBO and graph” rendered by the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce. 

About the author:

Shi Xinzhang, Trademark Review and Adjudication Board, State Administration for Industry and Commerce of PRC.

(Translated by Ma Jing)