Editorial note:
As you may know, China is a country of statutory law, and the judgments of Chinese courts do not have the same legal effect as precedents in common law countries. However, in recent years, the Supreme Court of China has successively issued some guiding cases, which have a guiding role for courts at all levels in China.

China Supreme Court Released Guiding Case No.162 addressing an administrative dispute over the invalidation of trademark right.This Guiding case was discussed and approved by the Judicial Committee of the Supreme People's Court and released on July 23, 2021

1.Key Point of the judgement　　

The parties signed a customized product sales contract in 2012. Although there is a distribution relationship, the disputed trademark pattern, product design, etc. are all proposed by the agent, and the customized product sales contract clearly stipulates that without authorization by the agent the principal shall not use the product concept, advertising terms of customized products. In case the principal has no prior use behavior, the disputed trademark cannot be determined to be the "principal's trademark" referred to in Article 15 of the Trademark Law.

2. Relevant laws and regulations

Article 15 of the Trademark Law of the People's Republic of China

3.Basic facts of the case

In the administrative dispute over the invalidation of trademark rights between Chongqing Jiangxiaobai Wine Co., Ltd. (“the Plaintiff”) and the China National Intellectual Property Administration (“the Defendant”)  and a third party, Chongqing Jiangjin Winery (Group) Co., Ltd. (“the Third Party”), the disputed trademark is "Jiangxiaobai" trademark. It was registered on December 19, 2011 to be used in category 33 alcoholic products, after approval, the rights holders have been changed to the Plaintiff.On February 20, 2012, the Third Party and New Blueprint Company signed a customized product sales contract . The customized product sales contract clearly stipulates that "Party A (the Third Party) authorizes Party B (New Blueprint Company) to be the distributor of the “Jijiang Brand”  & “Jiangjin Laobaigan” customized product. Article 6-2 clearly stipulates that "Party B is responsible for the creativity of product concept, product packaging design, planning and implementation of advertising and promotion, investment promotion and maintenance of secondary distribution channels of products, and Party A provides full cooperation. Party A shall respect Party B's product concept, packaging, the design, advertising pattern, advertising language, and marketing planning scheme, and shall not be used for products directly sold by Party A or sold by other customers of Party A without the authorization of Party B.” 

In May 2016, the Third party filed a request for invalidation of the trademark in dispute with the Trademark Review and Adjudication Board. The Trademark Review and Adjudication Board held that before the filing date of the disputed trademark, thee Plaintiff should have known about the "Jiangxiaobai" trademark of the Third Party. Therefore, it was ruled that the disputed trademark should be declared invalid. The plaintiff refused to accept and filed an administrative lawsuit.

4. the final Judgement

On December 26, 2019, the Supreme People's Court rendered an Administrative Judgment to revoke the rule of Trademark Review and Adjudication Board.

5.Judgement reasoning

The Supreme People's Court held that the main focus of the dispute in this case was whether the application for registration of the trademark in dispute violated the provisions of Article 15 of the 2001 Trademark Law.

First, the evidence provided by the Third Party was insufficient to prove that it had used the disputed trademark earlier.

Secondly, although Jiangjin Winery has a distribution relationship with New Blueprint Company, the customized product sales contract between the two parties also stipulates that the rights of product concepts and advertising terms of customized products belong to New Blueprint Company.

Finally, the emails and other evidences during the cooperation between the Third Party and New Blueprint Company proved that the name of "Jiang Xiaobai" and related product designs were first proposed by the legal representative of New Blueprint Company. According to the customized product sales contract between the two parties, the product concept and design and other rights belong to the new blueprint company.

To sum up, the application and registration of the disputed trademark by New Blueprint Company did not infringe the legitimate rights and interests of the Third Party, and did not violate the provisions of Article 15 of the 2001 Trademark Law.