Building Up Your Trademark Portfolio with Defensive Registration

The growth of a brand will inevitably see an increasing expenditure in Intellectual Property protection. As a brand gains its reputation among customers, it becomes a bigger target for malefactors who want to free-ride on its fame. 

Soon, brand owners will realize that it is never enough to have their trademark registered. Further, they need a portfolio that can keep them away from trademark squatters, a portfolio that conventionally includes defensivere gistration.

In general, there are two types of defensive registration - one focusing on classes and the other one focusing on variants.

In the first type of defensive registration, the purpose is to enlarge the scope of goods and/or services in which the original trademark is protected, so that the use of the identical trademark by third parties are blocked even on dissimilar goods and/or services. 

For instance, the word mark “HUAWEI” has been registered by the Chinese ICT company on goods such as cosmetics, furniture, canned fruit and wine. Practically, it is not unusual that famous brands file their trademarks in all 45 classes, trying to cover as many items as possible.

The second type of defensive registration, albeit slightly less used, is very popular among large corporations. The e-commerce giant Alibaba, who certainly adopted this strategy, currently owns a huge “family” of trademarks including Alimama, Aligrandma, Aligrandpa, Aliuncle, Alibrother…

Back to 1995, Coca-cola filed the application for “雷碧” (léi bì), of which the Chinese characters are seemingly similar to its Chinese trademark “雪碧” (xuě bì) for Sprite. In case the conflict mark “雷碧” is not registered when someone else uses it to confuse the customers, Coca-cola will have to prove the infringement by arguing similarity, their brand reputation and the other party’s bad faith. 

However, with the registration of the said mark, it will be much quicker and easier for the authorities to determine infringement. 

There is no doubt that under certain conditions, this could be a more efficient strategy, both time-wise and cost-wise.

Can you tell the differences at first glance?

That being said, the registration of one certain similar trademark only closes one door on those who attempt to exploit the very same trademark, whereas malefactors always find other creative ways to infringe. Coca-cola may have blocked out the use of “雷碧” on non-alcoholic beverage, yet they may not prevent others from using another similar sign, “雲碧”. 

After all, there is never a flawless defense, rather a better defense.

Are you confused now?

For big companies like Alibaba and Coca-cola, defensive registration is a relatively small investment that saves them a large amount of costs that may occur in the later stage. 

Today, forced by the counterfeiting market, almost every mature brand in China has its “Great Wall” of defensive trademarks.

The top Chinese search engine provider Baidu has nearly 10 thousand trademark applications under its name

From another perspective, while protecting the original brand, the existence of defensive trademarks also hinders some good-faith applicants from registering their trademarks. That is when excessive defense turns into offense. 

The CNIPA has in relevant regulations expressed its determination to combat abnormal trademark filings, including trademark hoarding. Because trademark hoarding is actually a waste of social resources, and is contrary to the legislative spirit of the Trademark Law of the Country. 

Although these regulations do not seem to target defensive trademarks, current laws have not drawn a clear line between defensive registration and trademark hoarding. In fact, the legitimacy of defensive registration remains questionable under the Chinese Trademark Law.

In countries such as Australia and Japan, there are special requisites for trademarks to be registered as defensive marks. 

For example, an applicant of a defensive mark is obliged to demonstrate its reputation and prove the likelihood of confusion in relation to its original trademark. The same requirements also apply to the renewal of defensive marks. Once registered, defensive marks are not subject to non-use cancellation actions. 

Since Chinese Trademark Law has no explicit provisions regarding defensive registration, defensive trademarks in essence are filed, examined and registered as general trademarks, and thus subject to non-use cancellation actions. And given that the defensive trademarks are registered for infringement prevention, instead of actual use, they are especially vulnerable to non-use actions.

Contrary to the over-spending of some large corporations in defensive registration, for small and medium-sized enterprises, their budget is hardly enough to build the “Great Wall”. 

Moreover, despite the possible enforcement costs defensive registration may save, we must not overlook the costs for post-maintenance. Large stock of defensive trademarks means that the registrant will have to face numerous regular renewals and occasional non-use cancellation filed against them. 

Therefore, business operators should choose a portfolio that suits their development while meeting their budget.

Emma Qian

HFG Law&Intellectual Property