{"id":3559,"date":"2021-02-08T22:10:00","date_gmt":"2021-02-08T14:10:00","guid":{"rendered":"https:\/\/east-ip.com\/?p=3559"},"modified":"2025-05-01T22:15:20","modified_gmt":"2025-05-01T14:15:20","slug":"bad-faith-registration-use-of-taped-admissions-heineken-invalidation","status":"publish","type":"post","link":"https:\/\/www.east-ip.com\/zh\/insights\/bad-faith-registration-use-of-taped-admissions-heineken-invalidation\/","title":{"rendered":"Bad Faith Registration \u2013 Use of Taped Admissions \u2013 Heineken Invalidation"},"content":{"rendered":"

Since the introduction in 2019 of amendments to the PRC Trademark Law providing stronger tools for combatting bad faith trademark registrations, Chinese authorities have begun changing their examination practices in ways that increase the burden of proof on pirates to prove their good faith and reduce the burdens in various ways on victim brand owners.  One notable example of the latter is a recent invalidation handled by the Trademark Review and Adjudication Department (\u201cTRAD\u201d) against a bad faith pirate of a Heineken trademark.<\/p>\n\n\n\n

As explained below, in this case, the TRAD recognized evidence demonstrating the registrant\u2019s bad faith intent based on a tape-recorded admission by the pirate furnished by a private investigator whose work was witnessed by local notaries.\u00a0Prior to this decision, the TRAD, Trademark Office (\u201cTMO\u201d) and Beijing courts had generally ignored oral admissions of bad faith, and for reasons that have never been clearly explained.<\/p>\n\n\n\n

Notwithstanding this long-standing restriction, it has been a best practice for victim brand owners to submit recordings of damning admissions by pirates in support of opposition and invalidations in the hope that they might indirectly influence the examiners\u2019 view of the case, or in the hope that the day would eventually come when Chinese authorities would begin formally recognizing and relying upon such evidence to satisfy the petitioner\u2019s burden of proving bad faith.\u00a0This new Heineken case suggests that this day may now have arrived.<\/p>\n\n\n\n

The \u201cHEI NI KEN\u201d Case<\/h2>\n\n\n\n

The disputed trademark, reproduced below, is a pure Chinese character trademark which has an obvious aural similarity to the Dutch mark \u201cHEINEKEN\u201d.  Pronounced \u201cHEI NI KEN\u201d in Mandarin, the mark was registered by a beer trading company covering \u201cbeer\u201d and other items in Class 32.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

(pronounced \u201cHEI NI KEN\u201d)
(Reg. No. 16065609)<\/p>\n\n\n\n

While it is aurally similar to Heineken\u2019s mark, the disputed mark does not include any Latin lettering.\u00a0Furthermore, it bears no resemblance to the Chinese-character version of \u201cHEINEKEN\u201d that Heineken uses in the PRC market.\u00a0 Indeed, the Chinese name for \u201cHEINEKEN\u201d in the PRC is pronounced \u201cXI LI\u201d and rendered as \u201c\u559c\u529b\u201d.<\/p>\n\n\n\n

Given the obvious differences between these Chinese marks (XI LI v. HEI NI KEN) and the fact that \u201cHEINEKEN\u201d and the Chinese mark have obvious visual and conceptual differences, the TRAD could have easily determined that,\u00a0prima facie<\/em>, the marks are distinguishable. As such, the burden was on Heineken to prove a likelihood of consumer confusion \u2013 if not through the objective similarities between the marks then through evidence of the subjective intent of the registrant.<\/p>\n\n\n\n

Typically, the easiest way to demonstrate bad faith by a pirate is through a proprietorship search which reflects a history of mass filings of famous third-party brands.\u00a0 But in this case, the registrant had no such history.\u00a0Thus, Heineken was constrained to send investigators out to collect persuasive evidence of intent to ride on the fame of its marks.<\/p>\n\n\n\n

Investigation against Registrant<\/h3>\n\n\n\n

Heineken\u2019s investigators were instructed to visit the registrant together with a notary public tasked with witnessing events and supervising the recording of dialogue with the pirate.<\/p>\n\n\n\n

Fortunately, a garrulous representative of the registrant made a number of clearly damning admissions, including the following:<\/p>\n\n\n\n

    \n
  • The representative acknowledged being an importer of HEINEKEN beer, and explained that his purpose in registering the disputed trademark was to facilitate customs procedures.<\/li>\n\n\n\n
  • The representative offered to sell the registration for RMB300,000 (~US$46,400), and acknowledged that it had never actually been used.<\/li>\n\n\n\n
  • The representative admitted that the Chinese characters in the trademark were derived from the Dutch word \u201cHEINEKEN\u201d and its Pin Yin romanization, \u201cHEI NI KEN\u201d.<\/li>\n\n\n\n
  • Finally, the representative clearly admitted that he intended to free ride on the fame of the \u201cHEINEKEN\u201d brand.<\/li>\n<\/ul>\n\n\n\n

    The audio recording was notarized and the notary\u2019s report included a photo of the registrant\u2019s enterprise business license.\u00a0The representative \u2013 whose name appeared in the business license \u2013 also confirmed his status as the legal head of the company, thus helping to prove he spoke authoritatively for the company.<\/p>\n\n\n\n

    TRAD Decision<\/h3>\n\n\n\n

    Reflecting the importance the TRAD gave to the notarized recording, the very first paragraph of its decision references this evidence:<\/p>\n\n\n\n

    \u201cThe Notary Certificate (2016) Hu Xu Zheng Jing Zi No. 2421 demonstrates that the respondent [i.e., the registrant] was aware of the applicant [Heineken] and its \u201cHEINEKEN\u201d\u2026 series of trademarks, and that the respondent\u2019s application for the [disputed] trademark was a translation of the applicant\u2019s trademarks.  In the absence of evidence to the contrary, this Department confirms these facts.  The Pinyin for the wording in the disputed trademark is \u201cHEI NI KEN\u201d and this is similar to \u201cHEINEKEN\u201d [covered by] Cited Trademarks 1, 2, 3, 4, 6 and 7 in terms of wording, pronunciation, etc.<\/em>\u201d<\/p>\n\n\n\n

    Although the TRAD did not specifically determine that the company\u2019s representative acted in \u201cbad faith\u201d, the pirate\u2019s admissions were the main basis for the TRAD\u2019s core holding, i.e., that the disputed mark was a deliberate \u201ctranslation\u201d (better: transliteration) of Heineken\u2019s marks, and that as such, the various marks should be considered similar.<\/p>\n\n\n\n

    The investigator\u2019s audio recording was included in a notarial report, with the invalidation arguments containing a detailed transcript of the pirate\u2019s most damning admissions.<\/p>\n\n\n\n

    In the decision, the TRAD noted that the registrant did not file a defense to the invalidation application.  In the absence of evidence to the contrary, the TRAD accepted the facts as stated in the notary certificate.<\/p>\n\n\n\n

    But if the pirate had responded by refuting the contents of the taped evidence, it is quite possible the TRAD would have accepted it anyway, as the investigator was able to elicit statements that were, on the whole, quite persuasive. In particular:<\/p>\n\n\n\n

      \n
    • The investigator was able to satisfy the notary that the meeting with the registrant was being attended by the registrant\u2019s main representative, i.e., its Legal Representative (\u6cd5\u5b9a\u4ee3\u8868), the equivalent to CEO or Chairman;<\/li>\n\n\n\n
    • The investigator was able to elicit from the registrant an admission that he knew about the \u201cHEINEKEN\u201d mark prior to filing the application, and that the disputed mark was intended as a transliteration thereof;<\/li>\n\n\n\n
    • The investigator was also able to elicit an admission that the pirate had not used the mark and that it was willing to sell it for a high price; and<\/li>\n\n\n\n
    • The investigator\u2019s conversation with the registrant\u2019s representative took place at the company\u2019s registered business address, rather than a private home. As such, the evidence complied with Chinese laws and judicial policies applicable to recordings made without the declarant\u2019s approval.<\/li>\n<\/ul>\n\n\n\n

      Legality and Admissibility of Taped Admissions<\/h2>\n\n\n\n

      Chinese law allows the presentation of recorded evidence, provided it was not secured through \u201cillegal means\u201d, a limitation that has been interpreted to cover evidence secured through bugs surreptitiously placed in a home or working place.  In general, recordings of conversations between two parties made in a public place, including a party\u2019s business premises, will be deemed legal.<\/p>\n\n\n\n

      Naturally, the content of recorded admissions will be given greater weight if the speaker\u2019s identity is clear and there is corroborating evidence. While investigators need to be properly instructed on the questions to ask bad faith pirates, the involvement of notaries as witnesses is for now considered the safest way to ensure that investigator testimony will be accepted by the TMO, TRAD and courts.<\/p>\n\n\n\n

      Next Case<\/h2>\n\n\n\n

      It remains unclear for now whether this decision is an outlier or the beginning of a welcome new trend where the TRAD, TMO and the courts will be more receptive to notarized admissions from pirates.  But victim brand owners seeking to rely on oral admissions by pirates may want to consider referencing this decision (available soon through the CNIPA search engine) in their future arguments.<\/p>\n\n\n\n

      It is only a matter of time before the admissibility of taped admissions is considered by the Beijing courts in future appeals of TRAD decisions.\u00a0But recent decisions by the Supreme People\u2019s Court suggest the courts will have no reason to exclude such evidence on legal grounds.<\/p>","protected":false},"excerpt":{"rendered":"

      Since the introduction in 2019 of amendments to the PRC Trademark Law providing stronger tools for combatting bad faith trademark registrations, Chinese authorities have begun changing their examination practices in ways that increase the burden of proof on pirates to prove their good faith and reduce the burdens in various ways on victim brand owners.<\/p>","protected":false},"author":4,"featured_media":1005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"[]"},"categories":[21,15,19],"tags":[32,42],"class_list":["post-3559","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enforcement","category-insights","category-trademark","tag-bad-faith","tag-trademark-prosecution"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/posts\/3559","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/comments?post=3559"}],"version-history":[{"count":1,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/posts\/3559\/revisions"}],"predecessor-version":[{"id":3561,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/posts\/3559\/revisions\/3561"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/media\/1005"}],"wp:attachment":[{"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/media?parent=3559"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/categories?post=3559"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.east-ip.com\/zh\/wp-json\/wp\/v2\/tags?post=3559"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}