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Successful cancellation of trademark registrations for “KGC & device” and “CHEONG KWAN JANG & device”: CANCELLATION OF TRADEMARK REGISTRATIONS WHICH WERE FILED IN BAD FAITH


In 2017, after a “8-year fight”, D&N International successfully cancelled the validity of the three (3) trademark registrations for “KGC & device”, “CHEONG KWAN JANG & device” and “CHEON KWAN JANG in Chinese characters” in the name of Vietnam International Trade and Investment Corporation (“VIMATCORP”) for the reasons that the applications for registration of these trademarks were filed  in bad faith.

Facts

Korea Ginseng Corp. (“KGC”) is the owner of a number of registered marks in Vietnam with regards to a variety of ginseng-related goods, functional foods in classes 5, 29, 30, 31, 32 etc, among which are “a” under Registration no. 25924 dated December 15, 1997 and “aa” (CHEONG KWAN JANG in Chinese characters) under Registration no. 25923 dated December 15, 1997. Also, over many years doing business in various markets all over the world including Vietnam, KGC have been using the marks “aaa”, “aaaa” as well as the three letters “KGC” as its house mark and trade name.

On December 22, 2006, KGC entered into a distribution agreement with VIMATCORP, thereby authorizing VIMATCORP as a distributor for KGC’s products in the Vietnamese market. According to the agreement, VIMATCORP was granted the right to establish one “Cheong Kwan Jang” branded store to sell KGC’s products to customers in the territory of Vietnam within the 2-year term of the agreement. Upon the termination of the agreement regardless of any reasons, VIMATCORP would cease using in any way the KGC’s intellectual property rights or any materials similar thereto.

Having said that, however, on August 27, 2007, August 28, 2007 and September 19, 2007, VIMATCORP respectively filed three applications for registration of “KGC & device”, “CHEONG KWAN JANG & device” and “Device & Chinese characters” for the goods and services in classes 5 and 35 which are all related to ginsengs, which were later granted protection under registration nos. 110160, 109960 and 116098 respectively, causing confusion with the KGC’s earlier registered and used marks as well as KGC’s widely used trade name.

Having found that the said three trademark registrations in the name of VIMATCORP infringed its legitimate rights and benefits, in 2009 and then 2014, KGC (represented by D&N International) proceeded with filing respective requests for cancellation of validity of the VIMATCORP’s three trademark registrations. During the years pursuing the cancellation, KGC have submitted to the National Office of Intellectual Property of Vietnam (“NOIP”) a huge volume of evidences proving  the dishonesty of VIMATCORP when the Vietnamese company filed the applications for registration of the said three marks. The submitted evidences include those proving (i) KGC is the sole legitimate owner of the marks which have been widely used and recognized in the markets including the device marks “a”, “aaa”, the word marks “CHEONG KWAN JANG”, “aa” (CHEONG KWAN JANG in Chinese characters) and “KGC” (the house mark and trade name of Korea Ginseng Corp.); (ii) VIMATCORP used to be KGC’s authorized distributor, thereby was clearly aware of KGC’s ownership of the said marks and, for this reason (iii) VIMATCORP did not have the rights to file for registration of any of the said marks; the filing for registration of the said three marks causing confusion with the KGC’s marks is VIMATCORP’s deliberate copying without KGC’s consent, with the aim to taking a free ride on the prestige of the KGC’s trademarks, which violated the mutual agreement on intellectual property rights.

After a thorough consideration during which the NOIP many times requested the related parties to provide their opinions and evidences, finally on November 8, 2017, the NOIP issued its official decisions on accepting the requests of KGC (represented by D&N International), thereby the validity of the three trademark registration nos. 110160, 109960 and 116098 in the name of VIMATCORP was totally cancelled.

Comments

  • As stipulated at Article 96.3 of the current IP Law, “The time limit for exercising the right to request for cancellation of a trademark registration shall be five (05) years from the grant date, except where the registration has been granted as a result of the applicant’s dishonesty.”

The application of this provision in practice has often caused controversies over the determination of the “dishonest” (bad-faith) filing for mark registration, since this concept is not clearly provided in the IP law or in any other legal normative documents thereunder. In a number of cases, the settlement of the requests for cancellation of trademark registrations on the basis of bad-faith filing has been remarkably prolonged due to the differences between the viewpoints of the requestors or the owner of cancelled marks and the NOIP, or between the related parties.

  • In the above referenced case, starting from 2009, 2014 through to early 2017, although KGC has provided a huge volume of evidences proving that the KGC’s marks have been widely used and recognized in the markets, the NOIP still hesitated in assessing the evidences before rendering the final decision. It was not until KGC and a number of Korean corporations cooperated with Korean Intellectual Property Office (KIPO) and Market Surveillance Agency of Vietnam (MSA) to organize notable conferences on counferfeit products in Vietnam in which the NOIP was invited to participate did the NOIP was directly introduced to the fame and prestige of KGC’s brands and product quality, which helped accelerate the NOIP’s determination on the KGC’s cancellation requests.

After a very long time of thorough consideration, at last, the NOIP accepted the arguments and evidences presented by D&N International, namely, VIMATCORP did not have the rights to file the applications for registrations of the said marks in accordance with Articles 87.2 and 87.7 of the IP Law (including the marks which was incorporated of the elements being the KGC’s marks which were registered in Vietnam or had been widely used and recognized in the market). For this reason, it is totally rational to conclude that VIMATCORP’s filing for registration of the marks in these cases is an act of dishonesty.

The said cases can be considered a typical example of the business risks as the legitimate owner failed to timely proceeded with the procedures for establishment of their trademark rights, which led to the situations in which their trademarks were appropriated by their former agents/partners. Therefore, to minimize such risks, individuals and organizations are advised to consider filing applications for registration of their trademarks in the target market as soon as possible, especially in Vietnam where the fist-to-file principle is stipulated by the IP Law.