Case Introduction

A Bulgarian company (hereinafter referred to as the principal), well-known in the field of daily necessities and cosmetics in Bulgaria, has a brand of oral care products (hereinafter referred to as the brand) which is selling well in many countries and regions. On December 3, 2014, a company located in Zibo (hereinafter referred to as the agent) reached an Agency Agreement, (effective date: January 5, 2015), with the principal, who conditionally agreed that the agent could apply for trademarks identical with the brand in mainland China.

Before the agreement took effect, however, the agent had already submitted an application for the trademark in mainland China (hereinafter referred to as the disputed trademark) and failed to perform the obligations stipulated in the agreement.

The principal believes that the agent filed the trademark application before the agreement took effect without authorization and subsequently failed to perform the obligations stipulated in the agreement. The principal further believes that the agent had no right to apply for the disputed trademark in mainland China and that since the agent’s application for the disputed trademark violates Article 15(1) of the Trademark Law, the disputed trademark should be declared invalid.

The CNIPA found that the principal and the agent had an agency distribution relationship for the toothpaste and mouthwash of the brand in question, and that the agent's application for the disputed trademark on "non-medical mouthwash; toothpaste" violated the provisions of Article 15(1) of the Trademark Law.

Comments of lawyer

In this case, the two parties reached an agency agreement, in which the principal conditionally agreed that the agent could apply for their trademark. However, the agent applied for the disputed trademark before the effective date of the agreement without approval from the principal.

Moreover, the agent did not perform any of their stipulated obligations after the agreement came into effect and breached the terms of contract on multiple occasions. Based on the above facts, it can be seen that the agent had no real intention of performing their obligations under the agency agreement and their objective was to obtain the agency agreement through deceptive means. Considering the principle of fair competition and honest and sincere operation, therefore, the agency agreement’s term concerning the approval given to the agent for a trademark application cannot reflect the principal’s true intention. The agent did not conform to the principle of equal rights and obligations and was not given permission to submit a trademark application. Consequently, this case falls under the set of circumstances regulated by Article 15(1) of the Trademark Law.