Shanghai Balance Automotive Equipment Co Ltd

Trade mark disputes — keep the faith (and your email records)

Shanghai Balance Automotive Equipment Co Ltd is a specialist in researching, developing and manufacturing automotive service equipment, which is sold globally under the brand UNITE. Our client was in negotiations with its former distributor to buy the European Union trade marks (EUTMs) relating to UNITE for a significant sum. However, it soon became aware that these marks had actually been transferred to another company for much less than their true value.

Case Study

Case Type

Trade mark dispute

Action

Invalidity actions

Outcome

Cancellation on bad faith grounds

Gareth Price

By Gareth Price

Partner

Issue:

The business relationship between the two parties was close enough to suggest that it was fair to expect this company not to file, without authorisation, marks such as these. Our client’s Chinese counsel sought our advice as to what action could be taken to cancel the EUTMs. Based on our many years of experience working with the European Union Intellectual Property Office (EUIPO) and its practices, we devised a strategy to obtain the successful cancellation of the trade marks registered by our client’s former distributor.

Action:

We prepared evidence which set out the history of the relationship between our client and its former distributor, with particular focus on the filing of the EUTMs, the subsequent offers to sell the trade marks to our client for a fluctuating and high price and the subsequent sale of the trade marks by the former distributor to a related company for a nominal consideration. However, the burden of proof in establishing that any trade marks were filed in bad faith is a high one, presenting us with a big challenge.

We were able to satisfy the EUIPO that:

— The business relationship between our client and owner of the trade mark was close enough to suggest that it was fair to expect this company not to file, without authorisation, trade mark applications identical or highly similar to the signs that our client had used for a long time in relation to identical and similar services.

— Therefore, the filing of the EUTMs constituted a breach of the duty of fair play. It isn’t in accordance with the usual honest practices of commerce that a company distributing or reselling the goods of another registers a trade mark that’s highly similar to that of the latter in violation of the trust placed in the distributor.

— The behaviour of the trade mark owner after the EUTMs were registered also confirmed that its intention when filing was to usurp our client’s trade marks to gain a better position for negotiating a joint venture or otherwise obtain a financial advantage. The owner of the trade marks acted in bad faith when it filed the contested EUTMs.

Outcome:

We were delighted to satisfy the burden of proof and cancel the trade marks of our client’s former distributor at the EUIPO.

We were greatly assisted in this case by working in close collaboration with our client’s Chinese counsel to understand what evidence was available and what evidence the key witness in the cases could provide. Ultimately, this case was successful due to the quality of evidence (largely in the form of email correspondence) that our client was able to provide, combined with our ability to demonstrate how the evidence showed that the former distributor acted in bad faith.

This case really demonstrates the importance of keeping all of your correspondence with suppliers and distributors — you never know when it might come in handy.

The published decisions can be accessed here and here.

Need help with a trade mark dispute?

For more information, please contact Gareth Price at gip@udl.co.uk.

0113 245 2388

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