Author: Xiaohui Kuang

The challenge: an older registration and a narrower route to invalidation

In August 2024, a Foshan-based company instructed Jiaquan to seek invalidation of the registered Chinese trademark OU NUO SEN. The case was difficult from the outset: the disputed registration had already been on the register for more than five years.

Under Article 45 of China’s Trademark Law, the five-year period significantly limits challenges based on relative grounds, subject to the statutory exception concerning bad-faith registration of a well-known trademark. A conventional claim based primarily on conflict with an earlier right was therefore unlikely to provide a viable route. The team needed to determine whether the registration formed part of broader conduct that could support invalidation on absolute grounds.

The breakthrough: an ordinary business record that did not add up

At first glance, the registrant appeared unremarkable: an individual-owned business established on April 23, 2018, with registered capital of RMB 20,000 and a business scope covering ordinary consumer goods. The anomaly emerged only when Jiaquan compared the registrant’s historical corporate filings with those of the agency that had handled its trademark applications.

The registrant’s former operator had the same name as the agency’s former shareholder, legal representative, and finance officer. More importantly, the registrant and the agency shared the same registered telephone number. This was not merely a possible coincidence of names; it was a concrete link between the applicant and the filing agency.

That connection suggested that the registrant may have been used as a proxy to enable the agency to acquire trademarks while circumventing the restriction in Article 19(4) of the Trademark Law, which limits trademark agencies from applying for marks outside their agency services. Further investigation found similar overlaps between the agency and several other applicants, many of whom also had extensive trademark-transfer records.

Building the evidence chain

1. Filing volume inconsistent with genuine business needs

The registrant held 194 trademarks. Of these, 175 were filed during a concentrated period from 14 May to 6 December 2018. The first filing occurred less than one month after the business was established. Even with only the minimum official fees, the 175 applications would have cost approximately RMB 47,000—more than twice the registrant’s RMB 20,000 in registered capital.

The applications also covered 21 classes, including Classes 3, 5, 6, 9, 10, 11, 12, 16, 18, 19, 20, 21, 24, 25, 27, 28, 29, 30, 35, 41, and 44. Such a broad and commercially unrelated portfolio was difficult to reconcile with the operating needs of a newly established, very small business.

2. Repeated imitation of established brands

The portfolio included marks identical to Chinese transliterations used for several IKEA furniture products, including LA MU WEI KE, SI WA SI TA, YE BO, KAI SI TUO and HA MA WEI. It also contained Chinese-language marks closely resembling those of Xiaomi, Michelin and several other established brands.

The repeated targeting of unrelated established marks supported the inference that the applications were not intended to build and use an independent brand portfolio, but rather to appropriate third-party goodwill and create assets for later sale or opportunistic use.

3. Fragmented transfers consistent with trademark trafficking

The registrant had transferred at least 51 trademarks to eight unrelated parties in Guangdong, Henan, Zhejiang, Shandong, and other provinces. The transferees had no apparent operational or investment connection to one another. This scattered, piecemeal transfer pattern differed sharply from the consolidated transfers typically associated with a merger, restructuring, or genuine business divestment.

Taken together, the connected entities, disproportionate filing volume, breadth of classes, imitation of established marks, and repeated transfers established a coherent pattern: the marks were being treated as inventory for accumulation and resale rather than as identifiers for genuine commercial use.

Key takeaway for brand owners

A registration that has survived for more than five years may be harder to challenge, but it is not necessarily immune. Where conventional relative grounds are constrained, the decisive evidence may lie outside the face of the trademark record: historical corporate filings, shared contact details, portfolio-wide filing patterns, class coverage, imitation of third-party marks and downstream transfers can reveal whether the registrant was pursuing genuine use or trafficking in trademarks.