Case Overview
Our client, an affiliate of a multinational industrial group has long been engaged in the manufacture and sale of air compressors, expanders, air treatment systems, and related ancillary products. For many years, the group has used a distinctive trademark in connection with the promotion and sale of lubricant products designed for use with its air compressors. In China, those products had been continuously promoted through distribution agreements, e-commerce platforms, official websites, WeChat accounts, and industry exhibitions, thereby establishing a sustained market presence.
A domestic Chinese company later applied to register an identical word mark in Class 4 for goods including lubricating oil and related products, and the mark was subsequently registered. Although our client did not own a prior trademark right in the same class that could be directly cited, , the overall circumstances, including the client’s prior use, market presence, and the parties’ industry contact, pointed to a clear conclusion: this was not a good-faith filing, but a deliberate attempt to appropriate a mark that had already been used by another party and had acquired a degree of market recognition.
On that basis, GENLaw filed an invalidation action on the client’s behalf, centering its arguments on Article 32 of the PRC Trademark Law. The China National Intellectual Property Administration (“CNIPA”) ultimately accepted this core argument and declared the disputed trademark invalid.
Key Challenges and GENLaw’s Strategic Approach
Challenge 1: No Prior Registration in the Same Class — the Conventional Route Was Unavailable
This meant that the casecould not pursue the usual line of argument based on a prior registration covering identical or similar goods and a comparison of the marks at issue. Instead, the case had to be built within the analytical framework of Article 32 — namely, whether the client had established a protectable prior-use interest in the disputed mark in relation to the relevant goods.
GENLaw’s strategy: Focus on Article 32 and define the core theory of the case as “prior use – a certain degree of influence – constructive knowledge – bad-faith squatting.”
Rather than dispersing the case across multiple legal grounds, GENLaw made a deliberate decision to concentrate on Article 32. The reason was that the strongest factual foundation lay not in the client’s registration portfolio, but in its long-standing and continuous use of the mark on lubricant products, together with the fact that the — respondent as an operator in the same industry — should reasonably have been aware of the mark and nevertheless proceeded to file for registration.
Challenge 2: Long-term use of the mark did not automatically establish use in relation to the disputed goods.
The client’s mark had clearly not attained well-known trademark status. In addition, the evidence of use was not contained in a single, tidy set of sales records; rather, it was dispersed across group affiliates, distribution arrangements, online promotions, and trade show participation. One of the central challenges in this case, therefore, was how to consolidate these seemingly fragmented materials so as to demonstrate not only that the mark had in fact been used, but also that it had acquired a certain degree of influence in a commercial context highly relevant to the disputed goods.
GENLaw’s strategy: Organize the evidence around product relevance, functional complementarity, and real-world market context, rather than mechanically relying on class labels.
In presenting the evidence and legal arguments, GENLaw did not confine the analysis to formal class boundaries. Instead, we emphasized the established complementary relationship between the lubricant products and the client’s core business, as well as their functional connection and the way they are used together in the marketplace. On that basis, we systematically organized evidence relating to the authorization chain, distribution arrangements, sales materials, product documentation, official websites, social media content, and trade show promotion. The goal was to show that, well before the filing date of the disputed mark, the client’s mark had already been used and promoted in the Chinese market through multiple channels and had formed a stable association with lubricant products among relevant consumers.
By structuring the case in this way,, “prior use” and “a certain degree of influence” were no longer abstract legal concepts, but were anchored in specific goods and a concrete commercial environment.
Challenge 3: Multi-Entity, Multi-Channel Use Structures Often Give Rise to Disputes Over Standing and Rights Ownership
In a group structure, the entity that owns the brand, the entity that promotes it, and the entity that sells the products are often not the same. In cases of this kind, respondents routinely challenge the applicant’s standing, question ownership of rights, and argue that use by affiliated companies should not be attributed to the applicant, thereby attempting to sever the connection between the applicant and the actual commercial use of the mark.
GENLaw’s strategy: Establish a clear intra-group rights chain so that use by affiliated entities could properly support the Article 32 claim.
To address this issue, GENLaw systematically mapped the group’s internal authorization arrangements, corporate relationships, and brand-use chain, ensuring that the use and promotion carried out by affiliated companies could be incorporated into the applicant’s rights basis. As a result, the analysis did not remain at the superficial level of identifying which entity conducted the sales or promotional activities, but instead returned to the substantive question of whether the client’s mark had, in fact, formed a protectable prior interest in the relevant market.
Challenge 4: Proof of Prior Use Alone Was Not Enough — the Respondent’s Knowledge Also Had to Be Established
A successful claim under Article 32 requires more than proof of prior use and a degree of influence. The surrounding circumstances must also show that the filing bears the hallmarks of bad-faith squatting. In this case, unless the respondent’s awareness of the mark and bad-faith intent could be convincingly established, the overall persuasiveness of the Article 32 claim would remain incomplete.
GENLaw’s strategy: Focus on facts showing industry contact to strengthen the argument that the respondent should have been aware of the mark.
GENLaw did not stop at the generalized assertion that the parties operated in the same industry. We went further by presenting evidence that both parties had participated in the same industry exhibitions on multiple occasions, operated within overlapping market ecosystems, and offered closely related products to substantially the same customer base. In a specialized industrial sector, facts of this kind — shared exhibition participation, market overlap, and business proximity — are often critical to establishing that the respondent knew or should have known of the earlier-used mark. In this case, integrating those concrete points of contact into the broader Article 32 analysis brought the bad-faith nature of the disputed mark into sharp focus.
Decision and Key Takeaways
The CNIPA ultimately found that, prior to the filing date of the disputed mark, the applicant and its affiliates had promoted and sold lubricant products bearing the mark through distribution agreements, e-commerce channels, official websites, WeChat accounts, and trade exhibitions, and that the mark had thereby acquired a degree of influence in connection with lubricant products. The CNIPA further found that the respondent had attended the same industry exhibitions as the applicant’s affiliates on multiple occasions and, as a participant in the same industry, should have been aware of the mark and its existing market presence. On that basis, the CNIPA concluded that the respondent’s registration of the disputed mark for lubricant products — goods on which the applicant’s affiliates had already established prior use — could not be regarded as a good-faith filing. Instead, it constituted “the preemptive registration by illegitimate means of a trademark that has already been used by another party and has acquired a certain influence” within the meaning of Article 32 of the PRC Trademark Law, and the disputed trademark was declared invalid.
The significance of this decision extends beyond the successful outcome for the client. Several aspects of the CNIPA’s reasoning are particularly noteworthy:
First, in the absence of a prior registration in the same class, the decision did not stop at a formalistic class-by-class comparison, but proceeded to examine whether a protectable prior-use interest had been established.
Second, its assessment of “a certain degree of influence” did not depend on any single item of evidence, but rested on a holistic evaluation of multiple forms of use and promotion.
Third, its finding that the respondent “should have known” was not based on vague presumption, but on specific and documented instances of industry contact.
For the increasing number of bad-faith filings targeting related, complementary, or extended product categories rather than the rights holder’s core registered goods, this analytical approach offers meaningful practical guidance.
Reflections
In our view, the significance of this case lies not only in the successful invalidation of a single trademark, but also in the practical framework it offers for deploying Article 32 in cross-class bad-faith filing disputes. Today, trademark squatters are less likely to engage in direct conflict with a rights holder’s existing registrations. Instead, they increasingly target goods that are functionally related to, commercially associated with, or naturally complementary to the rights holder’s core products, attempting to exploit formal class distinctions to avoid challenge.
Against that backdrop, enforcement strategies must adapt. In Article 32 cases, the analysis should not be confined to whether the goods fall within the same class. It should also address whether the goods are linked by complementary use, functional relationship, overlapping sales channels, or shared consumer perception. Nor should the inquiry focus solely on whether the rights holder owns a corresponding registration; it must also consider whether the rights holder has, through genuine and sustained use, built up a recognizable and protectable market interest. Likewise, rather than merely asserting that the respondent is an industry peer, practitioners should, wherever possible, substantiate constructive knowledge with concrete evidence of exhibition participation, channel overlap, promotional exposure, and direct or indirect market contact.
In short, the value of Article 32 lies precisely in its ability to look beyond rigid class boundaries and return the analysis to the realities of brand use and market order. As cross-class bad-faith filing strategies become increasingly sophisticated and difficult to detect, the ability to clearly articulate the four dimensions of the analysis — prior use, a degree of influence, product relevance, and bad-faith intent — helps ensure that Article 32 remains one of the most effective tools for combating trademark squatting in China.
The views expressed in this article are those of the authors and do not constitute formal legal advice or opinions of GENLaw.
