If a trademark with certain influence is identical or similar to a registered trademark and is used before the trademark registrant, the registered trademark owner has no right to prohibit the earlier user from continuing to use the trademark within the original scope. If a trademark registrant preemptively registers a trademark that was previously used by others and has a certain influence, his trademark rights shall not be protected by law. In cases involving trademark priority right, the review of evidence should be strengthened, and the actual use of the prosecution and defense and the true registration intention of the trademark registrant should be screened.

Case introduction

Plaintiff: AMBITMICRO TECHNOLOGY LIMITED (referred to as AMBITMICRO)

Defendants: AMBIQ MICRO, INC, FUJITSU ELECTRONIC COMPONENTS (SHANGHAI) CO., LTD. (referred to as Fujitsu Shanghai)

On December 18, 2015, Pei Zhanglong, an outsider in the case, invested HKD 10,000 to register AMBITMICRO in Hong Kong. On December 31 of the same year, AMBITMICRO applied for the registration of the No. 18766213 trademark "AMBITMICRO", which was granted on February 7, 2017, approved for use in class 9 "computer storage devices, computer hardware, chips (integrated circuits), semiconductor devices". The defendant, AMBIQ MICRO, INC, was established in the United States on January 20, 2010. On August 19, 2012, the company applied to the United States Patent and Trademark Office for the registration of the "AMBIQ MICRO" trademark (Class 9 semiconductor device), which was approved for registration on April 30, 2013. Since January 2014, AMBIQ MICRO, INC has sold its products in China through multiple distributors including Fujitsu Shanghai. According to the existing evidence, by December 31, 2015, one of the distributors paid more than USD 60,000 for five months' worth of goods, and another had imported the accused products four times in four months for a total of nearly USD 350,000, as reported in various industry journals and websites. AMBIQ MICRO, INC is ranked second in "The World's 60 Most Noteworthy Semiconductor Emerging Companies in 2016". Since May 31, 2017, AMBITMICRO has repeatedly sent warning letters to AMBIQ MICRO, INC, its investors and its multiple distributors, claiming that the "Ambiq Micro" microcontrollers and real-time clock products they sold infringed the trademark rights of AMBITMICRO's "Ambitmicro" trademark. After receiving the lawyer's letter, AMBIQ MICRO, INC, in July of the same year, it submitted an invalidation request to Trademark Appeal Board of the State Administration for Industry & Commerce of the People's Republic of China, on the grounds of malicious preemptive registration of AMBITMICRO’s trademark, and successively applied for the registration of "AMBIQ MICRO" and other trademarks on the 9th category of goods in mainland China, Hong Kong, Macau, and Taiwan. The trademarks registration in mainland China was objected to by AMBITMICRO, but the rest were approved for registration. In addition, AMBITMICRO did not operate after its establishment and only reached a transaction with an outsider for RMB 8,700 on April 26, 2018. AMBITMICRO’s "Company News" column on the website is all news that has nothing to do with AMBITMICRO.

AMBITMICRO believes that the "Ambiq Micro" chip and other products produced and sold by AMBIQ MICRO, INC and Fujitsu Shanghai have infringed its "Ambitmicro" trademark rights, and sued to the People's Court of Shanghai Pudong New Area, demanding the two defendants to stop the infringement, AMBIQ MICRO, INC compensating RMB 400,000, and Fujitsu jointly and severally liable for RMB 50,000 of that amount.

The court held that in the first instance, AMBIQ MICRO, INC had been selling the accused products in China through distributors since January 2014. Before the plaintiff applied for a registered trademark, the accused products had a certain sales scale in China, and were promoted through various means, and were highly recognized in the industry in 2016, which could be identified as having a certain influence in the integrated circuit industry. The products are technology-intensive products, and the plaintiff does not have the technical ability, and also professes that it does not understand the industry. However, the plaintiff applied for the registration of the trademark in question in the month of the company's establishment. After the registration was approved, it began to send a large number of infringement warning letters and complained to the regulatory authorities. It can be seen that his application for registration of the trademark in question was suspected of deliberately targeting AMBIQ MICRO, INC. The plaintiff did not operate the company for a long time after its establishment and only reached a transaction on small storage devices with people outside the case, which did not conform to the usual practice of using trademarks in commercial activities. The content of its website promoting goods was obviously unreasonable. Based on this, it can be determined that the plaintiff’s application for registration of the trademark in question did not have real intentions of use and was for improper purposes; at the same time, the plaintiff’s acts of sending infringement warning letters, administrative complaints, and filing lawsuits in this case after the registration was approved is an abuse of right. The court, therefore, held that the plaintiff's application for registration and exercise of trademark rights is in violation of the principle of good faith and ruled to dismiss his claims. After the judgment, neither party appealed.

Typical meaning

This case involved the regulation of the priority right defense review of malicious squatting of trademarks. If the plaintiff’s preemptive registration of the trademark does not have the purpose of use, nor did it actually use it, which obviously violates the principle of good faith, the defendant’s earlier use of the trademark "has a certain impact" proof standard can be reasonably reduced to avoid the excessive burden of proof and high standard of proof to negate the goodwill accumulated on the unregistered trademark easily. If the defendant has evidence to prove that the previously used trademark has been continuously and stably used in a certain geographical range and field, and has a certain amount of business performance or publicity; so that the trademark is known to the relevant public in the specific area or field, it can be concluded that the trademark has "a certain influence".