An important Reminder of China's First to File Trade Mark System
In July 2018 ActionSoft filed trade mark infringement proceedings in China against the use by Amazon and Sinnet of trade mark AWS.
On 30 December 2020, The Beijing High Court released their ruling in favour of the plaintiff, ActionSoft Science & Technology Development Co.Ltd. (“ActionSoft”), a Chinese software and data services company.
The Beijing High Court ruled that the defendants, namely Amazon Connect Technology Services (Beijing) Co., Ltd. (“Amazon”) and Beijing Sinnet Technology Co., Ltd. (“Sinnet”), infringed ActionSoft’s exclusive right over the trade mark “AWS”, and ordered Amazon and Sinnet to (a) cease the use of the mark AWS in China; (b) pay CNY 76,723,000 (around NZ$16.3 million) to ActionSoft as compensation; and (c) publish a statement about their infringement actions to eliminate the effects.
This case is interesting and highlights one of the main differences in Chinese law – the first to-file system. Under the first to file rule, the party that applies to register the trade mark first will be generally granted exclusive trade mark rights in China.
From reviewing the evidence we can see that the issues began in 2002, when Amazon began using the AWS mark and did not file a trade mark application.
A brief summary of the facts is as follows:
- In July 2002, Amazon Web Services (AWS) platform was launched by Amazon.
- In 2003, ActionSoft was founded and launched its first AWS version, AWS 2.0 in China.
- In September 2004, ActionSoft applied the trade mark 4249189 AWS covering “design, updating and maintenance of computer software; design of computer system, etc.” in class 42 in China, which was registered in 2008.
- In November 2004, Amazon launched the first AWS service, Simple Queue Service (SQS), for public usage.
- In March 2006, AMS was officially re-launched by Amazon and began offering cloud computing services.
- In October 2012, Amazon applied the trade mark 11577355 “aws marketplace logo” covering “design, updating, rental and maintenance of computer software; computer programming, etc.” in class 42 in China, which was rejected in 2013 due to ActionSoft’s prior registered mark.
- In 2013, Amazon’s AWS China region started its operation and investment expanding in China.
- In July 2018, ActionSoft sued Amazon and Sinnet for trade mark infringement of its mark “AWS”.
As we can see, Amazon was the first to use the trade mark “AWS”. However, ActionSoft is the first to use and register the trade mark “AWS” in China, giving ActionSoft the infringement priority.
Further, one of the arguments raised by ActionSoft was that in 2013, Amazon’s trade mark application was rejected because of the prior registered trade mark in the name of ActionSoft and Amazon continued using the trade mark in China, which met the ground of bad faith in the trade mark infringement proceedings.
If Amazon had undertaken a trade mark search and ceased use of the trade mark, upon seeing the ActionSoft trade mark, this could have lessened the high level of damages granted.
To ensure you are not precluded from entering the Chinese market it is very important to undertake a full search and if available register your trade mark in China as soon as possible.
If you have any questions about protecting your trade marks in China, please free to contact us today.
Article written by Solanda Chen, March 2021