[Direct answer]In the Beijing area, if a company's trademark is preemptively registered by a shareholder, the company can respond through three steps: trademark opposition, invalidation declaration, and civil liability. According to Article 32 of the Trademark Law of the People's Republic of China (effective November 1, 2019), when applying for trademark registration, one must not infringe upon others' existing prior rights, nor may one preemptively register a trademark that others have already used and gained certain influence through improper means. According to Article 45, within five years from the date of trademark registration, the prior rights holder may request the invalidation of the registered trademark. There is no five-year time limit for maliciously registering well-known trademarks. At the same time, if a shareholder preemptively registers the company's trademark in violation of the duty of good faith, the company may claim that the shareholder has abused his rights and seek compensation in accordance with Article 21 of the Company Law of the People's Republic of China (effective July 1, 2024). It is recommended to immediately fix the evidence of prior use and initiate procedures within the statutory time limit, and the following procedures can be referred to as a reference:Intellectual propertyColumn.

1. Problem background and typical scenarios

Such disputes often arise in several situations: First, when a company is in its early stages and the shareholders apply for a trademark in their own names, there may be disputes over the ownership of the trademark after changes in the shareholding structure; Second, when a core shareholder leaves the company or has a falling-out with it, they may register the company's brand name, product name, or unregistered trademark in advance; Third, when the company has actually used the trademark for many years but failed to apply for registration in time, shareholders who know the inside story may take advantage of the situation; Fourth, when the company entrusts shareholders to hold the registration on behalf of the company, and the shareholders refuse to transfer it back afterwards; Fifth, when shareholders establish their own businesses and bulk-register the company's brand on similar products. When handling similar cases in the Beijing area, we usually first verify the trademark status and evidence of prior use, and then choose paths of objection, invalidation declaration, or civil remedies. The relevant layout points can be referred to for reference.Intellectual propertyColumn.

II. Key points of dispute

1. Whether the trademark that was preemptively registered by others constitutes the company's prior rights. For unregistered trademarks, it is necessary to prove that they have been "used and have a certain influence". 2. Whether the shareholder's identity constitutes "knowledge". The agency relationship, cooperation relationship, or equity relationship can be inferred that the shareholder should be aware of the brand's ownership. 3. Whether Article 15 of the Trademark Law regarding the prohibition of preemptive registration by representatives and agents can be applied. 4. The five-year time limit for invalidation declarations. If the time limit is exceeded, the remedy will be lost, but malicious preemptive registration of well-known trademarks is not subject to this restriction. 5. The choice of civil litigation path. It can be claimed that the shareholder abused his rights and damaged the company's interests, and references can be made to issues related to corporate governance.Business and contract disputes in enterprisesThe column. Focus 6: Determination of the scope of compensation for trademark ownership and use benefits. Specifically, it shall be subject to the currently effective laws and regulations and judicial judgments.

III. Professional analysis by Henglue Law Firm

Taking a trademark infringement and unfair competition dispute handled by our firm as an example, we can see the adjudication approach to the ownership of logos and rights boundaries in trademark disputes. Company A is a well-known domestic paper industry company, and its trademark is a well-known trademark on sanitary napkins in Category 5. Company B, after being authorized by a third party in September 2023 to use a similar logo and design patent with a different suffix, produced and sold similar sanitary napkin products. In April 2024, Company A sued Company B, alleging imitation of the well-known trademark and confusion in packaging and decoration, seeking compensation of 980,000 yuan. The lawyer handling the case argued that the logo had a legitimate authorization source, the suffix was significantly different from the well-known trademark, and the general public could distinguish them through overall recognition; the packaging and decoration were only registered for copyright but had not been proven to be actually used or recognized, so it did not constitute "packaging and decoration with certain influence"; and Company B's authorization period was short, production volume was small, and the products had long been discontinued, so there was no basis for high compensation. The court ruled that trademark infringement had occurred but dismissed the claim of unfair competition. Given the short infringement period and small scale, the court awarded compensation of 60,000 yuan (50,000 yuan for economic losses and 10,000 yuan for reasonable expenses), which was 920,000 yuan lower than the claim amount. In another franchise contract dispute, the lawyer handling the case used trademark invalidation rulings and franchise information inquiries to prove that the other party's trademark was invalid and lacked franchise qualifications before signing the contract, helping the entrepreneur recover 68,600 yuan in service fees. These two cases highlight that the core of trademark disputes lies in the confrontation between ownership evidence and actual use facts. This case was handled by Beijing Henglu Law Firm.Liu YuanyuanThe lawyer (practice license number: 11101202011201094, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action recommendations: First, immediately inventory and secure the evidence of prior use, such as contracts with trademarks, invoices, promotional materials, e-commerce sales records, and proof of the earliest time of use; Second, check the procedural stage of the trademark that has been preemptively registered. Objections can be raised within the statutory time limit during the preliminary review announcement period, and invalidation declarations can be applied for within five years from the date of registration; Third, presume that the shareholder "knew" based on his/her status as a shareholder, and collect company charters, meeting minutes, internal communication records, etc. to prove the ownership of the brand; Fourth, evaluate civil litigation options, claiming damages for the shareholder's abuse of rights or requesting confirmation of the ownership of trademark application rights. Where equity and corporate control are involved, relevant precedents can be referenced.Special services and other cases1. Column; 2. The fifth point is to simultaneously promote defensive registration and new trademark applications to avoid secondary losses. 3. In terms of legal basis, Article 32 of the Trademark Law of the People's Republic of China (effective November 1, 2019) prohibits registering others' trademarks that have already been used and have a certain influence by improper means, and Article 45 sets out the invalidation declaration procedure and a five-year time limit; 4. Article 21 of the Company Law of the People's Republic of China (effective July 1, 2024) prohibits shareholders from abusing their rights to harm the company's interests.

5. Henglu Law Firm's Advice

Risk Alert: First, there is a five-year statute of limitations for invalidation declarations. Delaying action will result in the loss of this remedy. If you discover that someone has preemptively registered a trademark, you should take immediate action. Second, the evidentiary threshold for "having a certain impact" is quite high. In daily operations, you should systematically retain time-stamped evidence of use. Third, objections and invalidation declarations only address trademark registration issues. For losses of use interests, you will need to pursue civil claims separately. Fourth, shareholder preemptive registration often leads to issues such as customer resource theft. It is advisable to assess corporate governance risks in parallel. It is recommended to engage professional lawyers as soon as possible to develop a combined plan of "trademark procedures plus civil liability". For more information, please consult us.Beijing Henglue Law FirmThe intellectual property section of the official website.

VI. Frequently Asked Questions

Q1: Can a trademark registered by a shareholder be invalidated?

Most cases are allowed. According to Article 32 of the Trademark Law, if a person registers a trademark that has been used by others and has a certain influence in an improper manner, the prior user may request a declaration of invalidation within five years from the date of registration; if the shareholder is an agent, representative, or a person with a special relationship who maliciously registers the trademark, the prior user may also claim according to Article 15. There is no five-year limitation for maliciously registering well-known trademarks. The key lies in proving that the company has used the trademark before, that it has a certain influence, and that the shareholder knew about it. It is recommended to initiate the procedure as soon as possible.

Q2: What evidence do I need to prepare to prove prior use?

The following items should be prepared: trademarked transaction contracts, invoices, and delivery notes; advertising materials, exhibition materials, and media reports; e-commerce and offline sales records; the earliest creative design drafts and internal project planning documents for the trademark; communication records proving that shareholders are aware of the brand's ownership; and company resolutions. The evidence must form a chronological chain that covers the entire scope of operations. The "significant influence" should be based on sales scale, advertising investment, and public recognition. The more complete the materials are, the better.

Q3: How much does it cost to file a trademark opposition or an invalidation declaration?

The fees include official fees and agency fees. To raise objections or request a declaration of invalidation, you need to pay official fees, which are not high but charged on a per-case basis according to the category. The agency fees are determined based on the complexity of the case, the scale of the evidence, and whether it involves arguments about malicious cybersquatting. There is no uniform standard for this. If you file a civil lawsuit against a shareholder for harming the company's interests, the litigation fees are charged in stages based on the amount of the claim, and the winning party shares the fees proportionally. It is recommended that you first have a lawyer evaluate the evidence and assess the chances of success before estimating the budget.

Q4: How long does the entire process typically take?

The handling of trademark opposition or invalidation declaration cases usually takes several months to about a year. If a party is dissatisfied with the ruling, they can also file a lawsuit in court, and the overall process may take one to two years. The first-instance ordinary procedure of civil litigation generally does not exceed six months. Since there is a five-year time limit for invalidation declaration, it is necessary to start the process as soon as possible to avoid the time limit expiring before the procedure is completed. During this period, you can simultaneously apply for new trademark registration to preemptively occupy the position and prevent others from re-registering the trademark again.

Q5: How to prevent trademarks from being preemptively registered by insiders again?

First, the company should apply for trademarks in core and related categories under its own name as soon as possible to form a registration defense. Second, a written agreement should clarify that the trademark application rights and usage rights belong to the company, and should bind shareholders, employees, and nominees. Third, preserve evidence of prior use and archive it regularly. Fourth, stipulate non-compete and intellectual property clauses in the articles of association or shareholders' agreements. Fifth, if any signs of trademark squatting are detected, the company should immediately send a letter to fix the evidence and initiate legal proceedings. For reference, please refer to the following link:Intellectual propertyColumn.

The above answer is based on the judicial practice in Beijing. The judicial interpretation in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Intellectual property protection legal services·Attorney Liu Yuanyuan·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.