An End to Trademark Re-filings? Getting the Most Out of the New Rules on Suspension of Trademark Review Procedures in China

Issue: 2023-07

A lot of brand owners are frustrated of the need to repeatedly re-file their trademarks pending the proceedings in removing prior marks, which not only increases the costs, but also creates uncertainty as more subsequent citations may emerge.  A lack of formal procedure for suspension of trademark refusal review is attributed to such a phenomenon.  Good news to brand owners is that the China National Intellectual Property Administration (CNIPA) published a guidance note in June 2023, for the first-time specifying circumstances warranting a suspension of the trademark review procedures with the aims to lower prosecution costs and achieve better utilization of administrative and judicial resources.  We will walk you through the guidance note and discuss the potential implications on future prosecution strategies in China.

Ten Specific Circumstances Justifying Suspension

The new rules apply to (1) trademark refusal reviews, (2) opposition reviews, and (3) invalidations.  The principle of necessity applies when deciding whether to suspend examination.  If the outcome of pending actions against prior marks has a material impact on the outcome of the review cases, the examination procedures should be suspended.

The guidance note set out seven circumstances where a suspension should be granted and three circumstances where a suspension may be granted, details of which are set out below: -

Circumstances which Suspension Should be Granted

Applicable Cases: Trademark Refusal Reviews, Opposition Reviews, and Invalidations

1. The cited mark is in the process of name change or assignment, which, if approved, can resolve the conflict of rights;

2. The cited mark has expired and is pending renewal or is within the grace period;

3. The cited mark is in the process of being withdrawn or surrendered;

4. The cited mark is cited merely because it has been cancelled (due to reasons other than non-use) or invalidated or has expired for less than one year (after which the citation objection will be waived); and

5. The action against the cited mark has been concluded, but the decision has yet to take effect, or the action is pending CNIPA’s reexamination as directed by the Chinese courts.

Applicable Cases: Opposition Reviews and Invalidations

6. The status of the prior right must be based on the outcome of another action that is being heard by a Chinese court or processed by an administrative authority.

Applicable Cases: Trademark Refusal Reviews

7. The status of the cited mark must be based on the outcome of another action that is being heard by a Chinese court or processed by an administrative authority. To rely on this, trademark applicants must submit a suspension request.

Circumstances which Suspension May be Granted

Applicable Cases: Trademark Refusal Reviews

8.  The cited mark is subject to invalidation based on bad faith, and the bad faith of the cited mark owner has been confirmed in earlier actions. It is stipulated that examiners can suspend refusal review procedures on their own volition even though no suspension request has been made by trademark applicants. This aims to address the situation where squatters keep re-filing their marks to block brand owners’ trademark applications.

Applicable Cases: Trademark Refusal Reviews, Opposition Reviews, and Invalidations

9.  Based on the circumstances of review cases, examiners may suspend the cases if they consider it necessary to await decisions or judgments on earlier actions involving identical or related facts. It is again stipulated that examiners can suspend examination procedures on  their own volition even though no suspension request has been made. The goal is to ensure consistency in examination standards and to avoid conflicting decisions.

10. For circumstances other than the abovementioned, examiners may suspend    based on the principle of necessity and for benefit of legitimate right owners.

An Encouraging Development

In the past, whether suspension may be granted was entirely at the discretion of handling examiners.  To achieve the CNIPA’s goal in expediting examination procedures, most examiners tend to strictly abide by the performance pledge and issue decision without regard to the proceedings taken against the prior marks.  Trademark applicants have no choice but to keep re-filing their marks and/or lodging appeals to the Chinese Courts, in the hope that the prior marks could be removed before the issuance of the final decision on their own applications.  This significantly increases prosecution costs, and creates uncertainty.

The new rules are in line with the CNIPA’s objective in deterring unnecessary and illegitimate repeated trademark filings as evident in the draft amendments to the PRC Trademark Law published in January 2023.  By introducing a more formal suspension procedure, and by setting out specific circumstances under which suspension should or may be granted, this would help minimize or even eliminate the need for legitimate trademark re-filing in the future.  This also helps address the public’s concern over the proposed ban on trademark re-filing under the draft amendments.

The new rules are indeed taken from the chapter “Standards for Suspension of Review Cases” of “Working Policy for Examination and Trial of Trademark Review and Adjudication Cases” recently published by the CNIPA, which is an internal policy document for examiners.  Examiners are thus expected to follow and implement the abovementioned rules in examination.

Getting the Most Out of the New Rules

According to the guidance note, it is not mandatory to submit a suspension request to be benefited from the new rules, except under the circumstance (7) which trademark applicants are required to submit a request no later than the expiry of the three-month supplemental period after the filing of refusal review applications.  Nonetheless, we still recommend submitting suspension requests under all applicable circumstances to make sure that examiners are aware of the need to suspend.  Requests should be accompanied with details of pending actions and detailed explanations on how the outcome of the pending actions will materially affect the outcome of the present proceedings, together with the specific circumstance(s) that may be applicable.

The guidance note also specifies that the timing and/or the applicant of the action lodged against a prior mark are not relevant factors when deciding whether to grant suspension.  In other words, even if the pending proceeding against the cited mark was lodged by a third party, and/or the proceeding was only lodged after the filing date of a trademark application, the pending proceeding against the cited mark may still be a valid reason for suspension.

However, it is not entirely clear as to how this suspension procedure will work out, in particular we still may not receive any official notice signifying if the suspension request is granted or not.  With this relatively new guidance note and the procedure has yet to be made as a formal procedure under the PRC Trademark Law, it is suggested that trademark applicants may still adopt the existing re-filing strategy in the interim, and we will keep you updated on the exact running of the suspension procedure and how the filing strategy is to be adjusted going forward.

© Vivien Chan & Co., Newsletter issue 07, July 2023

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