On June 11, 2021, the China National IP Administration (CNIPA) issued a draft of its updated Trademark Examination and Review Guidelines (the “Guidelines”) for public comment. It is expected that CNIPA will process public comments quickly and issue a final version of the Guidelines by the end of the summer.
The draft Guidelines – which span over 700 pages – cover all phases of prosecution, including examination, rejections and appeals handled by the Trademark Review and Adjudication Division of CNIPA.
In general, the draft breaks little new ground, and leaves many long-standing problems unaddressed (see below). However, the Guidelines codify a range of positive decisions and practices that have emerged over the last few years and should in this sense be regarded as a positive contribution to trademark practice in China. The draft Guidelines – like earlier versions – cite case examples throughout, which can be cited by trademark attorneys in their submissions to CNIPA in appeals, oppositions, and invalidations.
Perhaps the most helpful provisions in the draft Guidelines are those relating to bad faith trademark filings. (See here for SIPS’ latest overview of efforts by the courts and CNIPA to address bad faith filing and trademark warehousing.)
1. Factors for Determining Similarity of Trademarks
The draft Guidelines explain the principles for assessing similarity between trademarks (Section 2, pages 163-164), including factors that are not inherent to the marks, such as their fame, the degree of attention paid by the public, and the subjective intent of the applicant (helpful in cases involving bad faith filings).
2. Similarity of Marks with Obscure Meanings
The Guidelines suggest that examiners need not regard two marks as similar where their meanings are obscure to Chinese consumers (Section 2, page 181). This provision should prove particularly helpful where examiners regard two marks as conceptually similar based solely on dictionary entries, but where the Chinese public is less likely to actually know their meanings – and thus less likely to be confused.
3. Well-Known Marks
The Guidelines state that trademark owners will be blocked from enjoying “well-known” status for their marks if they file fraudulent evidence in support of such claims (Section 2, page 328). They also indicate that parties that have been blacklisted under China’s “social credit” system will be ineligible to enjoy well-known status (Section 2, page 323). (For an explanation of this system as applied to IP matters, see SIPS memo here.)
4. Names of Copyright Works and Characters
The Guidelines codify existing practice by confirming protection for the names of copyright works (such as books or movies) as well as the names of characters within such works (Section 2, pages 365-366).
5. Bad Faith Filings
(a) Case Examples – The Guidelines offer a number of case examples, which will be useful as reference when authorities deal with bad faith filings where the applicant lacks true intention to use (Part 2, Section 2, pages 34-49). The cases fall under the following categories:
- Warehousing – Where a trademark applicant has applied for a huge number of trademarks, obviously exceeding the requirements of normal business activities and lacking a real intention to use, thereby disrupting the order of trademark registration;
- Serial Piracy – Where a trademark applicant has, on a large scale, reproduced, imitated or copied trademarks belonging to multiple entities, the said trademarks possessing a definite degree of fame or being strongly distinctive, thereby disrupting the order of trademark registration;
- Abusive Filings Targeting One Brand – Where a trademark applicant has filed repeat applications to register the same entity’s specific trademark, the said trademark possessing a definite degree of fame or being strongly distinctive, thereby disrupting the order of trademark registration;
- Trade Names/Trade Dress, etc. – Where a trademark applicant has filed a large number of applications to register signs that are identical with or similar to commercial signs such as third parties’ business names, abbreviations of business names, e-commerce names, domain names, product names, product packaging and product get-up, as well as third parties’ advertising slogans, external designs, etc., which are famous and have already become recognizable;
- Famous Names – Where a trademark applicant has filed a large number of applications to register signs that are identical with or similar to public cultural resources such as the name of a famous person, the name of a famous work or role name, or a third party’s work of fine art that is famous and already recognizable;
- Geographical Names, etc. – Where a trademark applicant has filed a large number of applications to register signs that are identical with or similar to the names of administrative divisions, mountains and rivers, scenic spots, buildings, etc.;
- Generic/Descriptive Terms – Where a trademark applicant has filed a large number of applications to register non-distinctive signs such as generic names, industry terms, and signs that directly describe the quality, main raw materials, functions, uses, weight, quantity, etc., of the specified goods or services;
- Trademark Trafficking – Where a trademark applicant has filed a large number of trademark registration applications, and assigned a large number of trademarks to a wide range of assignees, disrupting the order of trademark registration;
- Extortioners – Where a trademark applicant has engaged in acts such as selling [trademarks] in large quantities with the intent of seeking improper benefits, forcing commercial cooperation from prior users of a trademark, demanding high assignment fees, licensing fees or compensation for infringement, etc.; and
- Catch-All – Where there are other circumstances that can be viewed as applying to register trademarks in bad faith.
(b) Requests for Evidence from Suspected Bad Faith Filers – The draft gives examiners the authority to request applicants suspected of filing in bad faith to provide evidence of use or an intention to use their marks (Part 3, Chapter 19), including on a bulk basis where the applicant has filed multiple applications at the same time. Where the applicant fails to respond or its evidence is unconvincing, CNIPA may then reject the application.
(c) Assignments – The draft also confirms the authority of CNIPA to reject applications for the assignment of marks registered by bad faith filers (Part 1, Chapter 11, page 166). (See here for a recent SIPS memo commenting on the implications of this change in practice.) It remains unclear whether the TRAD will approve assignments on appeal where the assignee is the legitimate trademark owner or an investigator acting under its instructions. It likewise remains unclear whether CNIPA will be willing to forego rejecting assignments if the genuine trademark owner has informed examiners of its involvement during the initial examination process.
(d) Bad Faith Filing by Related Party – The Guidelines offer additional factors for examiners to consider when determining that the victim brand owner and the applicant/registrant had a relationship for the purposes of Article 15.2 of the Trademark Law (Part 2, Chapter 12, page 347), including geographical proximity, filings by relatives or employees, etc.
(e) Trademark Agents – The Guidelines clarify that a company which is doing trademark agency work may be regarded as a trademark agency for the purposes of Article 19 of the Trademark Law, even if it is not formally recorded as a trademark agency with CNIPA (Part 2, Chapter 13, page 351). Under Article 19 of the Trademark Law of China, trademark agencies are prohibited from registering marks in their own names, except as required to support their own branding needs as a trademark agent.
(f) Limitation of Article 44.1 – The Guidelines discourage examiners from applying Article 44.1 of the Trademark Law in actions targeting “improper registrations” where other provisions in the law may also be relied upon to invalidate or reject a mark. An exception is however offered where bad faith is clearly established (Part 2, Chapter 13, page 377)
6. Collective / Certification Trademarks
The Guidelines confirm that where a party has filed for a collective or certification mark, it is prohibited from filing for the mark as a standard trademark, and vice-versa.
As noted above, the Guidelines do not address a number of long-standing concerns of trademark owners which are briefly explained below. In some cases, CNIPA has likely concluded that the concerns require an amendment to the Trademark Law or the issuance of new administrative regulations.
1. Suspension of Co-Pending Cases
CNIPA only rarely agrees to suspend the examination of applications, appeals, oppositions or invalidations where the outcome is contingent on the outcome of a co-pending case. The exceptions are mainly where CNIPA itself asks a party if it agrees to suspension of examination (a rare request, mainly applied to fresh applications where the cited mark is under non-use cancellation proceedings), or where a change of name or address for cited marks is in progress. As a result, trademark owners are generally advised to refile applications – in many cases multiple times – and perhaps abandon applications as a means of minimizing costs. It is not clear why CNIPA remains so resistant to expanding the practice of suspending proceedings based on requests from the affected parties, and what benefit is created by ignoring such requests.
2. Inherent Registrability
CNIPA appears to be rejecting applications more often than in years past based on absolute grounds such as perceived non-distinctiveness / descriptiveness or based on perceptions that the mark is possibly deceptive. Further, the TRAD and courts seem to uphold such decisions in appeal proceedings as a reflex, and without deep consideration of the merits. Too often, appeal decisions fail to explain the factual basis on which such decisions are reached, and thus appear to ignore extensive evidence of acquired distinctiveness, inherent distinctiveness, and the existence of analogous marks on the register in China as well as abroad. CNIPA is urged to support its decisions in more detail. Counterfeiting and bad faith registration are very real problems, which can best be addressed by allowing trademark owners to secure registrations. Arguably, the criteria for inherent registrability should err in favor of applicants, keeping in mind that there are procedures for any party to oppose preliminarily approved applications or to invalidate registered marks at any time.
3. Acquired Distinctiveness and Consent Letters
Contrary to practice in many other countries with similarly-sophisticated examination practices, CNIPA will uniformly reject applications for marks that could easily be deemed registrable with evidence of acquired distinctiveness or where the owner of the cited mark is willing to provide a consent letter. As a result, such applications can only be pursued to registration through the filing of appeals, which typically take 12 to 18 months. It is therefore recommended that CNIPA allow applicants to provide evidence of acquired distinctiveness and consent letters during the examination process, rather than only incidental to appeals.
It should be noted in this regard that the draft Guidelines do allow examiners to issue Opinion Letters offering applicants for 3-D marks, sound marks and the like, to provide evidence of acquired distinctiveness, such as evidence of use, sales statistics, etc. It is hoped that this practice will gradually be extended to cover a wider range of marks that are deemed non-distinctive.
4. Access to Evidence and Opportunity to Comment
At present, petitioners in oppositions and non-use cancellations in the first instance are prohibited from accessing copies of responses by respondents – even in cases where bad faith registration is alleged – and thus have no opportunity to present their observations on such responses. CNIPA has been encouraged on many occasions to allow access to such submissions. Doing so is important for ensuring transparency and fairness, as well as for reducing the need for unnecessary appeals.
5. Consolidation and Acceleration of Cases
In practice, it is unusual for CNIPA to handle related cases on a consolidated and accelerated basis, even where bad faith is obvious and the affected trademark owner is suffering significant harm, e.g., through sales of infringing goods by the registry pirate. CNIPA referred to the possibility of accelerating and consolidating cases in a notice issued in March 2021 focused on bad faith filings. (See here for details.) And as noted above, the draft Guidelines also imply that CNIPA may handle related cases filed by bad faith filers on a consolidated basis. But it is hoped that a future iteration of the Guidelines will provide a clearer basis for supporting such requests by victim brand owners, and not just upon CNIPA’s own determinations.
6. Consent Letters from Related Companies
In cases where a cited mark is identical or nearly identical to the applicant’s mark, but the owners of both marks are commonly owned affiliates, the TRAD has traditionally refused to consider consent letters, treating such cases if the parties were entirely independent. Companies have legitimate business reasons for having particular marks held by different corporate entities, and the trademark system should adapt its practices to support such business practices rather than attempting to change them without good reason. It is therefore hoped that CNIPA will consider making corresponding changes in its policies and procedures to allow for approval of such applications.
7. Failure to Respond to Oppositions and Invalidations
Quite often, bad faith filers will refrain from responding to oppositions and invalidations. By law, CNIPA is obligated to examine such cases and issue a decision, effectively ignoring (at least in the vast majority of cases) the alleged bad faith filer’s failure to respond. The draft Guidelines do not address this situation and it is hoped that CNIPA will consider assertions of fact by petitioners as true where applicants or registrants fail to respond, as doing so will help to simplify proceedings and deter additional bad faith filings.
- 商号/包装装潢等——大量申请注册与他人企业字号、企业名称简称、 电商名称、域名，有一定影响的商品名称、包装、装潢，他人知名并已产生识别性的广告语、外观设计等商业标识相同或者近似标志的；
- 通用名称/描述性术语——大量申请注册指定商品或服务上的通用名称、行业术语、直接表示商品或服务的质量、主要原料、功能、用 途、重量、数量等缺乏显著性的标志的;
(f) 四十四条第一款的限制—-标准规定如果针对”不当注册”的案件中能够适用《商标法》的其他条款，则不再适用第四十四条第一款的规定但是，恶意明显的例外 （第2部分，第13章，第377页）。