In June 2023, the Trademark Review and Adjudication Department (“TRAD”) under the China National Intellectual Property Administration (“CNIPA”) adopted internal rules permitting the suspension of cases pending before the TRAD (“TRAD Suspension Regulations”). These rules will now allow trademark owners to avoid the cost and inconvenience of being forced to file additional “back-up” applications to maintain rights in the queue. Up until now, that strategy has been the accepted best practice for minimizing prosecution costs and maintaining priority on the register. This is because both the TRAD and the BIPC, which have always had the discretion to grant requested suspensions, had almost universally declined to exercise the same for the last several years, forcing brand owners to choose between expensive court appeals or less-expensive back-up applications.
Although the new rules have not been formally published, their substance was explained in a document recently issued by CNIPA.[i] This document confirms that suspensions may be granted in cases involving appeals of rejected applications and oppositions, as well as invalidations (subject to certain conditions covered later in this update).
Shortly after the issuance of the TRAD Suspension Regulations, the Beijing Intellectual Property Court (“BIPC”), the first-instance court for trademark rejection appeals, also announced its own new pre-docketing practice (“BIPC Pre-Docketing Practice”) on the same issue. Under the BIPC Pre-Docketing Practice, trademark owners in trademark refusal appeals will be permitted to seek a 12-month suspension of their appeal where the status of the cited mark(s) remains uncertain.
As is always the case, and while these new practices are steps in the right direction, it remains to be seen how these new rules will practically be enforced going forward, particularly in respect of already-pending cases. For example, as part of these changes, TRAD officials have informally suggested that requests for suspensions filed before the issuance of the TRAD Suspension Regulations may now be reconsidered. That said, out of an abundance of caution, consideration should strongly be given to renewing or filing new suspension requests in cases already pending before the TRAD to increase the likelihood of approval of such requests and to minimise the risk that prior requests might be overlooked by the TRAD.
Background
In response to a People’s Republic of China (“PRC”) Trademark Office (“TMO”) rejection of a trademark application due to the citation of “similar” prior trademarks in respect of “similar” goods or services, trademark owners have a variety of tools at their disposal to eliminate those prior marks. These include:
- oppositions against the prior application (if the prior mark has not been registered and is published for opposition);
- non-use cancellations (if the prior mark has been registered for at least three years);
- cancellation of the prior registration on grounds of genericness; and
- invalidation of the prior registration (if the prior mark has been registered for less than five years).
At the same time, the trademark owner can file an appeal of the TMO’s decision to the TRAD in order to maintain the application’s validity whilst actions against the cited prior marks run their course.
In that regard, however, the timeframe for the TRAD’s review of refusal appeals has always been shorter than those for the actions against those cited trademarks (and has been getting progressively shorter still over the last few years). These timelines currently stand as follows:
- Appeal against preliminary refusal of trademark application: as fast as six to eight months from the filing date of the appeal.
- Opposition: initial (appealable) decision around 13 months from the filing date.
- Non-use cancellation action: seven to 10 months from the filing date (assuming no appeals are filed); plus an additional two to three months for the TMO to confirm that no appeal is filed (total: nine to 13 months for first-instance decision).
- Cancellation based on genericness: seven to eight months from filing date (assuming no appeals are filed); plus an additional two to three months for the TMO to confirm that no appeal has been filed (total: nine to 11 months).
- Invalidation action: 11 to 12 months from the filing date (assuming no court appeal is filed); plus an additional four months for the TMO to confirm that no court appeal is filed (total: 15 to 16 months).
Due to the above timeframes, it is always a near certainty that a TRAD decision in any refusal appeal will be issued well before decisions on actions against the cited marks are issued, or indeed, are final. This makes it reasonable to expect a suspension of the TRAD’s review pending outcomes in those dependent actions.
The PRC Trademark Law does not provide any explicit guidance for the suspension or coordination of dependent trademark actions, however. That said, TRAD examiners have always had the discretion to decide whether to suspend cases. Up until 2020, the TRAD was generally willing to exercise that discretion to suspend reviews of refusal appeals, so long as appealing trademark owners had affirmatively filed actions against the cited marks prior to filing their refusal appeals.
However, beginning in 2020, the TRAD (without issuing any formal notice it was doing so) drastically changed its policy. Presumably, this change was intended to help deal with the significant backlog of cases under which TRAD examiners were suffering (itself a natural consequence of rampant unchecked trademark piracy in China). As a result, the TRAD began rejecting nearly all suspension requests. Indeed, suspensions were only really granted in exceptional cases involving prolific bad-faith filers or where the cited mark has been the subject of a final decision that had not yet taken effect merely due to procedural requirements. This meant that trademark owners were forced to consider filing expensive court appeals to maintain the validity of their applications. Unfortunately, however, both the BIPC and Beijing Higher People’s Court similarly began refusing requests for suspension in most cases.
With suspension requests basically a dead letter with both the TRAD and the courts, trademark owners naturally took another path: filing multiple back-up applications for the identical mark in lieu of filing refusal appeals to minimise prosecution costs and maintain priority. Of course, this practice was not perfect, as by abandoning their earlier applications, trademark owners risked pirates or other third parties filing intervening marks that might themselves block the trademark owner’s backup applications, potentially adding to their woes.
More recently, the need to file backup applications had become even more acute, with the TMO consistently shortening its examination period for identical back-up applications, issuing refusal notices for such applications in around three months from their filing date (down from four to six months previously).
This seemingly endless process of filing and refiling backup applications to stay one step ahead of the TMO, the TRAD, and the pirates had become utterly commonplace over the last few years. Indeed, it is not unusual to identify trademark owners that have filed as many seven or eight identical applications, particularly where the owners of the cited marks themselves also undertook multiple filings to maintain their own rights.
To add insult to injury, Article 14 of the latest draft revision to the PRC Trademark Law issued in January 2023[ii] indicated that under the proposed amended law, registrants would be prohibited from filing new applications for the same mark on identical or similar goods and services. This rule was clearly designed expressly to address the issue of backup filings, again, an issue caused directly by the TRAD’s and the ’ stubborn refusal to suspend review of refusal appeals pending outcomes in respect of actions against cited marks.
Interestingly, the same draft revision to the Trademark Law that sought to prohibit identical filings also presaged changes to the TRAD’s and BIPC’s suspension rules. Under the revised article, both the TMO and TRAD would be expressly permitted to suspend the handling of appeals and disputes (including oppositions and invalidations) pending outcomes in related actions. Notably however, the wording used in draft Article 42 did not give trademark owners the explicit right to request suspensions or to receive formal responses to such requests, and therefore did not reflect a significant divergence from the status quo. Accordingly, the TRAD Suspension Regulations and BIPC Pre-Docketing Practice appear to offer very welcome relief to long-suffering trademark owners. We examine these new policies in the sections below.
TRAD Suspension Regulations
Circumstances for Suspension
The TRAD Suspension Regulations explain in a fair degree of detail the circumstances under which suspensions must and may be granted.
For refusal appeal cases, where the status of the cited mark is subject to attack in a case pending before the TMO, TRAD, or courts, and the applicant files a suspension request, the TRAD is now required to suspend its review of the refusal appeal.
For all categories of cases – including refusal appeals, opposition appeals, and invalidations – the TRAD Suspension Regulations also require suspension when one of the following conditions apply:
- The disputed or cited mark is the subject of a pending name change or assignment application, and the conflict will no longer exist after the name change or assignment is approved;
- The cited mark has expired and is in the process of renewal or within the grace period for renewal;
- The cited mark is the subject of a pending application for deregistration or withdrawal;
- The cited mark has been cancelled or invalidated, or not renewed following expiration, but is still within the one-year period under which, by law, the refused mark may not yet be approved; or
- A case relevant to the fate of the cited mark has been concluded, but procedures are still pending to finalise the status, such as publication of a decision or re-issuance of the decision based on a court decision.
Meanwhile, the TRAD has the discretion – but is not required – to suspend its review where one of the following three conditions applies:
- The cited mark in a refusal appeal case is the subject of a pending invalidation action, and the bad faith of the cited mark owner has been confirmed in other cases. In these circumstances, even if the applicant has not filed a suspension request, the examiner has the discretion to decide whether to suspend the appeal;
- There are other pending cases in which the relevant facts are identical or similar to the current case, and suspension of the current case is desirable to ensure the consistency of examination criteria and avoid the issuance of conflicting decisions; or
- Other circumstances exist where it is deemed necessary to suspend to benefit the lawful right owners.
Timing for Filing a Suspension Request
Requests for suspension will need to be filed no later than the deadline for filing supplemental submissions in the relevant case, i.e., within the three-month supplemental period after the initial filing.
While not addressed in the TRAD Suspension Regulations, if circumstances later arise that clearly warrant suspension of a case before the TRAD, it is reasonable to assume the TRAD will consider such requests. But whether the TRAD will do so in practice remains to be seen.
Updating the TRAD on Co-Pending Cases
Once the status of the cited mark has been confirmed, the applicant should submit relevant evidence via a supplemental submission, and the TRAD can then resume its review of the case.
BIPC Pre-Docketing Practice
Circumstances for Suspension
After filing the initial appeal to the BIPC, if the status of the cited mark(s) remains uncertain, then the applicant can use the BIPC Pre-Docketing Practice to suspend the case for 12 months. If the status of the cited mark(s) is confirmed within the 12-month period, then the case will move forward to formal examination.[iii]
The BIPC Pre-Docketing Practice only applies where:
- the refusal appeal is based on relative grounds only (i.e., citations of prior marks), and not on absolute grounds (e.g., descriptiveness, non-distinctiveness, negative impact on social morality, etc., refusals which have become worryingly more commonplace over the last few years);
- the plaintiff has taken actions against the cited mark(s) before the issuance of the TRAD’s decision; and
- the status of the cited mark(s) will substantively affect the decision of the disputed mark.
In relation to point (a) above, it is noted that where a mark was rejected both due to absolute grounds and prior citations, the BIPC Pre-Docketing Practice will not apply.
The BIPC Pre-Docketing Practice will also only apply to cases filed after 25 June 2023.
Impact on Filing of Formality Documents?
Foreign plaintiffs are still required to prepare and submit a full set of legalised formality documents for the court appeal. At present it is unclear whether these legalised formality documents need to be submitted within six months of filing the appeal (which was the standard practice) or by the end of the 12-month suspension period.
Conclusion
How the TRAD Suspension Regulations and the BIPC Pre-Docketing Practice will be implemented in practice is unclear at this stage. In general, however, the Regulations appear to be a positive development, finally providing trademark owners with the right to formally request the suspension of cases – and a reasonable expectation that such requests should be granted.
Now that the TRAD Suspension Regulations have been issued, hopefully CNIPA will now consider measures to facilitate the consolidation and acceleration of related cases, particularly those involving bad faith filers. Consolidation and acceleration are key components to achieving more efficient handling of such cases and helping victim brands to secure their rights more quickly and cost-effectively.
Dan Plane and Jeremy Chiu
Endnotes
[i] See CNIPA, ‘Interpretation of the Circumstances for the Suspension of Cases’, CNIPA Chinese Web Page, 13 June 2023), <https://sbj.cnipa.gov.cn/sbj/ssbj_gzdt/202306/t20230613_27700.html>.
[ii] See Joe Simone, ‘SIPS White Paper on Proposed Trademark Law Revision in China’, SIPS (Web Page, 15 February 2023) <https://sips.asia/knowledge/legislation-and-policy/white-paper-on-proposed-trademark-law-revision-in-china/>.
[iii] See BIPC, ‘BIPC Pre-Docketing Application Form’, BIPC () (Chinese Web Page, 21 June 2023) <https://bjzcfy.bjcourt.gov.cn/article/detail/2023/06/id/7353498.shtml>.
