1. Latest updates on the amendment of the PRC Trademark Law
The China National Intellectual Property Administration (CNIPA) published its draft for the 5th amendment to the Trademark Law in January 2023. The CNIPA is now actively promoting the legislative process. They are formulating amendments to the draft provisions, which involves regulating bad faith trademark filings, introducing statement of use requirements, prohibiting trademark re-filings, etc, based on the public feedbacks. Steps have also been taken to amend the Implementing Rules of the Trademark Law. We expect that the CNIPA will soon release their second draft and will keep you posted.
2. Overcoming deceptiveness objections by restricting specifications
When a trademark contains elements which suggest a particular characteristic, but the designated goods/services can cover those which do not possess the suggested characteristic, for example, the registration of “vegan” in relation to “milk”, which can cover dairy and plant-based milk, the CNIPA may raise deceptiveness objections. This is commonly attributed to the strict requirement to adopt broad standardized descriptions prescribed by the CNIPA. Recently, we successfully overcame such objections by strategically adding limitations to the standardized descriptions to ensure that all the designated items possess the suggested characteristics and arguing that the items were sufficiently limited and that consumers would not be misled.
Here are some tips distilled from our recent successful cases. For national applications, limitations should be added to the specifications at the time of filing as we cannot amend the descriptions after substantive examination, though there is a risk that some rigid examiners may object to such limitations and issue notices of correction requiring applicants to strictly follow the standardized descriptions. On the other hand, for international registrations designating China, applicants may file a Form MM6 to add limitations even after objections are raised, and such limitations are generally acceptable.
3. A change in attitude towards letters of consent
In recent years, the CNIPA and the Chinese Courts departed from earlier examination practice and refused to accept consent letters by holding that consent letters alone are generally insufficient to show that there would be no actual consumer confusion, thus maintaining objections due to similarity of marks. We have observed that some examiners and judges have adopted a less rigid practice and accepted consent letters, particularly if there are distinguishable elements additional to the conflicting elements. For instance, the CNIPA allowed the coexistence of “DIAMOND” and “
(DIAMOND LEAGUE & device)”, and the Chinese Court allowed the coexistence of “
(AN XIN DA, CareDriver & device)” and “CareDriver”). We welcome such a change in practice. Nonetheless, applicants seeking to rely on consent letters should still be prepared to lodge appeals to the court.
4. Successful invalidations based on bad faith after the 5-year limitation period
Under the Trademark Law, invalidation actions based on prior rights can be filed within 5 years from the date of registration, but, where the registration is obtained in bad faith, the owner of a well-known trademark is not bound by the 5-year restriction. It is a common interpretation that one must establish both bad faith and well-known status when filing invalidations outside the 5-year window. That said, lately, we successfully persuaded the CNIPA to stretch the wording of the law and invalidate registrations registered for more than 10 years by merely relying on bad faith. In one of our successful cases, the registration was granted in 1998, and our invalidation action was only filed in 2023. We successfully established the owner’s bad faith by submitting, among others, evidence of our client’s use back in 1996-1997, a list of the owner’s other bad faith applications and decisions confirming the owner’s bad faith. It is thus worth exploring the possibility of invalidating bad faith registrations registered for more than 5 years, especially those which cannot be removed via non-use cancellation actions.
5. New suspension practice and reduced trademark re-filings
The CNIPA released a guidance note on suspension of examination of trademark refusal review, opposition review and invalidation cases in June 2023. In short, examination shall be suspended if outcomes of pending actions against prior marks have a material impact on the outcomes of the aforesaid cases. This includes situations such as (i) prior marks are pending name change, assignment, withdrawal or surrender; (2) prior marks have expired or invalidated for less than one year (which they will no longer constitute valid prior marks after the expiry of the one-year period); (3) decisions have been issued against the prior marks but have yet to take effect; and (4) prior marks are pending actions before Chinese Courts or administrative authorities.
Based on our recent cases, the CNIPA will generally suspend refusal review procedures if opposition, non-use cancellation, or invalidation actions are lodged against cited marks before the expiry of the three-month supplemental period after the filing of the refusal review applications. We consider that this new practice has effectively reduced the need to re-file your trademarks. However, trademark re-filing may still be desired if interested marks are core to your business or if there are other prior marks which are not subject to any actions, or if objections other than citation objections are raised, as the CNIPA tends not to suspend the procedure under such circumstances.
6. New administrative appeal procedures to align with CNIPA’s suspension practice
The Beijing Intellectual Property Court published a new policy concerning appeals against trademark refusal review decisions in June 2023. Foreign appellants traditionally enjoy a three-month supplemental period to submit full sets of notarized and legalized / apostilled formality documents to support their appeals. Appeals will then proceed to case acceptance stage, and hearings will be fixed. Applicants may now enjoy an extended 12-month period if the cited marks are subject to actions and their decisions are vital to the outcome. This comes in handy if applicants have commenced further actions against cited marks following unsuccessful attempts (e.g., non-use cancellation reviews after unsuccessful non-use cancellation actions or invalidations after unsuccessful oppositions). To benefit from this new practice, actions against cited marks must be launched before the date of issuance of the refusal review decisions. Similar to the CNIPA’s practice, extension is not applicable if there are other cited marks which are not subject to any actions or objections on absolute grounds are raised.
7. New assignment guidelines: beware when acquiring trademarks from squatters
In Mainland China, trademark assignments only take effect after approval by the CNIPA. The CNIPA issued guidelines on trademark assignment procedures in September 2023 introducing their latest examination practice and circumstances where objections may be raised. If assignors have been hoarding many trademarks with no valid reasons and have records of assigning marks to various assignees, the CNIPA may raise objections and require parties to submit evidence showing genuine intention to use the marks to be assigned. When attending to buybacks, we strongly recommend building in clauses in assignment agreements which require squatters to provide assistance in responding to the CNIPA’s objections and surrendering their registrations should the assignment applications be rejected. The CNIPA also reiterates in the guidelines that subsequent assignments do not alter the fact that a mark was filed in bad faith in the first place and that the mark will still be vulnerable to invalidation.
8. China’s accession to the Apostille Convention
China officially acceded to the Apostille Convention in March 2023, which came into effect in November 2023. This simplifies the authentication of public documents by replacing legalisation with apostille. Previously, when commencing lawsuits before Chinese courts, claimants were required to provide notarised and legalised formality documents, such as powers of attorney, certificates of identity of legal representative and other company documents proving authorities of signatories and companies’ good standing, which could be complicated and time-consuming. By replacing the legalisation process with apostille, this helps speed up the preparation of foreign documents for use in Mainland China, making it possible to have them ready within the three-month supplemental period.
9. Hong Kong Customs eases the requirements for recordal
The Hong Kong Customs is responsible for investigating complaints and enforcement actions against alleging trademark or copyright infringement. Their power includes seizing infringing products at the border, as well as investigating and conducting raid action in physical stores within Hong Kong. Unlike Mainland China, there is no formal customs recordal system in Hong Kong. In the past, customs recordal was conducted on an as-need basis – brand owners would have to prove the existence of potential infringement and thus the need to record and protect their trademarks or copyrighted works. The existence of potential infringement is no longer a prerequisite, and brand owners may proactively record their IP rights with the Customs. An examiner also has to be appointed to assist the Customs in authentication and giving evidence in criminal actions. We have developed a close working relationship with Customs and have vast experience in acting as authorized examiners for our clients and testifying as expert witnesses in court proceedings. We are also regularly invited by the Customs to provide trainings on anti-counterfeiting features of brands that we are representing. Working with the Hong Kong Customs is an effective complement to your greater China brand protection strategy.
10. Reciprocal enforcement of IP judgments between Hong Kong and Mainland China
With the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of Mainland China and Hong Kong coming into effect in January 2024, the long-awaited new statutory regime on reciprocal enforcement of judgments between Hong Kong and Mainland China has finally been implemented. The old regime only applied to commercial contracts. The new regime covers a wide range of civil and commercial matters, including intellectual property disputes, such as trademark infringement and acts of passing off under the Hong Kong common law and unfair competition under the PRC Anti-Unfair Competition Law. Enforcement of judgments will be by way of a registration process. The regime will have significant impact on future cross-border enforcement strategies, notably the possibility of leveraging different features of the court systems in Hong Kong and Mainland China and enforcing monetary awards in the jurisdiction where infringers have assets.
About Us
Vivien Chan & Co. is a full-service law practice with offices in Hong Kong (1985) and Beijing (1993). We are consistently recognized as a premier law firm for and in Greater China. With over 35 years of doing business in Greater China, our Hong Kong and China teams have an in-depth understanding and knowledge of the legal culture and market dynamics.
Our long established licensed law offices in Greater China have allowed us to develop deep local roots and an integrated global perspective necessary to help domestic businesses and multinational companies alike seamlessly manage even the most complex local and cross border transactions.
We have advised on some of the most significant acquisitions, arbitrations, real estate projects and intellectual property enforcement to date. This is particularly evident from our leading position in areas such as intellectual property, tax, employment, mergers & acquisitions and dispute resolution. Our ability to collaborate across practices and borders with ease allows us to bring the right team to every transaction, regardless of location.
