On June 13, 2023, the China National Intellectual Property Administration (NIPA) published a notice explaining its new internal working guideline, which specifies situations where the NIPA examiners should or may temporarily suspend the examination of trademark rejection review cases and other proceedings (Guideline). For example, when an application is rejected due to a similar existing trademark, one common strategy is to initiate an action to cancel the registration of the existing trademark. The suspension mechanism in the Guideline facilitates this by halting the rejection review until the related cancellation action is completed. Previously, suspension was rare, and there was no detailed guidance on the circumstances in which suspension should take place. The Guideline therefore clarifies important issues and can assist trademark applicants in such review proceedings. 

Strategies to address the rejection of a trademark application under the existing Trademark Law and before the issuance of the Guideline

Before diving into the details of the new Guideline, it is helpful to consider first the existing trademark prosecution strategies and practices which led to the issuance of the Guideline.

Under Article 30 of the Trademark Law, a trademark registration application may be rejected on the basis that the proposed mark is identical with or similar to earlier marks in respect of the same or similar goods or services (commonly known as cited marks).

The applicant may apply for a review of the rejection decision to the NIPA after receiving the notice of rejection. Different strategies may be adopted by an applicant to overcome the issue of cited marks in such rejection review proceedings: 

1. Filing non-use cancellation or invalidation actions against the cited marks in parallel with a rejection review application and seeking suspension of rejection review

If a cited mark has not been used by its registrant on the designated goods or services for over three years, the applicant of the proposed mark may file a non-use cancellation action against such mark. Alternatively, where, for example, the registration of the cited mark was acquired by deceptive or other improper means, the applicant may also apply to invalidate the cited marks. These actions, if successful, will remove the obstacle to the applicant’s registration for the proposed mark.

However, an issue with this strategy is that these parallel applications may not always conclude before the examination of the rejection review. As pointed out by the NIPA, an invalidation action usually takes one to six months longer than a rejection review case. Even though a non-use cancellation action takes a similar timeframe as a rejection review case, there is still a risk that the conclusion of the rejection review will predate the cancellation action. In such a case, the rejection review decision will likely be unfavourable to the applicant (unless the applicant wins on trademark dissimilarity arguments) since the cited marks have not yet been successfully cancelled when the decision is made. This situation is not ideal and has not been properly addressed before. In particular, before the publication of the Guideline, the NIPA was observed to be reluctant in suspending the examination of rejection review cases. This led applicants to consider the second and third strategies as outlined below. 

2. Filing an appeal to the court after receiving an unfavourable rejection review decision from the NIPA

In principle, if the rejection review was not suspended and an unfavourable NIPA decision in the rejection review unfortunately predated a successful non-use cancellation or invalidation action determination, the applicant may still further appeal the NIPA’s unfavourable decision to the Beijing Intellectual Property Court. The court will take into account changes in the status of the cited marks subsequent to the issuance of the NIPA’s rejection review decision. However, filing an appeal to court tends to be more costly, which leads applicants to consider the third strategy.

3. Refiling the same proposed mark and abandoning the initial filing to buy time

Filing a new trademark application is much cheaper than appealing to the court. As such, some applicants may choose to file a new application for the same proposed mark and abandon the original filing. If the parallel actions are successfully completed before the new filing is examined, and the cited marks have been removed at that time, then the new application may obtain preliminary approval without the need to file a review with the NIPA and/or a court appeal.

Draft amendment to the Trademark Law

While the strategies outlined above may have shortcomings, they represent viable courses under the existing Trademark Law. However, this situation may change – on January 13, 2023, the NIPA released the Draft Amendment to the Trademark Law for public consultation (Proposed Amendment). The Proposed Amendment suggested various changes that may prevent the use of some of these strategies. In particular:

• Strategy 2 (filing court appeal) will not be available, as the Proposed Amendment suggests that the court should consider the appeal based on the status of the cited marks and facts at the time when the NIPA issued the review decision. In other words, if the NIPA issued an unfavourable review decision due to the existence of the cited marks, the subsequent successful cancellation or invalidation of the cited marks would not be considered by the court. Trademark applicants will no longer be able to buy time by filing a court appeal.
• It is likely that Strategy 3 (refiling the same mark) will also no longer be available as the Proposed Amendment suggests prohibiting repeated filings for identical trademarks on identical goods or services.

If the Proposed Amendment is enacted as proposed, this could leave the applicant with only Strategy 1 (seeking suspension of rejection review), which was previously difficult as the NIPA has generally been reluctant to grant suspension but is now made possible with the Guideline in place. 

Details of the Guideline

Situations for suspension 

The Guideline provides for seven situations where suspension should be granted and three situations where it may be granted. The seven “should” situations are further divided into sub-groups, which apply to different types of proceedings.

Details of the ten situations and their respective applicability are set out in the table below: 

Impact of the Guideline

Situation 7 in the Guideline, as outlined above, assists with the implementation of Strategy 1 when filing a rejection review. It provides that a rejection review should be suspended if the status of the cited mark depends on the outcome of another case pending at the court or the NIPA. Such other cases are understood to include the parallel non-use cancellation or invalidation actions, as mentioned above, regardless of when the cancellation or invalidation actions were filed. To rely on Situation 7, the applicant will need to make a written request in the rejection review case and state the relevant facts.

The Guideline also provides certainty on the handling of rejection review cases in other situations, such as where the cited marks have expired for less than one year (Situation 4).

Finally, a number of the situations set out in the Guideline also have an impact on the review of successful opposition cases and invalidation actions, as noted in the table above.

Implementation of the Guideline

Principle of necessity: Though Situations 1 to 7 are described as situations where suspension should be made, the implementation of the Guideline is subject to the overall principle of necessity, such that suspension should only be made when the determination of the status of the cited mark in question has a material impact on the outcome of the case. If other grounds for rejection or the determined status of other cited marks are sufficient to conclude the case, the relevant proceedings will not be suspended.

Binding force of the Guideline: While the Guideline does not have the force of law, according to the NIPA, it is an internal working guideline to be followed by examiners in relevant proceedings that must be “strictly implemented.”

Conclusion

The Guideline provides long-awaited clarity regarding the suspension of trademark rejection review proceedings, bringing positive news to trademark applicants. By enabling coordinated timing between related proceedings, it eliminates the need for trademark applicants to resort to court appeals or repeated applications. This not only saves costs for applicants but also alleviates the workload and burden on the administrative and judicial systems. Overall, the Guideline represents a significant step forward in enhancing certainty and efficiency within China’s trademark prosecution regime.