HongFangLaw ~ Chinese IP Law Updates ~ n’ 69
26 October 2018

Co-existence agreement helps secure thwarted trademark applications

Co-authors:?Walker Xu, Shirley Lin

According to statistics published by the China Trademark Office (CTMO) of the State Administration for Industry and Commerce on its website [1], the total number of trademark applications in China has amounted to 22.931 million up to 2017, among which 15.145 million were granted registration. Validly registered trademarks account for 12.937 million. It goes without doubt that the colossal base of trademark applications and registrations is expected to increase refusals of new filings [2].

In light of a rejected trademark application, a well-planned plan should be developed first before an applicant apply for a review of the unfavorable decision with the Trademark Review and Adjudication Board (TRAB).

In countering the CTMO’s dismissal of the applied trademark for similarity ruled out by Article 30 of the Trademark Law, besides establishing the opposite argument, the most favored strategy is to get prior trademarks out of the way. Therefore, cancellation and/or invalidation proceedings are often initiated against cited trademarks when the refusal is sent on appeal. Negotiation for a buy-out is also an option [3]. Certainly, it is also possible for the applicant to hit the jackpot, finding that the blocking trademark is no longer an issue, as a result of the no renewal to its lapsing validity period. [4]

Another approach that can be tried in addition to the above, or amid insurmountable difficulties in carrying the actions through, is seeking a co-existence agreement. It may be a silver bullet and thus a highly recommended solution for troubled trademark applicants going forward.

Although no provisions have been made on co-existence agreements in the Trademark Law, it is known that the Beijing Higher People’s Court and the Beijing Intellectual Property Court are quite open and positive to the practice as has recently been revealed.

Multiples cases, that have lately been publicized, see the Beijing Higher People’ Courtrepeal several judgments rendered by the Beijing Intellectual Property Court and decisions by the TRAB who ruled against trademark applicants. The higher court’s opposite ruling is due to co-existence agreements reached between trademark applicants and owners at odds [5].

In the course of this new developments, the Beijing Higher People’ Court affirmed the TRAB and the first-instance court’s determination that the disputed trademarks had touched-upon Article 30 of the Trademark Law for being similar to their corresponding item trademarks. However, co-existence agreements had come in being, between the parties of conflicting interests in second-instance proceedings, so prior judgments and decisions against the trademark applicants were eventually overturned based on the change of situations.

The precedents show that trademark co-existence agreements may come to play a decisive role in getting certain blocked applications through to preliminary approval and publication even if they have been found similar to cited trademarks and thus been rejected pursuant to Article 30 of the Trademark Law. This is a revealing lesson on the importance of such agreements to successful trademark registration.

Notes:

[1] Reference: http://sbj.saic.gov.cn/gzdt/201705/t20170524_265379.html

[2] Trademark refusals discussed in this article are limited to those deemed similar to prior trademarks and thus violating Article30 of the Trademark Law by the CTMO.

[3] Cancellation and invalidation can be launched only when certain conditions are met; buy-out negotiation has varying outcomes and comes with relatively large costs.

[4] For example, it happens when a trademark has the refusal of the registrant to retaliate the case, or at the stage of the lawsuit, it has expired due to time constraints.

[5] For example, judgments No. (2018)JXZ1617 and No. (2018)JXZ1980.

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