Europeans first experiencing the US trade mark system – and vice-versa – are faced with some striking differences between trade mark practice on either side of the pond. It is no different with China, which can seem like a bewildering country in which to register trade marks.
It is therefore with a degree of optimism that the Chinese IP Office recently released a draft of their proposed amendments to Chinese trade mark law.
The devil is very much in the detail, of course, but the proposed amendments are broadly positive and we’ll take a look at some of these below.
A key change will be the provision of suspension. Currently, if you file an application and it receives a citation of an earlier registration, you might do a bit of digging and determine that this is not in use. You therefore file a non-use cancellation action to try and remove this barrier. However, suspension of applications is not currently provided for and the reexamination of your application is then typically performed more quickly than a decision is arrived at in the non-use cancellation action. It’s enormously frustrating.
What it also perpetuates is the need to re-file applications because you fear reexamination of your application being concluded before the non-use cancellation action. The alternative is that a savvy businesses faced with a non-use cancellation action simply re-files their mark again so they are still in front of the queue if you do not re-file.
Suspension will therefore be greatly welcomed. A word of caution that the Chinese IP Office does not like the idea of a pending applications backlog that suspension could create, however. It feels like the conditions for suspension have to be watertight in the law change.
No duplicate filings
The draft amendments contain various provisions forbidding duplicate filings. The principle behind this is that this unfairly resets non-use vulnerability clocks. The non-use period in China is shorter than the UK and EU’s five years with just three years during which you need to commence use before a registration is vulnerable so there is some concern here. Culturally very different, it may not always be the easiest market to penetrate. Nevertheless, there appear to be provisions that allow for earlier duplicate registrations to be voluntarily withdrawn, which gives some scope for re-filings.
Bad faith and intentions to use
There are stronger penalties against bad faith filings proposed, which will be welcomed by brand owners, along with provisions to acquire the ownership of these during proceedings. There is potentially some unintended conflict with the no duplicate filings provision that will need to be ironed out. Stricter regulation of trade mark agents, who can facilitate bad faith behaviour, will also be welcomed.
There’s also provision that applications must be based on use or on an intention to use. There is also a reference to “malicious registrations” which refers to the “mass registration” of trade marks. This needs clarification – will it be a blanket figure without any regard to the size of an applicant?
Owners of unregistered well-known trade marks will have extended rights stretching across to dissimilar goods and services (it currently only covers identical and similar goods and services). However, this comes with a higher bar for proving this status.
More types of non-traditional marks (e.g. colour marks, position marks) will be accepted and the shortening of the opposition period from three months to two months isn’t too controversial. Local applicants seldom engage in any negotiations during an opposition. It is disappointing that no proposals relating to a broader registering of “retail services” are there.
Declaration of Use
Another interesting, if possibly unwelcome, proposal is an introduction of a US-style Declaration of Use due by the sixth anniversary of registration. While it is understood the Office wants to strip the Register of unused marks, I’m unconvinced this is the way forward. For one thing, given the vast size of the Chinese Register, this would involve a considerable increase to the Office’s workload. We already see non-use cancellation actions defended with a modicum of poorly reviewed evidence of use and Chinese businesses have, not tarring all of them with the same brush, a track record of doctored use evidence filed in US cases.
I’m not against the introduction of a mid-term maintenance event, but I would prefer it to be a mere fee payment event. It would fit the resources of the Office better and avoid the need to collate together cumbersome evidence of use, but the inclusion of such an event would see marks dropping off the Register. I feel the Office should also consider fee revisions. We tend to want to avoid fee increases, but my view is this would actually be beneficial to genuine brand owners.
Overall, the proposed changes should be broadly encouraged and the Office should be applauded for wanting to make its system better. The finer details need to be considered – including any transitional arrangements – and we will look to input on these changes constructively.
Many of us at Stobbs are involved with user associations. It’s our way of giving back to our profession, helping support the next generation of IP professionals. It also enables us to be strongly involved in shaping law, practice and policy on a global basis, sticking up for brand owners and using our experience to better IP systems.
These amendments are not expected to be made any time soon (three-five years), which demonstrates that this work can be a slow burner. We remain constantly working in the background, manoeuvring through the politics, providing sensible feedback and alternative ideas and fighting brand owners’ corners.