Conscious uncomplicating? Is the end to ‘backup’ trade mark filings in China in sight?

Under the current practice of the China National Intellectual Property Administration (CNIPA), the suspension of a trade mark application is at the discretion of the examiner and is very rarely granted. This can result in clients having numerous ‘backup’ applications for the same mark pending in China at the same time; this is not only costly, but also results in the Chinese trade mark register becoming ever more cluttered.

This CNIPA practice has been a source of frustration for brand owners for many years. Many trade mark owners can be put off pursuing trade mark protection in China as the process of challenging third-party marks alongside the need to keep refiling ‘backup’ applications or through appeals becomes financially unviable.

However, the CNIPA has finally taken note of these frustrations and is seeking to change its practice regarding the ability to suspend new trade mark applications.

In June 2023, the CNIPA published a guidance note setting out the circumstances under which a suspension of the later filed application would be warranted. The new rules apply to trade mark refusal reviews, opposition reviews and invalidation actions.

There are seven circumstances where a suspension should be granted, namely:

  1.  If the cited mark is in the process of a change of name or assignment recordal, which when approved would resolve the conflict as the earlier mark and later mark would be in the same owner name;
  2. The cited mark has expired and is pending renewal or is within the six-month grace period;
  3. The cited mark is in the process of being surrendered or withdrawn;
  4. The cited mark has been cited merely because it was cancelled (for reasons other than non-use), or invalidated, or has expired for less than one year;
  5. The action against the cited mark has been concluded but the decision has not yet been implemented;
  6. The status of the cited mark must be based on the outcome of another action that is being heard by a Chinese court or processed by an administrative authority i.e. an opposition, invalidation action or non-use action;
  7. The cited mark is itself subject to a refusal review which is waiting to be heard by a Chinese court or processed by an administrative authority. To rely on this ground, trade mark owners must submit a suspension request.

The guidance notes also set out three circumstances where a suspension may be granted, namely:

  1. The cited mark is subject to an invalidation on the grounds of bad faith and the bad faith of the cited owner has been confirmed in other earlier actions. In this scenario the trade mark examiner can themselves suspend refusal review procedures even if no such request has been made by the later trade mark applicant;
  2. The examiner may also suspend the later application on their own volition if they deem it necessary to await decisions or judgements on earlier actions involving identical or related facts such as where the cited mark is subject to a refusal review, opposition review or invalidation action;
  3. For circumstance other than the above, examiners may suspend based on the principle of necessity and the benefit of legitimate trade mark owners.

It is not mandatory (except in circumstance seven) to submit a suspension request to benefit from these new rules. Nevertheless, it is still strongly advisable to submit such requests to the CNIPA to ensure that the examiner is aware of the need to suspend.

The guidance notes also specify that the timing of actions against the cited marks will have no bearing on whether or not a suspension is granted – that is to say it does not matter if the action against the cited mark was lodged after the filing date of the later application.

To further assist in combatting bad faith filings, the CNIPA has also drafted proposals to amend the trade mark law which state that a trade mark applicant may only own one registration for the same mark on identical goods or services. Specifically the draft states that a trade mark application must not be identical to a prior pending or registered trade mark filed by the same applicant for the same goods or services, or a prior trade mark that has been revoked, cancelled or declared invalid within one year before the application date. These changes regarding suspension are timely in light of this proposed prohibition on repeat filings.

In addition, the draft also makes provision requiring registrants to file statements of use (or provide genuine reasons for non-use) every five years after registration. Again this will help remove those ‘bad faith’ registrations which are not being used and help declutter the register.

We are continuing to monitor for further updates regarding these latter two proposed amendments. However, in the meantime, the new guidance notes on suspension of trade mark applications is clearly great news for trade mark owners and will hopefully be a turning point to quashing the number of bad faith applications being filed by squatters in China. It will also over time have the effect of decluttering, meaning that only legitimate trade mark filings, and marks which are still being put to genuine use, remain on the register. This should make the registration process much smoother, quicker and cost effective for trade mark owners seeking protection in China.

If you require further information or need assistance protecting your Intellectual Property in China, please contact the author or visit our webpage which is dedicated to helping with Chinese IP matters.