IN RE TRADEMARK “HUAYUAN PHARMACEUTICALS”

China IP,[Trademark]

CASE 14 :
IN RE TRADEMARK “HUAYUAN PHARMACEUTICALS”
◆ First instance: (2015) JingZhiXingChu No. 177
◆ Second instance: (2016) JingXingZhong No. 2345
Beijing Municipal
[Headnotes]
When challenging the legality of a regulatory document issued by State Council ministries, local people’s governments or their agencies in reliance of which an administrative act is taken, an individual, a corporation or other organizations may join the review of the regulatory document together with review of the administrative proceedings.
 
[Synopsis]
Plaintiff: Anhui HuaYuan Pharmaceuticals Co., Ltd. (HuaYuan)
Defendant: State Administration for Industry & Commerce/Trademark Office (The Trademark Office)
Third Party: YiXinTang Pharmacy Franchise Co., Ltd; Shanghai JianYi Net Pharmacy Franchise Co., Ltd.
 
The mark at issue is No. 11988470 for “HuaYuan Pharmaceuticals and Design” which application was filed by HuaYuan on January 4, 2013 for medicine retail services in class 35. The dispute arises over the mark at issue when the Trademark Office issued a Notice for Negotiation on Simultaneous Applications (referred to as the “Notice”) based on item 4 of the Notification on Newly Added Service Marks about transitional period. HuaYuan, dissatisfied, requested judicial review of the administrative decision to cancel the Notice, and requested judicial review of the legality of Article 4 of the Notification. The court of first instance found the Article 4 provision about transitional period is illegal, vacating the Notice and remanding the case to the Trademark Office for further examination. The Trademark Review & Adjudication Board (TRAB) was dissatisfied, and appealed.
 
At second instance, the court found that the Notice, by treating HuaYuan’s mark at issue as “simultaneous application” with cited marks 1 and 2, has denied HuaYuan’s legitimate rights under Article 31(1) of the Trademark Law, causing substantial detriment to its trademark application, and is therefore reviewable due to ripeness of the administrative act. Item 4 of the Notification treats the dates between January 1 through January 31 of 2013 as “simultaneous,” which is inconsistent with the provisions of Article 30 of the Trademark Law, in violation of Article 31. Considering the violation of Article 30 of the Trademark Law, item 4 of the Notification is unwarranted at law, and the Notice is illegal administrative act. Yet, cancellation would produce major detrimental impact on public interest, and is therefore improper. Based on this, the court of second instance decreed to vacate the first instance decision with affirmance of illegality of the Notice.
 
[Judge's Comment]
Article 53(1) of the Administrative Procedure Law, as amended 2014, adds regulatory documents as joinder for judicial review cases, which is a major step toward perfection of the administrative procedural system. Based on the above provisions, this is the first case affirming illegality of regulatory documents issued by administrative authorities in the IP area, playing a significant role in promoting rule of law in IP area and standardization for the exercise of administrative powers.
 
At second instance, the court distinguished between prematurity and ripeness of administrative acts according to administrative theories, following strictly the enabling law. On basis of finding the regulatory document illegal, combined with comprehensive analysis of the application of the regulatory document and its impact, the court, by finding the administrative act illegal without cancelling it, guarantees public reliance of most trademark applicants thereby maintaining social stability. The proper application of the relevant provisions of the Administrative Procedure Law in this case provides a strong guidance for future judicial review of regulatory documents as joinders.
 
(Translated by Zheng Xiaojun)
 

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