Condition Applicable to Suspended Hearing of Trademark Administrative Cases

By Li Bing, UNITALEN Attorneys at Law,[Trademark]

 
As we all know, China is a veritable trademark country, and the number of trademark applications has ranked first in the world for many years. Consistent with the continuous increase in the number of trademark applications, the number of trademark authorization and confirmation cases such as refusal review, revocation, opposition and invalidation has also hit new highs. This is the inevitable result of the rapid development of China's economy and the increasing awareness of market entities' trademark awareness. It is also inseparable from the reality of the large stock of trademarks and more malicious registrations. In recent years, the Chinese government has attached great importance to the problems of malicious and infringement in the trademark field, and has also contributed to the increasing number of trademark authorization and confirmation, administrative investigations, and civil litigation cases.
 
With the continuous increase in the number of various trademark cases, the problem of trademark rights conflicts is inevitable, leading to an increasing number of requests or hopes for the suspension or postponement of trials by administrative or judicial authorities in various cases. There are many procedures involved in trademark cases, and many issues, such as which procedures can be suspended, the reasons for the request, and the circumstances under which the request may be accepted by the authorities, often trouble the parties in the case. This article will start from different trademark case procedures, combined with legal provisions, administrative policies and trademark practices, and give a general introduction to the application of the suspension of trial of trademark administrative cases.
 
Non-registration review procedure
 
It is stipulated in Article 35, paragraph 4 of the "Trademark Law" that: "Where, in a review conducted according to the preceding paragraph, the Trademark Appeal Board must determine the involved prior rights based on the results of another case being tried by a people’s court or handled by an administrative agency, it may suspend the review. After the cause of suspension is eliminated, the review process shall be resumed." The “in a review conducted according to the preceding paragraph” in this paragraph refers to the non-registration review procedure, that is, the Trademark Office makes a decision not to register in the objection procedure, if the person challenged is dissatisfied with the decision, he can apply to the original Trademark Appeal Board of the China National Intellectual Property Administration (referred to as the "Trade Review and Adjudication Board") for review.
 
The above clauses stipulate that the registration review is not allowed to be suspended. To put it simply, in the opposition procedure, one of the opponents often cite the trademarks or appearance patent rights and copyrights that they have applied for or registered as prior rights. If at the stage of nonregistration review, the prior right is in other administrative or judicial procedures, resulting in an unstable state of the right (controversy or change in ownership, etc.), then the person challenged can suspend the trial of non-registration review case according to the request.
 
Among them, there are several points to be noted:
 
First of all, the law stipulates the non-registration review procedure, and the preceding opposition procedure does not have a statutory suspension of review. However, this does not mean that if the prior right status is not stable in the objection procedure, the trial will not be suspended, but will be considered by the Trademark Office according to the specific situation. If the person challenged has a reasonable request for suspending of hearing, he can still actively raise it.
 
Second, the law clarifies that the prerequisite for suspension of review is that the determination of the prior rights involved must be based on the outcome of another case. In other words, the prior right must affect the trial of the case and be in an unstable state. In other words, if the non-registration review case can be directly decided on absolute grounds, or the prior rights are in other procedures but the result does not affect the trial of the case, or the trial is based solely on other prior rights in a stable state, and the result of the decision is affected, then the Trademark Appeal Board can also make the decision directly without having to suspend the review.
 
Third, the law stipulates that "the review can be suspended", indicating that the Trademark Appeal Board has the power to decide whether to suspend the review. This provision is obviously appropriate because it can effectively prevent the misuse of the request for suspension by the opponent from causing abnormal delays in the trial of the case. From a practical point of view, the Trademark Appeal Board will generally consider whether there are disputes and uncertainties in the determination and attribution of the prior rights, the progress of the cases involved in the prior rights, and whether the prior rights affect the outcome of the case, etc., and then decide whether to suspend the review.
 
Invalidation procedure
 
It is stipulated in Article 45, paragraph 3 of the "Trademark Law" that: "Where, in reviewing a petition for declaration of invalidation of a registered trademark under the preceding paragraph, the Trademark Appeal Board must determine the involved prior rights based on the results of another case being tried by a people’s court or handled by an administrative agency, it may suspend the review process. After the cause of suspension is eliminated, the review process shall be resumed."
 
The suspension of invalidation is basically the same as the reexamination procedure for nonregistration, so it won’t be repeated here.
 
Rejection review procedures
 
Due to the huge stock of trademarks in China, it is more common for trademark registration applications to encounter rejections, and accordingly, a large number of rejection cases have been brought. In the case of refusal review involving relative reasons, in many cases the dispute of trademark similarity and product similarity is not a lot, so it relies on the revocation, opposition and invalidation of the cited trademark, or the cited trademark is in the process of change, transfer, renewal, etc. It is common for China to overcome prior rights. Therefore, requesting the suspension of the trial in the review of refusal is the most frequently discussed application and discussion on the topic of suspension in practice, and it is also more concerned by trademark applicants.
 
Different from the nonregistration review and invalidation procedures, whether the review procedure can be suspended is not clearly stipulated in the Trademark Law. However, it is stipulated in Article 11 (5) of the "Regulations for the Implementation of the Trademark Law" that: "The following periods of time shall not be counted in the time limit for the examination or the trial of trademark matters: ... (5) The time of waiting for the results of another case involving prior rights upon request of the applicant in the process of examination or trial." At the same time, it is also stipulated in Article 31 of the Trademark Review and Adjudication Rules that “in accordance with Article 35, Paragraph 4, Article 45, Paragraph 3 and Implementation Regulations 10 According to Article (5), if it is necessary to wait for the outcome of the trial of a prior rights case, the Trademark Appeal Board may decide to suspend the trial of the trademark review and adjudication case.” The above provisions may be regarded as providing a legal basis for the rejection of the review, suspending a hearing, and request for suspension.
 
Then, the issue of whether the Trademark Appeal Board will consider suspending the review in the review process for refusal as long as the applicant requests to suspend based on unstable prior rights has plagued trademark applicants and agents in longterm practice, and there is a lack of relatively clear solutions. However, after years of review and exploration, the Trademark Appeal Board gave an answer to this question. In the 72nd issue of its legal newsletter (June 2018 edition), the Trademark Appeal Board’s Legal Affairs Office has pointed out: "Trademark refusal review cases will not be suspended in principle except for the following circumstances: (1) In applying for a trademark application before registration, the cited trademark has been in non-use cancellation procedures or invalidation procedures for three consecutive years; (2) the cited trademark is in opposition procedures; (3) the cited trademark is in the procedures for modification, renewal, or assignment."
 
The Trademark Appeal Board also gave corresponding explanations for the above practices in the article: "The Trademark Law has set requirements for the trial period of review cases, but in recent years, the number of trademark review cases has been increasing year after year. The efficiency of the case trial is under great pressure. If the status of the trademark rights cited in the review cases is finally determined, it will bring great difficulties to the management of the review.” That is to say, the Trademark Appeal Board made a relatively appropriate choice between efficiency and fairness combined with the actual situation. It not only met the normal and reasonable expectation of suspension of trademark applicants to a certain extent, but also prevented the general inefficiency of authorization caused by the extensive suspension of examination. In addition, the establishment of suspension conditions also urges trademark applicants to do well in search of prior rights before application, to avoid the proliferation of cancellation procedures and the shortage of review resources.
 
The Trademark Appeal Board also referred to judicial practice when setting the abovementioned suspension conditions. In administrative litigation cases of refusal and reply, the court usually judges that the trademark authorization case is mainly for the review of the legality of the sued decision. The applicant requests the court to suspend the trial based on the cited trademark being in the process of revocation, instead of rejecting the natural reason for the suspension of the review of administrative litigation cases. Therefore, in practice, the efficiency of the court's trial is also the priority, and in most cases, the trial is not suspended. If the final status of the cited trademark can be determined in the course of the court hearing the case, the court will make a decision based on the principle of change of circumstances.
 
However, in response to the above-mentioned changes in review practices, the applicant has also took a combination of measures, that is, he submits a supplementary registration application while filing a review of refusal and taking measures against the cited trademark, and then continues to submit the first instance, second instance or even retrial for the review of refusal. The litigation procedure is to wait for the final determination of the status of the cited trademark, and at the same time to gain time for the review of the supplementary registration application. Therefore, in order to alleviate the predicament of the shortage of review resources and the intertwined submission of cracking procedures, it is still necessary to effectively curb and clean up malicious registrations, and at the same time make more institutional arrangements for the use of trademarks, just like when the Trademark Law was revised again in 2019,the same attempts were made, so as to give more resources and opportunities to commercial entities seeking to protect legitimate trademark rights.
 
Substantive examination procedures for trademark registration applications
 
Judging from current practice, in the substantive examination of a registration application, the Trademark Office will include an examination opinion to ask the applicant to decide whether to request a suspension of hearing. The main content of this type of examination opinion is that the Trademark Office intends to reject the application for trademark registration based on a certain prior right, but because the prior right is in a certain procedure. Therefore, the applicant should decide whether to request a suspend of review. If he/she wishes to request, a written request shall be submitted.
 
Regarding the application of the examination opinions of trademark registration applications, the Trademark Office and the Trademark Appeal Board jointly revised and issued "Trademark Examination and Trial Standards" in 2016. There are specific provisions. First of all, its legal basis is Article 29 of the "Trademark Law": "Where, in the course of examination, the Trademark Office deems it necessary to require an explanation or amendment of a trademark registration application, it may require the applicant to provide an explanation or amendment. The applicant’s failure to provide such an explanation or amendment shall not affect the decision of the Trademark Office upon examination.” The establishment of the examination opinion is mainly for situations where the Trademark Office believes that the trademark registration application violates the relevant provisions of the Trademark Law but has the possibility of complying with the exception provisions. It is mostly used in some registrable exceptions in Articles 10 and 11 of the "Trademark Law".
 
However, in the abovementioned examination standards, at the same time, it is clearly stated that the examination opinions can also be applied to “other situations where it is really necessary to use them”. In the substantive examination of the trademark registration application, the applicant is asked to decide whether to request a suspension of trial. This should be a situation in which the Trademark Office considers it necessary to apply the examination opinion in practice. And objectively speaking, putting the suspension of this link to the substantive examination stage of the registration application has also largely avoided the occurrence of subsequent procedures and promoted the substantive settlement of disputes. This approach does have the effect of saving administrative review resources and the cost of applicants' entitlement.
 
In addition, the trademark registration application review opinion states the legal basis for the applicant’s request for a suspension, that is, Item (5) of Article 11 of the "Regulations for the Implementation of the Trademark Law" introduced in the previous section, which is also related to the request for the suspension of the review procedure. The basis is the same. This also further illustrates that the suspension of advancement is to resolve the issue of authorization at the registration application stage to avoid wasting review resources. From a practical point of view, the Trademark Office considers the reasons for the suspension in the examination opinion, which is basically the same as the above-mentioned situation that the Trademark Appeal Board has suspended the refusal review procedure. The difference is that the situation where the cited trademark has already been suspended in the application procedure or is in the review process for rejection is added. This situation is consistent with the internal consideration logic of other situations that are suspended, so it is not difficult to understand, and the Trademark Appeal Board will often consider suspension of this situation during the review process of the refusal review.
 
Conclusion
 
This article mainly introduces and discusses the relatively clear types of cases that can be deferred in trademark administrative cases and the circumstances under which the deferment applies. In the abovementioned procedures and other procedures, there are other reasons for suspension, such as requesting to suspend the trial of the case of refusal response based on the consent letter, and to suspend the trial of the opposition case based on the request of trademark transfer. These suspension requests are also quite common in practice, and many have been approved by the Trademark Office and the Trademark Appeal Board. However, because there is no clear legal basis, administrative policy or practical support, this article does not explain them. In addition, there is also room for the application of suspension requests in trademark infringement administrative investigations and civil litigation cases. Appropriate understanding and application of the suspension rules can help applicants maintain their trademark rights more efficiently and economically.

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