Institutional Solution to Trademark Examination Backlog

Issue 29 By Zhou Yi,[Trademark]

The day following the Spring Festival was busy as usual, for Liang Yong, a trademark agent. He has come to the realization that the work will never be finished, and working extra hours till 9 or 10 p.m. has become routine. “Look at the Official Gazette (OG),” Liang said to the reporter. “Weekly, it used to be about 2,000 pages thick. By the end of last year, it was 3,000. Now, nearly 5,000 and still counting!”

On March 27, 2008, Deputy Director of the State Administration for Industry and Commerce (SAIC) Fu Shuangjian signed the Commitment on Cutting the Backlog of Cases in Trademark Examination and Adjudication with the Trademark Office and the Review & Adjudication Board, which stipulated that the backlog problem was to be resolved by 2010, and the trademark examination and adjudication were to be set back on track.

One year has passed. In March 2009, the extra pages reflect the achievements of the Trademark Office’s effort in reducing the backlog.

Different speeds for different processes
The first results have been seen in sending out filing receipts.

Prior to 2008, it took 4 to 6 months before applicants saw filing receipts. By the end of 2008, this length of time had been reduced to 1 month, or 1 week through e-filing which became available after January 20, 2009.
“For many businesses, the filing receipt is no less important than the registration certificate. It is the ticket needed for merchandise to find its way into supermarkets. It is of key importance for the garment and food industries.” said Ji Lei, a trademark agent from Globe-Law Lawyers, “The speeding up is more than welcome in the business circles.”

Though the filing process has accelerated, the ever important examination process has shown no sign of improvement. Trademark agent Ms. Sun Zhi from Beijing Unitalen Attorneys at Law said, “It took two years to see the speediest results in classes 29 (foodstuffs), 31 (seeds and animal feed), and 34 (tobacco); relatively speedy results are the publications of computer chips filed two and a half years ago, a half year improvement. As for those applications which had taken the longest, like for clothing, three years’ wait is still the norm. In other words, the OG publishes those marks filed early in 2006.”

Little change has been made in the application process, because they still have to first deal with the trademark applications submitted from 2001 to 2008. In other words, “a great many problems” still need to be solved.

Trademark agent Ms. Qiao Xu from Beijing KingSound & Partners was quoted as saying that, “At present, there are about 2 million trademark applications filed before 2008 that must be handled. However, the Trademark Office currently can only process 700,000 applications annually. That is, it will take approximately 3 years to process all the applications filed before 2008. Since trademark review strictly follows the time sequence, it can be expected that the trademark applications filed between late 2007 and early 2008 will be published in 2010. It means that by the year 2010, the time range from trademark applications to gazette will still be 3 years. Therefore, these 3 years (from 2008 to 2010) will be a ‘detumescence’ period for trademark registration, and the process will not be accelerated with large margin. There might be some changes after 2010.”

Closely related to the application process is the opposition which also has shown little change. It still takes approximately 4 years to receive the final decision after filing the opposition. Qiao Xu hopes that the opposition process will pick up speed. She said, “Opposition means that the mark has been approved for publication. As long as the examination is not flawed, the mark is OK in and of itself. So if opposition is unduly prolonged, it causes great uncertainty as to the trademark owner’s right.”

Even though most procedures in the Trademark Office have not changed much, the application for rejection review has been hastened at the Trademark Review Board.

“One of my clients received an office action in March 2008 for his application in class 33 (liquor), and surprisingly, the determination for review was made around July or August of the same year!” said Sun Zhi.

Sun was surprised by the speed; it used to take 2 to 3 years. Now it can all be managed within one year. “We can now advise our clients that the results can be expected within 4 to 12 months.” Director of the Legal Affair Department for Unitalen, Zhao Lei said.

With the review period reduced from 2 years to 4 months, the cases for rejection review have surged in the short term. According to estimates from Unitalen, the numbers of review cases accounted for 30% of the non-litigation trademark cases for the law firm in 2008, which was a much higher proportion than in 2007. However at the same time, Zhao Lei was very happy, “At present, the Board is reexamining applications submitted at the end of 2008. That is to say, there is no backlog in rejection review cases, which shows a good trend.”

The underlying problem of acceleration 

March 27, 2009, marked the first anniversary of the Trademark Office’s three-year commitment to resolve the backlog. Despite the varying degrees of acceleration in all aspects of trademark applications, a number of underlying problems have gradually emerged.

In order to solve the backlog of trademark applications, the State Administration for Industry and Commerce recruited and trained 400 new staff members for trademark examination and review support during the second and third quarters of last year. On August 31, 2008, 298 began to work at the Trademark Office as trademark examiners, and the remaining entered the Review Board as support staff. After six months, their efforts were already showing results, even though the three months of training was still not enough for the majority of fresh graduates with no practical experience. The new examiners have been challenged by the trademark examination standards.

Qiao Xu started as a trademark agent in 1993, but has felt a little upset in recent months. The trademark applications, which would be approved in accordance with previous practices, have surprisingly been rejected in recent days, which have made her promises to clients appear as if she had been “bragging.” She said: “Though Examination Guidelines exist, trademark examination still relies on the experience of examiners. So, apart from training, the examiner accumulates experience over time. I have worked as an agent for more than a decade, but I am repeatedly encounter with various questions. I think that it will take at least one year for the new examiners to have good examination abilities.”

Along with the examiner’s professional competence, the quality of some new recruits also needs improvement. One agent recalled, “Once, one of my trademarks was rejected because of the fault of an examiner. I phoned him. According to common practice, the examiner would first listen to my story, and then refer me to the division chief, who will then correct the mistake and send me feedback. However, that examiner bluntly told me to go to the division chief, and said that it was not his job. I argued that it was, and that he had rejected the application. He responded by telling me to go to the Trademark Office, and that he was not a Trademark Office man.”

Some of the problems have been caused by the increase of speed. For example, the “crazily” accelerated rejection review leads to the oversimplification of process. The decision pertinent to rejection review used to be supported by a detailed explanation, but now it becomes simple and straightforward: one sentence is given for the approval of trademark right while a simply written summary is used for rejection. Though most applicants have no objection to this change, the applicants whose trademarks are rejected will have complaints, and may question due process.

The high speed has also brought additional problems i.e., difficulty in the internal sum-up and communication. For example, internal discussions were organized to exchange views on every case for rejection review in the past, while at present only difficult cases have such procedures.

Is institutionalization the solution to the backlog problem?
To speed up the trademark application process and solve the backlog, current measures increase manpower and simplify procedures. The target is the trademark applications filed from 2001 to 2008. During the interview, several agents expressed optimism over current trends. They also believe that basically, more institutional guarantees are needed to hasten trademark applications.

“To quicken the trademark application, many people pin their hopes on the amendments to the Trademark Law. If the substantive examination is changed to a relative examination, the workload will be greatly reduced and the time for getting certificates will be shortened,” Ji Lei told the reporter.“But it is also worth exploring whether the practice is in line with China’s national conditions.”

Qiao Xu holds that China has a large volume of trademark applications, and IPR awareness and the trademark system have not yet reached the standards of developed countries. If the substantive examination is cancelled suddenly, the status of trademark right may become confused.

Compared to the change in trademark examination standards, it is more realistic to restrict the Trademark Office and Review Board by institutional instructions. For instance, it is a possible to provide examination limitations for the procedures of trademark applications. “The current law does not specify any particular limitation on the Trademark Office and Review Board. Theoretically, trademark registration should be a mere administrative act, but so far it is not regulated by the Administrative Licensing Law,” Zhao Lei said in his comments.

Furthermore, it would be another approach to simplify the procedures between the Review Board and Trademark Office. Take the opposition as an example. Now the opposition requires the Trademark Office to reexamine a trademark that it has already approved. The procedure usually takes as long as 4 years, and many applicants would have to pay additional costs for bad-faith oppositions. Therefore, it can be an option to simplify the opposition and the review process by merging the two.

“From my point of view, it would also be an important approach to reduce malicious applications and objections from the applicants and liberate the administrative resources of the Review Board and Trademark Office.” Zhao Lei said, “Maybe an opposition penalty mechanism can be set up, so that the losing party of opposition would have bad integrity records, thereby reducing bad-faith opposition.”

(Translated by Li Yu)

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