China Trademark Prosecution: Game Changer – Suspension Now Allowed!

Before June 13, 2023, getting a trademark review suspended in China was pretty much a mission impossible. The process of China’s Trademark Office (“CNIPA”) reviewing trademark applications and all the legal hoops to jump through could take ages – we’re talking 6 to 12 months, sometimes even longer, just for the review, and that’s if everything goes smoothly with no hiccups or objections.

Now, imagine waiting around for a year in a fast-paced world where trademarks are like hotcakes, and the earlier you get in, the better your chances. It’s like trying to catch a speeding train. And to make matters worse, China had a staggering number of pending trademark applications, more than anywhere else in the world – over 10 million just last year! It was a real headache, forcing brands to submit their applications over and over again just to deal with citation removal delays. This makes outside counsel’s job particularly challenging when we have to keep recommending clients to refile just to keep their seniority.

The good news is that CNIPA introduced the New Rules of Suspension of Examination during Trademark Review Procedures on June 13, 2023. These rules acknowledge (finally!) the need to address the high volume of filings and the associated costs and delays in trademark registration. Under these new rules, CNIPA now will allow suspension when it is deemed necessary and when it could significantly affect the examination outcome. Here are the scenarios where suspension will be considered.

Examination shall be suspended when:

1. The disputed or cited mark is in the examination of either modification of owner’s name, or assignment, and no conflicts exist between the two after modification/assignment.

2. The cited mark has been expired and is in the process of renewal, or falls in the renewal grace period

3. The cited mark is in the examination or withdrawal or removal procedure

4. The cited mark has been cancelled / invalidated / expired due to non-renewal, but less than one year from when the dispute is examined (not including circumstances where the refusal reason does not involve Article 50 or the cited mark is canceled due to nonuse)

5. The case involving the cited mark has been concluded and is waiting for the decision to take effect, or the execution of the effective court judgment to be re-examined.

*Note above scenarios 1 – 5 are generally applied to review on refusal, review on opposition, and invalidation procedures.

6. The prior rights involved depend on the conclusion of another case pending in trial by the People’s Court, or examination or administration (in conformity with the Article 35.4 and Article 45.3 of the Trademark Law of P.R.C.).

*Note above scenario 6 is specifically applied to the procedures of review on opposition and invalidation.

7. The legal status of the involved cited mark shall depend on the conclusion of another case which is pending in trial by the People’s Court or examination of administration, and the applicant has explicitly requested for suspension;

Examination may be suspended when:

8. Where the cited mark in a review on refusal has been challenged through an invalidation action, and the owner of the cited mark has been determined a bad faith applicant in other concluded cases where Articles 4, 19.4 or 44.1 are established, the review on refusal may be suspended at the examiner’s discretion (not necessarily requested by the applicant).

9. Where a case shall refer to, or wait for the conclusion/decision of another case with similar/relevant circumstances, the case may be suspended according to the specific circumstances; such circumstances may or may not involve a cited mark, thus may be suspended at the examiner’s discretion (not necessarily requested by the applicant);

10. Other circumstances where suspension can be applied for, based on the aforesaid principle of “necessity” and “benefit the legal right holders”;

CNIPA has also noted procedural issues in the interpretation:

Examiners shall apply for suspension of a specific case during the required time limit, while applicants of a review on refusal shall request suspension within the three-month supplementary period after the review is filed at the latest, elaborating the details of the action(s) taken against the cited mark(s) in written statement.

The applicant of a review on refusal as stated in the above scenario 7 can request for suspension explicitly along with filing a review, elaborating the details of the cited marks, the actions related thereto and the relation with the case. In principle, whoever applies for suspension of the examination shall apply for lifting the suspension. After determining the status of the cited trademark rights, the applicant shall submit corresponding evidence materials. If the examiner receives supplementary evidence from the applicant and confirms that the suspension circumstance has been eliminated, the examination shall be resumed.

As we eagerly await further clarity on these rules, it’s increasingly apparent that a long-anticipated transformation in China’s trademark registration landscape is on the horizon. While some finer points remain in question, these changes promise to significantly streamline the registration process and alleviate the time and financial investments historically required by brands in China.

What’s especially heartening is that these rules aren’t mere empty promises. In recent weeks, we’ve witnessed multiple instances where suspensions were granted, marking a notable departure from past decades when such flexibility was rarely seen, regardless of the validity of suspension requests. It’s truly exciting to witness CNIPA’s newfound flexibility and commitment to addressing the frustrating issues that have marred trademark registration in China. It’s a promising step in the right direction, and one can only hope that CNIPA might also tackle the next frustration: bad faith registrations. Here’s to optimism!