There have been several recent trademark developments in the People’s Republic of China (PRC) in the last few months. One of the most noteworthy is the issuance by the Judicial Committee of the Supreme People’s Court of new Regulations on Several Issues Concerning the Trial of Administrative Cases Involving the Granting and Confirmation of Trademark Rights (“2017 Regulations”), which were issued on December 12, 2016, and are effective as of March 1, 2017. 

The 2017 Regulations apply to the review of administrative decisions by the Trademark Review and Adjudication Board (TRAB) that are brought before the Beijing IP Court and Beijing Higher People’s Court. Such decisions involve issues including trademark application rejections, reviews of decisions involving successfully opposed marks, non-use cancellations, and the review of invalidation decisions. The 2017 Regulations will be useful to trademark practitioners in China because they seek to clarify a number of issues that have been the subject of inconsistent review by the trademark office (TMO), the TRAB, and the People’s Courts under the PRC Trademark Law. 

Some of the more important clarifications in the 2017 Regulations include the following: 

• An application to register the name of a public figure who is known in the fields of politics, economics, culture, religion, or representing a particular ethnic group can be rejected as a mark that has “other adverse effects” under Article 10(1)(8) of the PRC Trademark Law. Article 10(1)(8) is a “grab bag” provision that prohibits the use of trademarks that harm socialist morality or customs or that have other adverse effects, but the provision has been inconsistently applied to cases involving third-party rights, such as personal name rights. Article 5 of the 2017 Regulations now makes it clear that the name rights of certain kinds of cultural personas can be refused registration under this provision.

• Trademarks that contain the names of certain PRC administrative areas or publicly known foreign place names are registrable if they contain additional elements and are otherwise distinguishable from the place name in question. This exception to general prohibition of the use and registration of domestic administrative and publicly known foreign place names under Article 10(1)(2) of the PRC Trademark Law is found in Article 6 of the 2017 Regulations.

• When reviewing foreign language marks, the doctrine of foreign equivalents will not serve as a bar to registration if relevant consumers are likely to have little or no awareness of the meaning of a foreign term, and the mark can nevertheless serve to distinguish the source of goods (Article 8). 

• Three-dimensional (3D) signs that consist solely of the shape of goods or a part thereof can be registrable upon a showing of acquired distinctiveness. Acquired distinctiveness in this context entails long-term and extensive use indicating that relevant consumers can distinguish the source of goods (Article 9). This provision is certainly not revolutionary, and it may seem obvious to trademark practitioners in other jurisdictions, but should be helpful to applicants of 3D marks in China because it explicitly articulates a review standard that has been inconsistently applied by the TRAB on review of TMO rejections for such marks in the past. 

• Marks that suggest the characteristics of goods or services are registrable if they can serve as a source identifying function to relevant consumers. This principle is articulated in Article 11 of the 2017 Regulations, and is noteworthy because it is an explicit recognition of the difference between merely suggestive and descriptive marks—something that has been seldom appreciated by the TMO in practice. 

• The subjective intent of a trademark applicant is relevant to a finding of “likelihood of confusion” when determining whether a mark should be protected as an unregistered well-known mark in a dispute against a third-party application for an identical or similar mark covering similar goods (Article 12). This is noteworthy because it arguably introduces “bad faith” as a factor to be considered in determining the protection extended to unregistered well-known trademarks. 

• The prohibition of the unauthorized registration of trademarks by agents or representatives also extends to trademark applicants that have a “special personal relationship such as kinship, etc.” with those agents or representatives (Article 15). This provision of the 2017 Regulations addresses a tactic that is often employed by agents or representatives to preemptively register the trademarks of their principals. 

• Article 15(2) of the PRC Trademark Law provides that when a trademark applicant has a contractual or business relationship or “any other relationship” with the prior user of an unregistered trademark, and that applicant files a trademark that is the same or similar to that third party’s prior unregistered trademark for the same or similar goods, then an opposition against such an application should be supported by the TMO. Article 16 of the 2017 Regulations confirms that “other relationships” under Article 15(2) of the PRC Trademark Law may include (i) family relationships with the prior user; (ii) employment relationships; (iii) relationships that entail geographically proximate business addresses; (iv) failed agency or representative relationships; and (v) failed pre-contractual or aborted business relationships. This is a noteworthy and welcome expansion of coverage for a provision that is often the only port of call for PRC and foreign small and medium-sized enterprises (SMEs) that are victims of pirate filings by informal business or social acquaintances.

• The protection of a geographical indication (GI) can extend to goods that are not traditionally associated with the relevant geographical area (or covered by a registration for a collective or certification mark) provided that there is evidence that use of the disputed trademark on such goods will cause consumers to mistakenly believe that the goods originate from that region and thus have the qualities, reputation, or other characteristics associated with that GI (Article 17). 

• The first clause of Article 32 of the PRC Trademark Law provides that applications for the registration of a trademark “may not prejudice the existing right of priority” of another, and copyright is one such priority right. Article 19 of the 2017 Regulations confirms that copies of trademark gazettes, trademark registration certificates, etc., can be used as prima facie evidence that a trademark applicant is an interested party with the right to claim copyright in a trademark representation. While a separate determination will be made as to whether the trademark representation in question is a protectable work under the PRC Copyright Law and relevant regulations, the TMO, TRAB, and People’s Courts have not consistently recognized trademark documents as acceptable evidence for establishing a claim of right, so this is indeed a positive development.

• The right of priority afforded to name rights under the PRC Trademark Law also applies to pseudonyms, stage names, translated names, etc., provided that the subject name can be shown to possess a definite degree of fame, has established a stable corresponding relationship with a specific natural person, and is used by the relevant public to refer to that person (Article 20). Similarly, the right of priority afforded to trade names will also be extended to abbreviations of trade names that have a certain degree of fame and have a stable corresponding connection with a specific enterprise (Article 21). 

• A right of priority will also be recognized for the names of copyright protected works and names of characters within copyright protected works provided that the names have obtained a rather high degree of fame, and use of the names will cause the relevant public to assume a license or other relationship with the rights holder (Article 22).

• The second clause of Article 32 of the PRC Trademark Law provides that “improper means may not be used to preemptively register a third party’s trademark that is already in use and has a certain degree of influence.” Article 23 of the 2017 Regulations confirms that a preemptive registration by improper means will be presumed if the prior use has resulted in a definite degree of influence and the applicant clearly knew or should have known of the trademark. The trademark applicant can rebut this presumption if it can prove that it did not take advantage of the goodwill of the prior trademark in bad faith. The introduction of a rebuttable presumption in this provision of the 2017 Regulations should make invoking the second clause of Article 32 of the PRC Trademark Law easier against applicants that are involved in the same industry as a prior user, and with any luck, will usher in a period of jurisprudential consistency for cases involving such preemptive filings. 

The 2017 Regulations were issued within days of the issuance of new Trademark Examination and Review Standards by the SAIC. The new examination and review standards are extremely detailed and appear to support and augment the 2017 Regulations. INTA and the TOPC—China Subcommittee will be preparing a detailed summary and translation of the new examination and  review standards, which will be available to INTA membership in a separate publication later in 2017.

 © 2017 International Trademark Association