How to Effectively Respond to Rejection of an Application for Trademark Registration

Yuan Mei

Watson & Band Law Offices

After receiving a filing for a trademark registration, the China Trademark Office (hereinafter the “CTMO”) will initiate both formal and substantive examination. After examination, the trademark subject to the application (hereinafter the “current trademark”) will either be preliminarily approved and published by the CTMO, or be rejected by the CTMO on either “absolute grounds” or “relative grounds”. 

The CTMO’s rejection of a trademark registration application based on absolute grounds is rooted in protection of the public interest. Absolute grounds are based on the inherent non-registerability of the trademark for reasons such as non-conformity with public order and good morals or lack of distinctiveness. A CTMO rejection of a trademark registration application on absolute grounds is usually based on Articles 10, 11 and 12 of the P.R.C. Trademark Law.

The CTMO’s rejection of a trademark registration application based on relative grounds is rooted in the protection of another party’s prior trademark rights in order to avoid conflicts between the current trademark and the other party’s prior trademark rights. A CTMO rejection of a trademark registration application on relative grounds is usually based on Articles 30 and 31 of the P.R.C. Trademark Law.

After a trademark registration application is rejected by the CTMO, the applicant can file a petition for review with the Trademark Review and Adjudication Board (hereinafter “TRAB”). Under certain circumstances, he can also institute countermeasures to eliminate prior rights obstacles created by the cited trademark and thereby obtain registration approval ultimately.

I.   Responding to a Rejection of a Trademark Registration Application through Review

(I)   Responding to Absolute Grounds in a Rejection Review Request

The CTMO’s absolute grounds for rejection are based on Articles 10, 11 and 12 of the P.R.C. Trademark Law. If a proposed trademark violates public order and good morals, or if it lacks distinctiveness, the CTMO will reject it on this basis.Requests for a TRAB review of a trademark rejection based on absolute grounds typically include both direct indirect arguments.

1.Direct Arguments 

When adjudicating a rejection review request involving absolute grounds, TRAB usually follows specific examination principles set forth in the Standards for Trademark Examination and Trial that was jointly promulgated by TRAB and the CTMO. The applicant may win registration by successfully arguing that unusual circumstances justify applying an exception to the examination principles. Consequently, direct arguments usually take this form.

2.Indirect Arguments

Article 11.2 of the P.R.C. Trademark Law provides that, “The mark referred to in the preceding paragraph may be registered as a trademark if it has acquired distinctiveness through use and if it is readily distinguishable.”

If the CTMO rejects a trademark registration application based on any absolute ground listed in Article 11.1 of the P.R.C. Trademark Law, the applicant can provide evidence that he has used a trademark that lacks distinctiveness on his goods for a long period before the filing the application. This evidence can be used to prove that a very strong correspondence already been established between the trademark, such that the target market identifies the trademarked goods with the applicant -- in other words, that the trademark in fact plays a key role in distinguishing the source of the goods. When collecting such evidence, the applicant should refer to the requirements for the collection of evidence to establish the well-known status of a trademark.

(II)  Responding to relative grounds for rejection in a CTMO rejection review request

CTMO’s absolute grounds for rejection are based on Articles 30 and 31 of the P.R.C. Trademark Law. In general, if a trademark is identical or similar to another party’s prior cited trademark (including registered trademarks, preliminarily approved and published trademarks, and trademarks with pending registration applications) on identical or similar goods, the current trademark will be rejected by the CTMO under Articles 30 and 31 of the P.R.C. Trademark Law. 

In TRAB review requests based on relative grounds, the reasoning submitted by the applicant normally includes both direct and indirect arguments.

1.Direct Arguments

The key to success in a rejection review request lies in presenting the argument that the current trademark is neither identical nor similar to the other party’s prior cited trademark on identical or similar goods. Logically, as long as any of the following requirements is met, the desired ruling that the current trademark is neither identical nor similar to the other party’s prior cited trademark on identical or similar goods is achievable.

(1)  The goods designated by the current trademark are not identical or similar to the goods designated by the other party’s prior cited trademark.

The TRAB review request procedure is an extension of the application examination procedure at the CTMO, and both procedures rely on the unity and efficiency of the standards for trademark registration examination. In both procedures, the determination of whether the goods designated by the current trademark and the cited trademark are identical or similar normally strictly follows the classification of similar goods under the latest Classification Table of Similar Goods and Services published by the CTMO -- examples outside the Table are rare in practice. Consequently, if the CTMO rejects a trademark application in strict compliance with the Classification Table of Similar Goods and Services, it is usually difficult for the applicant to successfully argue that the goods designated by the current trademark and the cited trademark are neither identical nor similar.

Note: In recent years, when TRAB has departed from the Classification Table of Similar Goods and Services, the departure has occurred in trademark non-registration reviews (previously known as trademark opposition reviews) and trademark invalidity declarations (previously known as trademark dispute adjudications). The reason for this phenomenon lies in the differing institutional functions and value orientations among non-registration, invalidity declarations and trademark application rejection review requests. Specifically, trademark rejection reviews focus more on the unity and efficiency of trademark registration examination standards, while non-registration reviews and invalidity declarations focus more on the protection of specific civil rights and interests as well as the special features of each case and actual case facts (e.g. usage conditions, popularity, distinctiveness of the claimed trademark, subjective malice in filing registration applications for opposed/disputed trademarks, etc.).

In practice, sometimes goods designated by the current trademark and/or the cited trademark do not fall within the standard designations of goods under the Classification Table of Similar Goods and Services. In this case, the applicant should not be limited to the category and similar groups determined by the CTMO for non-standard designations; instead, an analysis and comparison of the goods designated by the current trademark and the cited trademark should be conducted based on the general knowledge of consumers in terms of the function, usage, manufacturer, sales channels and consumer groups for the goods, so as to identify the differences and reach the conclusion that the goods designated by the current trademark and the cited trademark are dissimilar.

(2)  The current trademark is neither identical nor similar to the other party’s prior cited trademark.

The applicant can compare the current trademark with the cited trademark to discover differences between the two in terms of (i) the appearance, pronunciation and/or meaning of the words contained therein; (ii) the composition and colors of the devices contained therein; or (iii) the overall structure in consideration of the combination of the various elements, to support the argument that the current trademark and the cited trademark are neither identical nor similar.

When presenting the argument that the current trademark and the cited trademark are not identical or similar because of the foregoing differences, the principles for examination of trademark similarity and the exceptions thereto as stipulated under the Standards for Trademark Examination and Trial should be taken into consideration. If the applicant can tie the current trademark to an exception, the CTMO’s determination of similarity between the trademarks is likely to be overruled, resulting in a successful rejection review.

2.Indirect Arguments

After presenting direct arguments, the applicant can consolidate them by proving the following facts to nudge the TRAB examiners’ discretion in a favorable direction.

(1)  The current trademark and the cited trademark have long coexisted in the market.

The current trademark and the cited trademark have long coexisted in domestic or foreign markets, and their coexistence helps distinguish the sources of the goods and have not caused consumer confusion regarding the sources of the goods.

(2)  Precedents support examination in favor of the applicant.

Applicable precedents might be found in the examination practices of the CTMO or any foreign trademark office; in these examples, the differences between registered trademarks coexisting on identical or similar goods must be of the same nature as the differences between the current trademark and the cited trademark.

For example, if the rejected trademark application is in the form “Chinese word A”, and the cited trademark is in the form “Chinese word B + Chinese word A”, then prior favorable examples of examination in China that are of the same nature as the rejected trademark, as shown in the table below, will be important references for the approval of registration of the current trademark.

(3)  The current trademark has been in use for a long period, has established a relatively high market reputation, and has developed a stable clientele.

Article 1 of the Opinions of the Supreme People's Court Concerning the Trial of Administrative Lawsuits Involving the Granting and Confirmation of Trademark Rights provides as follows:

In the case of a disputed trademark that has been put into use for a relatively long time and enjoys a relatively high established market reputation and a related established clientele, the People's Court shall appropriately apply the legislative spirit of the Trademark Law regarding the balancing of the protection of the rights and interests of prior commercial marks and the maintenance of market order. The People’s Court shall fully respect the market reality that the relevant consumers have already distinguished the relevant commercial marks and shall consider the maintenance of a stable market order.

If the current trademark has been used for a relatively long period, has established relatively high market popularity, and has developed a stable clientele, the applicant should submit evidence of these facts to TRAB during the rejection review procedure. When collecting evidence of the foregoing facts, the applicant can refer to the requirements for the collection of evidence establishing that a trademark is “well-known”.

II.  Using Countermeasures to Supplement a Review of the Rejection of an Application for Trademark Registration

When the CTMO rejects a trademark registration application based on absolute grounds, in most cases the applicant’s only option is to file a petition with TRAB for review of the rejection and registration of the trademark.

When the CTMO rejects a trademark registration application based on relative grounds, the applicant can not only file a petition for rejection review with TRAB, but can also take supporting countermeasures to eliminate prior rights obstacles created by the cited trademark, in this way obtaining registration approval.

In the author’s practical experience, the applicant can consider taking the following supporting countermeasures:

(I)   When the cited trademark has been registered for over three years, the applicant can petition the CTMO for revocation of the cited trademark based on non-use of the registered trademark for three consecutive years.

If the cited trademark as been registered for over three years, when filing the petition for rejection review, the applicant can also file a CTMO petition for revocation of the registered trademark based on three consecutive years of non-use. If the cited trademark is successfully revoked, the current trademark will be approved for registration.

If the cited trademark has been registered for less than three years, the applicant should continue monitoring the legal status of the cited trademark until three years after registration of the cited trademark, and if the trademark is not used during that period, file a petition with the CTMO for revocation of the registered trademark based on three consecutive years of non-use.

(II)  If the cited trademark has been registered for less than three years, the applicant can file a petition with TRAB for a declaration of invalidity.

If the cited trademark has been registered for less than three years, when filing the petition for rejection review the applicant can also file a petition with TRAB for a declaration of invalidity of the registered trademark (provided that the specific requirements of the Trademark Law are satisfied). If the cited trademark is successfully declared invalid, the current trademark will be approved for registration.

(III) If the cited trademark has not been registered yet, the applicant should continue monitoring the legal status of the cited trademark and file an objection with the CTMO at the appropriate time.

If the cited trademark has not yet been registered, the applicant should continue monitoring the legal status of the cited trademark while the petition for rejection review is pending, and should prepare an objection to the cited trademark (including reorganizing reasoning and collecting evidence for the objection). Once the applicant discovers that the CTMO has preliminarily examined and published the cited trademark, it should file the objection with the CTMO within the three-month publication period. If the objection ultimately succeeds, the current trademark will be approved for registration.

(IV) The applicant can obtain ownership rights of or the right to use the cited trademark through negotiation.

If the cited trademark in not subject to revocation or a declaration of invalidity, or if the applicant cannot provide sufficient evidence thereof, he can negotiate with the registrant of the cited trademark and try to have the cited trademark assigned to him. If the cited trademark is assigned to the applicant, then based on the principle that “a prior trademark in the same party shall not constitute an obstacle to the subsequent registration of similar trademarks”, the prior rights obstacle created by the cited trademark will be eliminated.

If the assignment fails, the applicant can also resort to a less-than-ideal alternative, i.e. he may consider obtaining a license to use the cited trademark from the registrant. If the applicant and the registrant reach a consensus on the license to use the cited trademark, then even if the applicant does not enjoy ownership rights in the cited trademark, he will also have the legitimate right to use the cited trademark based on the trademark license contract.

(V)  The applicant can negotiate with the registrant of the cited trademark to enter into an agreement on trademark registration or an agreement on trademark coexistence

An agreement on trademark registration refers to an agreement issued by the registrant of a prior cited trademark on an application for registration of another trademark by a later applicant. An agreement on trademark coexistence refers to an agreement executed by the registrant of a prior cited trademark and an applicant for later trademark registration. A common feature of the two agreements is that both reflect the prior cited trademark registrant’s consent to the later applicant’s application for trademark registration.

In recent years, agreements on trademark registration and agreements on trademark coexistence have become important elements of trademark rejection reviews. The trademark authorization and confirmation authorities as well as the People’s Courts take such agreements into consideration when examining and determining whether or not to approve a current trademark for registration under Article 30 (originally Article 28) of the P.R.C. Trademark Law.

In an administrative lawsuit over a trademark rejection review between Deckers Outdoor Corporation and TRAB under the SAIC (the State Administration for Industry and Commerce), the Beijing Higher People’s Court issued the (2012) Gao Xing Zhong Zi No.1043 administrative judgment on February 19^th, 2013. The Court commented on the Agreement on Trademark Registration (hereinafter the “Agreement”) as follows:

According to Article 28 of the P.R.C. Trademark Law, when determining whether or not two trademarks are similar trademarks on identical goods, identical trademarks on similar goods, or similar trademarks on similar goods, one requirement is to determine whether confusion is likely to be caused among consumers. When the current trademark and the cited trademark are very similar but the registrant of the cited trademark has issued an agreement giving consent to the application for the current trademark, this agreement should be taken into consideration when examining and determining whether or not the current trademark is approved for registration under Article 28 of the P.R.C. Trademark Law, for the following reasons:

First, during the application for registration of a trademark, the decision on the likelihood of confusion under Article 28 of the P.R.C. Trademark Law is based on an assumption by the trademark authorization authority or the People’s Court on the perspective of the public; on the other hand, an agreement issued by the prior trademark rights owner who has a direct interest in the trademark, and the trademark rights owner’s determination of the likelihood of confusion should be more in line with market conditions than the determination of a disinterested party. Consequently, if there is no obvious fact indicating the likelihood of confusion, the agreement can normally function as strong evidence against this likelihood.

Secondly, a trademark right is a civil property right. Based on the principle of lex voluntatis, unless a significant public interest is involved, a trademark rights owner can voluntarily dispose of this right. The Agreement represents the prior trademark rights owner’s consent to the coexistence of similar trademarks on identical or similar goods after negotiations between the prior trademark rights owner and the subsequent trademark applicant. Such an agreement also represents the prior trademark rights owner’s disposal of his own rights. One direct objective of the Trademark Law is to simultaneously protect the rights of trademark rights owners and the interests of consumers. Only when there is sufficient evidence that an agreement issued by a prior trademark rights owner jeopardizes consumer interests will a disposal by the prior trademark rights owner be denied.

In view of the foregoing facts, when the CTMO rejects an application for registration of a current trademark on the ground that the current trademark is identical or similar to another party’s registered or preliminarily approved trademark on identical or similar goods under Article 30 of the P.R.C. Trademark Law, the applicant can try to obtain an agreement on trademark registration issued by the registrant of the cited trademark, or he can conclude an agreement on trademark coexistence with the registrant through negotiations. Nevertheless, the following issues require special attention:

(1)  If an agreement on trademark registration and/or an agreement on trademark coexistence is generated in mainlandChina, it must be notarized and authenticated. If either or both of them are generated outside of mainlandChina, in addition to notarization and authentication, a Chinese translation is required.

(2)  If similarity between the designated goods of the current trademark and the cited trademark and similarity between the two trademarks are both high, or if the cited trademark enjoys a high reputation, it is relatively unlikely that TRAB will approve registration of the current trademark based on an agreement on trademark registration and/or an agreement on trademark coexistence. In that circumstance, the applicant needs to consider other countermeasures.

(VI) The applicant can file a separate application for registration of the portion of the current trademark that remains after the conflicting component is removed.

If the current trademark includes several components (e.g. a word and a device) and only one of the components is identical or similar to the cited trademark (e.g. only the word is in conflict with the prior trademark rights), after removing the conflicting component (e.g. the device) the applicant can consider filing a separate application for registration of the remainder of the current trademark, so that the remaining portion of the trademark will be protected in time.

(VII) The applicant can re-file a CTMO application for registration.

After taking the foregoing measures to eliminate the prior right obstacles generated by the cited trademark, the applicant should re-file a registration application with the CTMO as soon as possible.

In practice, it sometimes happens that the applicant takes the foregoing measures and successfully eliminates the prior rights obstacles generated by the cited trademark, notwithstanding that TRAB has already issued an unfavorable decision on the rejection review (i.e. registration of the current trademark is denied). In this circumstance, if there is no follow-up administrative lawsuit to prolong the “life” of the current trademark, the trademark will “die” in due form. In that case, even if the prior right obstacles generated by the cited trademark are finally eliminated, the applicant will not obtain usable rights due to the absence of his own trademark application. This can easily give rise to a scenario in which another party interjects himself into the case (i.e. the other party files an application for registration with the CTMO for a trademark that is identical or similar to the applicant’s “dead” trademark for identical or similar goods during the vacuum period of the trademark rights).

Consequently re-filing an application for registration with the CTMO will be advantageous in at least the following two ways:

(1)It will help to greatly shorten the period for obtaining the right. Once the prior rights obstacle generated by the cited trademark is successfully eliminated, the application re-filed by the applicant will be immediately approved for registration.

(2)It will help avoid the scenario in which a trademark squatter files a registration application before the prior rights obstacle generated by the cited trademark is eliminated. In this scenario, after the elimination of the prior rights obstacle, the application filed by the squatter will enjoy registration approval priority.

It is worth noting that if the prior rights obstacle has already been eliminated by the time of the CTMO’s examination of the applicant’s second application, the second application will be approved for registration. If the prior rights obstacle has not yet been eliminated during the examination period, the second application will be rejected. In that circumstance, the author advises the applicant to petition TRAB for another review of the CTMO’s rejection decision. If the prior rights obstacle has been eliminated by the time of TRAB’s examination of the petition for rejection review, the rejection review will succeed and the second application will be approved.

Moreover, if necessary, the applicant can file a third trademark registration application. Suppose that during the pendency of TRAB’s examination of the rejection review of the second application, the CTMO revocation petition against the cited trademark (based on three consecutive years of non-use) has not yet been concluded or the revocation petition has entered the review procedure. In this scenario, the second trademark application will already be “dead”, regardless of whether or not the cited trademark is ultimately revoked, another vacuum period for trademark rights will appear, and the applicant will again be facing the consequence of his failure to file his own trademark application.

(VIII) The applicant can appropriately amend the current trademark and file an application for registration of the amended trademark with the CTMO.

The applicant can add word(s) to the original trademark so that the amended trademark will be distinguishable from the cited trademark in terms of overall appearance.

If, for example, the original trademark application rejected by the CTMO is the English word mark “MELVIN”, the applicant can change the trademark to “XXX MELVIN” to enhance the possibility of approval. When making such a revision, the following general principles should be observed:

(1)  The newly added word “XXX” should be English and the font, size and color of the word should be consistent with the font, color and size of the word “MELVIN”;

(2) The added portion “XXX” and the original word “MELVIN” should form an organic whole; in other words, there should not be any element between the two words that might separate the words into independent portions, e.g. a dot, a hyphen/dash or graphics;

(3)  The added word “XXX” should be arranged in the same position as the original word “MELVIN”; in other words, the two words should not be placed on two lines or two columns, so that they will not generate two independent portions;

(4)  The newly added word “XXX” should possess relatively strong distinctiveness on its own. In other words, it can be a unique trade name created by the applicant, but cannot be a word with relatively weak distinctiveness such as an adjective, an adverb, article, number or single letter; nor can it be a word with relatively weak distinctiveness that represents quality, main materials, function, usage, weight, quantity or other features of the goods designated by the trademark.