China Law Library

Trademark Administrative Appeals

China’s Supreme Court Rules on Trademark Administrative appeals empower courts to look beyond a plaintiff’s pleadings when reviewing Trademark Office decisions. They establish clear grounds for trademark refusal or cancellation, as well as set detailed standards on how to judge non-use, geographic indications, bad faith, and new evidence. The Rules, translated into American English by CBL, help companies understand their rights if they disagree with a determination made by a trademark examiner as to their China trademark.

Contents

China Supreme Court Rules for Judicial Reviews of Administrative Trademark Decisions

(Adopted by the Supreme Court Judicial Committee during the 1703rd session on December 12, 2016, and amended by the Supreme Court Decision to Amend 18 Patent Infringement Case Law Application Intellectual Property Interpretations (2), adopted during the 1823rd session of the Supreme Court Judicial Committee on December 23, 2020)

The purpose of these Rules is to formalize judicial precedent into guidelines for judicial reviews of administrative trademark decisions under the Trademark Act of the People’s Republic of China (hereinafter the “China Trademark Act”) and the Civil Procedure Act of the People’s Republic of China (hereinafter the “Civil Procedure Act”).

Section 1 Actions against administrative trademark decisions in these Rules refer to lawsuits brought by plaintiffs or parties in interest challenging decisions made by the China National Intellectual Property Administration (the “Administration”), including initial trademark cancellations and decisions for appeals against non-final trademark refusals, final refusals to register, and cancellations.

Section 2 The court shall determine the extent of its review of an administrative trademark decision based on the claims and basis submitted by the plaintiff. However, the court may review and adjudicate additional Administration decisions that were not raised by the plaintiff after hearing arguments from both parties if it finds such decisions are improper.

Section 3 The phrase “identical or similar” to the name of the People’s Republic of China as provided in § 10(a)(1) of the China Trademark Act refers to a mark that is overall identical or confusingly similar to the official name of China or any other related national identifiers.

Courts may hold that a mark containing all or part of the official name People’s Republic of China or any other similar identifier falls under § 10(a)(8) of the China Trademark Act if its registration as a trademark could potentially harm China’s dignity.

Section 4 Courts shall uphold Administration decision made under § 10(a)(7) of the China Trademark Act (2001 amendment) when a trademark or any of its constituent elements is deceptive and likely to mislead the public as to the quality of the goods or their source.

Section 5 Courts shall hold that a trademark has a bad influence under § 10(a)(8) of the China Trademark Act if it or any of its constituent elements could potentially undermine public order or the public interest in China.

Courts shall also hold that a trademark incorporating the names of prominent individuals from politics, economics, or religious or ethnic groups has a bad influence.

Section 6 Courts shall not apply § 10(b) to a trademark that incorporates the name of an administrative area above the county level or a famous foreign place if they find that the overall trademark conveys a meaning distinct from such geographic indications.

Section 7 Courts shall rule on the distinctiveness of a disputed trademark based on findings about the consuming public’s perception of the source of the goods. A trademark that includes descriptive elements shall be held distinctive provided that such element does not impair the overall distinctiveness or is presented in a distinctive manner that allows consumers to readily identify the source of the goods.

Section 8 Courts shall rule on the distinctiveness of a foreign-language disputed mark based on the general perception of the Chinese consuming public. The inherent meaning of a foreign language in a trademark can affect how distinct it appears on goods sold under the registered trademark. However, if the consuming public has a limited understanding of such meaning but recognizes the source of the goods, such trademark shall be held distinctive.

Section 9 Petitions for three-dimensional marks that consist solely or partially of the shape of goods shall be dismissed for lack of distinctiveness if the shape alone is insufficient for the consuming public to readily identify the source of the goods.

Such a shape, even if created or first used by the applicant, does not automatically confer distinctiveness as a trademark.

A mark covered under subsection 1 hereof shall be held distinctive if it has been used extensively or for a prolonged period in a manner that allows the consuming public to clearly identify the source of the goods.

Section 10 Courts shall hold that a disputed mark is generic if it constitutes a legal or commonly accepted product name pursuant to subsection 11(a)(1), of the Trademark Act. Terms recognized as generic names for goods under law or national or industry standards shall be held as generic names. Names widely recognized by the consuming public as referring to a specific class of goods shall be held as generic. Listings in specialized reference books or dictionaries may be used to support findings of generic names.

A term may be held as generic when it has achieved widespread usage among the consuming public, and such ruling shall be based on the general understanding of the Chinese consuming public. Additionally, courts shall hold that a product name prevalent in historical traditions, local customs, or geography is generic.

Courts shall hold a disputed mark as generic if registered by an applicant who knows or should know that their mark uses a name recognized as a regionally generic product name.

Courts shall generally consider the fact that existed at the time of trademark application when ruling on whether a disputed mark is a generic name. Any changes in such fact occurring at the time of registration approval will directly affect the findings of whether the name remains held as generic.

Section 11 Courts shall rule a trademark solely or primarily describing or specifying the quality, main ingredients, functions, uses, weight, quantity, or origin of the goods as falling under § 11(a)(2) of the China Trademark Act. However, a mark or its elements that merely suggest product features without diminishing their capability to indicate the source of the goods may be exempt from such classification.

Section 12 Courts shall assess the following factors to rule on the likelihood of confusion should any party assert that a disputed mark warrants refusal or cancellation under § 13(b) of the China Trademark Act due to being a direct copy, imitation, or translation of an unregistered famous mark:

(1) The similarity between the trademarks;

(2) The similarity of the goods associated with the trademarks;

(3) The distinctiveness and level of commercial recognition of the trademark for which protection is sought;

(4) The perception of the consuming public;

(5) Other factors deemed pertinent.

Courts may also consider the subjective intent of the trademark applicant and evidence of actual confusion when ruling on the likelihood of confusion.

Section 13 Courts shall assess the following factors should a party claim that a mark is a copy, imitation, or translation of a famous mark warranting refusal of registration or invalidation under § 13(c) of the China Trademark Act when ruling on whether the disputed use may create an association with the famous mark, and thus mislead the consuming public and harm the interests of the owner of the famous trademark:

(1) The distinctiveness and degree of commercial recognition of the famous trademark;

(2) The degree of similarity between the trademarks;

(3) The class of goods associated with the trademark;

(4) The overlap and perception of the consuming public;

(5) Other relevant factors, including the lawful use of marks similar to the famous mark by other commercial enterprises.

Section 14 If the Administration supports a claim asserting that a disputed mark is a copy, imitation, or translation of a registered famous trademark warranting registration refusal or invalidation under § 30 of the China Trademark Act, the court shall adjudicate the matter pursuant to § 30 of the China Trademark Act after considering both parties’ arguments. If the mark has been registered for more than five years, the court will adjudicate the matter under § 13(c) of the China Trademark Act.

Section 15 Courts shall adjudicate any matter in which a trademark agent or representative, including sales and distribution agents or representatives, applies to register a trademark identical or similar to the trademark of their principal or party they represent for identical or similar goods in their name without proper authorization under § 15(a) of the China Trademark Act.

Courts shall also adjudicate any matter where such applications occur during the negotiation phase for establishing an agency or representative relationship under § 15(a) of the China Trademark Act.

Courts may infer there was bad faith where a trademark application is filed by an agent or representative who has an established relationship, including familial relationships, with the rightful trademark owner, and shall adjudicate such a matter pursuant to § 15(a) of the China Trademark Act.

Section 16 The following circumstances may be held as “other relationships” provided by § 15(b) of the China Trademark Act:

(1) A familial relationship between the trademark applicant and the prior user;

(2) An employment relationship between the trademark applicant and the prior user;

(3) The proximity between the trademark applicant’s business address and that of the prior user;

(4) Negotiations between the trademark applicant and the prior user regarding the creation of an agency or representative relationship, despite no such relationship being formed;

(5) Negotiations between the trademark applicant and the prior user to establish a contractual or business relationship, despite no such relationship being formed.

Section 17 A party in interest for a geographical indication may argue against the registration or for the invalidation of another party’s mark pursuant to § 16 of the China Trademark Act. The court shall uphold such a claim if the goods associated with the disputed mark are not identical to those bearing the geographical indication and the party in interest can demonstrate that the use of the disputed mark is likely to mislead the consuming public into believing that such goods originate from the specified region and thereby possess a particular quality, reputation, or other features.

The rights holder or a party in interest to a geographical indication registered as a collective or certification mark may assert their rights collectively under this Section or separately under §§ 13 or 30 of the China Trademark Act.

Section 18 “Prior rights” as provided in § 32 of the China Trademark Act include civil rights or any other legally protectable rights held by the prior user prior to the application date of the disputed mark. The absence of such prior rights at the time the disputed mark is approved for registration shall not affect the validity of the registration.

Section 19 If a party alleges that the disputed mark infringes its prior copyright, the court shall examine whether the claimed subject matter constitutes a work, whether the party is the copyright owner or has a proprietary interest, and whether the disputed mark constitutes an infringement under the China Copyright Act and other applicable laws.

If the trademark constitutes a work protected under the China Copyright Act, materials submitted by the party, including preliminary design drafts, final drawings, contracts proving the assignment of rights, and copyright registration certificates issued prior to the application date of the disputed mark, may serve as prima facie evidence of copyright ownership.

Official trademark gazettes and trademark registration certificates may serve as prima facie evidence establishing that the trademark applicant has a proprietary interest in and is entitled to assert copyright to the mark.

Section 20 If a party alleges that the disputed trademark infringes upon its right to name and the consuming public perceives the mark as referring to an individual, thus inferring that the goods bearing the mark are either authorized by or associated with that individual, the court shall hold that the trademark infringes upon that individual’s right to name.

The court shall uphold claims where a party asserts rights to a specific name that has attained definite commercial recognition, including a pseudonym, stage name, and translated name, and created a stable association with the natural person.

Section 21 Courts shall uphold claims asserting that a trade name constitutes a prior right if it has attained definite commercial recognition and another party registers a mark identical or confusingly similar to such trade name in a manner likely to confuse the consuming public regarding the source of the goods.

The preceding provisions shall also apply if a party bases its claim on an abbreviation of a trade name that has achieved a certain level of commercial recognition and created a stable association with the business.

Section 22 Pursuant to § 19 of these Rules, courts shall rule on any allegations that a disputed mark infringes upon a party’s copyright in the portrayal of a fictional character.

The courts shall uphold a priority rights claim to a work still under copyright protection if the title of the work or the names of characters in the work have a high level of commercial recognition and are used as a trademark on goods in such a way as to mislead the consuming public into believing that the use is authorized by or associated with the rights holder. The court shall uphold claims that such use constitutes a prior right.

Section 23 A prior user may assert that a trademark applicant raced to register a prior user’s mark that was already influential. If the prior mark was already influential and the trademark applicant knew or should have known of the prior mark was influential, the court may hold it to be illegitimate trademark squatting. The presumption of bad faith shall remain valid unless the applicant demonstrates by clear evidence that the registration was not in bad faith or intended to exploit the goodwill associated with the prior user’s mark.

The court may find that a prior user’s mark possesses sufficient influence if substantial evidence demonstrates a prolonged period of continuous use, widespread geographic reach, significant sales, or substantial advertising efforts.

The court shall not sustain any allegation under § 32 of the China Trademark Act based solely on a prior user‘s use and the mark’s influence when the trademark registration sought is for goods dissimilar to those associated with the prior use.

Section 24 Except in instances of trademark spoofing, any action that disrupts the ordinary trademark registration process, undermines the public interest, improperly uses public resources, or solicits improper benefits may be ruled as improper under § 44 (a) of the China Trademark Act.

Section 25 In ruling whether an applicant’s registration of a famous mark owned by another registrant constitutes bad faith, the court shall assess the applicant’s subjective intent through thorough consideration of the senior mark’s degree of commercial recognition, the rationale provided by the applicant, and the specific facts surrounding its use. The court may infer that such registration was made in bad faith under § 45(a) of the China Trademark Act if the applicant fails to provide a legitimate basis for registering a mark similar to one with a high degree of commercial recognition.

Section 26 The use of a trademark by its owner, authorized licensees, or in any manner consistent with the trademark owner’s intent shall be ruled as permissible use under § 49(b) of the China Trademark Act.

The active use of a mark having only superficial differences to a registered trademark without altering its distinctiveness shall be ruled as use of the registered trademark.

Mere assignment, licensing, disclosure of registration information, or claims of exclusive rights to the registered trademark shall not constitute actual use of the registered trademark.

Furthermore, the court shall find the non-use of a trademark by its owner legitimate if the trademark owner demonstrates a genuine intent to use the registered trademark and has made the necessary preparations but has not yet used the mark due to objective circumstances.

Section 27 The court shall uphold a party’s claim that the Administration has violated statutory procedures under § 70(c) of the China Administrative Procedure Act if it finds that the Administration took any of the following actions:

(1) Omitted the reasons for the appeal submitted by the party, thereby adversely affecting the party’s interests;

(2) Failed to disclose the names of panel members when a recusal was warranted during examination;

(3) Failed to notify the appropriate party to participate in the appeal, resulting in that party raising a subsequent objection;

(4) Other violations of statutory procedures.

Section 28 The court may revoke prior decisions made by the Administration if a newly discovered fact indicates that the basis for the initial refusal, final refusal, or cancellation of the registration for the disputed mark no longer applies and may order the Administration to issue a new decision reflecting the changed circumstances.

Section 29 A party’s request for a new appeal shall not be held a repetition of identical facts and reasons if it is substantiated by new evidence that emerged after the initial administrative action, evidence that could not have been presented during the initial administrative proceedings due to objective circumstances or within the statutory deadline, or if it is founded on a new legal basis.

However, the following shall not be ruled as a new appeal based on identical facts and reasons during the trademark refusal appeals process if the Administration has published the proposed trademark in the official gazette following a preliminary determination that the proposed mark and the existing mark for the same or similar goods are not identical or similar:

(1) An appeal filed by the applicant against an opposition raised by the owner or an interested party to the existing mark when such opposition is supported by the Administration;

(2) A petition filed by the owner or an interested party to the existing mark seeking cancellation of the applicant’s mark.

Section 30 The court shall dismiss any lawsuit challenging a new decision issued by the Administration under a final and binding court judgment that has conclusively established the facts and applicable law as inadmissible, and the court shall order the dismissal of any such pending lawsuits.

Section 31 These Rules shall take effect on March 1, 2017. Courts may apply these Rules to administrative proceedings involving trademark decisions issued under the China Trademark Act (2001 amendment).

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