On October 14th, the Supreme People’s Court (SPC) issued a draft judicial interpretation (JI) for public comment regarding judiciary review of decisions related to trademark examination and invalidation procedures. The deadline for submitting comments is November 15th.
The draft JI will be a fundamental piece to the new China trademark system as the new trademark law has been in effect as of May 2014. The draft JI intends to provide consistent standards of conducting judiciary reviews of decisions made by the China Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) on trademark examination, invalidation, cancellation and other review procedures. The Beijing courts and CTMO/TRAB often have different opinions on some key trademark issues, such as how to deal with bad faith trademarks. Even the courts themselves are often seen to come up self-contradicting decisions.
The 29-article JI includes fairly detailed rules as to determination of well-known trademarks, bad-faith trademark applications, prior rights and procedural provisions. For some of the controversial rules, the SPC even offers two versions for comments, which demonstrate improved transparency and openness.
Notable improvements include:
- The draft JI allows the courts to adjudicate on factual and legal issues that a litigant raises in the earlier TRAB/TMO proceeding but fails to raise in the litigation. This gives some more discretion to the judges to handle the cases.
- The draft JI allows the courts to reject registrations filed by someone who have filed large volume of pirated marks.
- Bad faith is presumed if the cited mark became well known before the application of the disputed mark and the applicant of the dispute mark knows or should know the well-known mark.
- The draft JI recognizes the protection of celebrity’s names and even characters in film or animation movies. This is a clear advancement.
- The validity of co-existence agreement is clearly accepted by the courts under the JI
- The draft JI allows admission of new evidence in the legal proceedings in certain circumstances. This has officially accepted the current practice that some judges have been doing.
But, the draft trademark JI has not resolved all the concerns of legitimate brand owners, even some long lasting ones. Some other improvements that brand owners may wish to have but are not in the JI includes:
- The JI asks to consider the reputation of the later filed pirate marks. But it is not clear as to what the point of time is: is it the time of the application date of the pirate mark or the time of adjudicating the disputes. If the JI allows the judges to consider the “reputation” that was developed by the pirate mark, that would be a varied version of the doctrine of “inclusive development”, causing significant detriment to the legitimate brand.
- The JI also does not address the issue how the overseas reputation of the legitimate brand will be considered. Very often the courts/TRAB/TMO only considers the foreign brands must be reputable or even famous in the mainland China before the application date of the pirate mark. This could be a very tough standard to meet.
Overall speaking, the draft JI has responded to quite a few legal and practical concerns that brand owners have in China. But the challenges, such as bad faith trademark applications, will continue to remain, especially for those brand owners having less prominent presence in China.