China: Starting Time Of Application For Three-Year Non-Use Trademark Cancellation

Last Updated: 27 August 2014
Article by Jason Wang

The cases of three-year non-use trademark cancellation have been on the rise in the recent years and have attracted more and more attention. However, as to some special circumstances (such as the trademark obtaining registration after the opposition procedure and the international trademark registration designating China for territorial extension), the registration date (the date when the exclusive right to use a trademark is granted) may probably be inconsistent with the date when the registration status has been confirmed (the date when the trademark administration or judicial authority finally determines and grants the trademark right). As for the calculation of the starting time of application for three-year non-use trademark cancellation under those special circumstances, there are still certain "minefield" and "blind spots" in practice, which shall deserve much attention. In particular, Administrative Measures for Law Firm's Engagement in Trademark Agency Business jointly promulgated by the State Administration for Industry and Commerce (SAIC) and the Ministry of Justice has been implemented since January 1, 2013. The PRC attorneys-at-law at the law firms licensed by the justice department may encounter the aforementioned issues when engaging in such new business of trademark agency.

Ⅰ. Circumstances where the registration date is inconsistent with the date when the registration status is confirmed for trademarks

Article 44(4) of the Chinese Trademark and Rule 39 of Implementing Regulations of the Chinese Trademark Law prescribe that any entity or individual can file the cancellation application against a registered trademark which has ceased to use for three consecutive years. Undoubtedly, one of the fundamental requirements to claim the cancellation against the trademark registration based on three-year non-use is that the third anniversary of the trademark registration has expired, starting from the registration date to the application date of cancellation. The issue is, the registration date (the time when the exclusive right to use a trademark is granted) may probably be inconsistent with the date when the trademark registration status is confirmed (the time when the trademark administration or judicial authority finally determines and grants the trademark right). Trademark Examination Standard stipulates the starting time of application for three-year non-use trademark cancellation, namely, three years traced back to the date of cancellation application. However, the regulations do not directly and clearly define the nature of the time node at the other end of said three years, namely, whether the time node at the other end is trademark registration date or the date when the registration status is confirmed. It seems that there is legal vacancy in deciding the starting time of application for three-year non-use trademark cancellation, and the "law" is absent for application here. It is exactly because of the legal vacancy in appearance that different interpretations on existing legislations have caused confusion, questioning and disputes among the public.

According to Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law, where the trademark registrant against which the application for three-year non-use cancellation is filed fails to furnish, upon receipt of the notice from the Chinese Trademark Office, evidence and materials of use of the subject trademark before the date on which the application for cancellation is filed, the trademark registrant shall provide the justified reasons for the non-use. Trademark Examination Standard and Rule 20 of the SPC Opinions on Several Issues concerning Trial of Administrative Cases involving Granting and Determination of Trademark Rights (Fa Fa [2010] No. 12) stipulates that force majeure, policy restriction, bankruptcy liquidation and other reasonable and objective reasons which cannot be attributed to the trademark registrant can be identified as justified reasons. In current practice, the CTMO holds the view that when the registration date is inconsistent with the date when the trademark registration status is confirmed, it should be three years from the confirmation date of trademark registration status to the application date of three-year non-use trademark cancellation. Otherwise, the CTMO will issue a rejection notice of the cancellation application and will not accept the case. The legal basis for this practice also seems to be justified reasons. Namely, until the registration status is confirmed, the registrant has justified reasons for non-use of the trademark, and the registered trademark shall not be cancelled due to non-use in three consecutive years.

The circumstances where the registration date is inconsistent with the confirmation date of registration status mainly include those as described below: trademarks obtaining registration after the opposition procedure, and international trademark registrations designating China for territorial extension.

Ⅱ. Trademarks obtaining registration after the opposition procedure

According to Article 30 of the Chinese Trademark Law, for a preliminarily approved trademark, if no opposition has been filed upon expiration of the publication period, the registration shall be approved, a certificate of trademark registration shall be promulgated, and the trademark registration shall be published. Article 37 of the Chinese Trademark Law stipulates that the period of validity of a registered trademark shall commence from the date of approval for registration. Thus, the date when the exclusive rights to use a trademark is granted is in general the same as the date when the registration status is confirmed. However, Paragraphs 2 and 3, Article 34 of the Chinese Trademark Law stipulate as follows: "Where the opposition is dismissed, the registration for the opposed trademark shall be approved, a certificate of trademark registration shall be promulgated, and the trademark registration shall be published. Where the trademark obtains registration after opposition based on the ground that the opposition arguments are dismissed, the time for the applicant to obtain the exclusive right to use the trademark commences from the expiration date of three-month preliminary approval publication period." Thus, for a trademark obtaining registration after the opposition procedure, the date when the exclusive right to use the trademark is granted is inconsistent with the date when the registration status is confirmed. It is the exact reason that Paragraph 3, Article 34 thereof clearly stipulates the registration date for the trademark obtaining registration after the opposition procedure, while the other relevant laws do not prescribe the express regulations on the starting time of application for the three-year non-use trademark cancellation. Thus, the general public tends to misunderstand that the date of cancellation application against the trademark obtaining registration after the opposition procedure shall commence from the expiration date of the three-month preliminary approval publication period. In addition, because Implementing Regulations of the Chinese Trademark Law is lower than the Chinese Trademark Law in term of legal hierarchy, the application of Paragraph 2, Article 39 of Implementing Regulations of the Chinese Trademark Law seems to "conflict" with Paragraph 3, Article 34 of the Chinese Trademark Law which is on the higher legal hierarchy, leaving the general public at a loss.

According to current practice of the CTMO, for the trademark obtaining registration after opposition procedure, the starting time of the application for the three-year non-use cancellation should be three years from the completion of opposition procedure (including subsequent opposition review or administrative proceeding) to the application date of cancellation. Rule 23 of Implementing Regulations of the Chinese Trademark Law regarding other specific regulations concerning the opposed trademark also reflects the justified reasons for non-use of the opposed trademark stipulated in Paragraph 2, Article 39 of Implementing Regulations of the Chinese Trademark Law, and Rule 23 thereof may be used for contrast and reference.

First, Paragraph 3, Rule 23 of Implementing Regulations of the Chinese Trademark Law stipulates that the trademark obtaining registration after the adjudication on the opposition shall not have retroactive effect on another person's act to use a sign identical or similar to said trademark registration on the identical or similar goods from the expiration date of the period for trademark opposition (the time when the exclusive right to use a trademark is granted) to the effective date of the adjudication on the opposition. The internal logic of this provision is that before the adjudication on the opposition takes effect, the right status of the opposed trademark is still uncertain. Therefore, based on the publicity effect of opposition procedure and the reasonable trust and expectation, where another person's act is in line with the legal features of trademark infringement occurring from the date when the opposed trademark obtains the exclusive right to the date when the administrative or judicial authority confirms the right status of the opposed trademark, said act shall still be excluded from the scope of trademark infringement. In other words, although the trademark has been registered during that period, the right of said registered trademark is subject to certain restriction. From the expiration date of the three-month preliminary approval publication period to the date when the registration status of the opposed trademark is confirmed, based on the same anticipation (namely, the possibility of the opposed trademark being rejected for registration and the possibility of infringing upon other's right if the opposed trademark is used), the applicant of the opposed trademark also has sufficient reasons for non-use of the opposed trademark within the aforementioned period. It reflects the principle of the interests balance between the trademark owner and the other parties, and the principle of equality of rights and obligations. Therefore, contrasting and referring to Rule 23 of Implementing Regulations of the Chinese Trademark Law, the starting time when the cancellation application shall be calculated from the date when the adjudication on the opposition takes effect.

Second, Paragraph 4, Rule 23 of Implementing Regulations of the Chinese Trademark Law stipulates that the time limitation for the application for review and adjudication regarding the trademark obtaining registration after the adjudication on the opposition shall be calculated from the publication date of the adjudication on the trademark opposition. Here, the time limitation for the review and adjudication shall be calculated from the publication date of the adjudication on the trademark opposition, rather than the expiration date of the publication period for the three-month preliminary approval (the time when the exclusive right to use a trademark is granted). Here, a basic conception and rule needs clarification that the review and adjudication on cancellation aims at the registered trademark. Namely, when filing an application for review and adjudication on cancellation, it is clear and certain that the subject trademark has already obtained registration. Only after the adjudication on opposition has taken effect and the opposed trademark has obtained registration, may the third party and the public file an application for review and adjudication. However, prior to the effectiveness of the adjudication on opposition, the right status and the legal effect of the opposed trademark still remains uncertain. The mandatory requirements of law regarding trademark use for three consecutive years are only applicable to the registered trademark, rather than the unregistered trademark or during the period prior to its registration status has been confirmed. Since the status on whether the opposed trademark can obtain registration can be confirmed until the completion of the opposition procedure, it will be obviously inconsistent with the jurisprudence and legal spirit, if mandatory requirements are imposed for trademark use before the completion of opposition, opposition review or administrative procedure.

Ⅲ. International trademark registrations designating China for territorial extension

First, Rule 19 of Implementing Measures of Madrid International Trademark Registration promulgated by the SAIC prescribes as follows: "Where an international trademark registration that has been protected in China is under any of the circumstances prescribed in Article 41 of the Chinese Trademark Law, the application for adjudication on disputes or cancellations shall be filed with the Trademark Review and Adjudication Board (TRAB) after the expiration of the time limitation for rejection of such trademark in China." The application for cancellation prescribed here obviously excludes the circumstance of three-year non-use cancellation against the registered trademark prescribed by Article 44(4) of the Chinese Trademark Law. Thus, Implementing Measures of Madrid International Trademark Registration can be used for reference, but cannot be directly applied to three-year non-use cancellation of the international trademark registration. As to the starting time to apply for the three-year non-use cancellation of the international trademark registration designating China for territorial extension, the most directly related current legal basis may be traced back to the justified reasons prescribed in Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law.

Second, according to the Madrid Agreement and the Madrid Protocol, the legal protection of the exclusive right to use an international trademark registration shall commence from the registration date of such trademark. Rule 20 of Implementing Measures of Madrid International Trademark Registrations regulates as follows: "International trademark registration designating China for territorial extension may, as of the date when the time limitation for rejection of the trademark has expired, apply to the CTMO for issuing the certificate proving that the trademark has been protected in China." According to the foregoing provision, the date when the registration status of the international trademark registration in China may be confirmed is the expiration date of the rejection time limitation thereof. The time limitation of rejection is a very important conception in determining the status of the international trademark registration. The time limitation of rejection shall be calculated as 12 months (for the registrant of international trademark registration of a contracting party to the Madrid Agreement) or 18 months (for the registrant of international trademark registration of a contracting party to the Madrid Protocol) since the Docketing Date as indicated in the application received by the authority of the designated contracting party (i.e. the CTMO where the international trademark registration designates China for territorial extension). It is worth noting that the Docketing Date is different from the registration date for the international trademark registration. The registration date of the international trademark registration as of the time when the exclusive right thereof is protected by the Chinese law is inconsistent with the date when the registration status (namely, the status of protection designating China for territorial extension) of such trademark in China is confirmed. It is the exact reason that the registration date of the international trademark registration is inconsistent with the date when the registration status of such trademark in China is confirmed. Therefore, before the expiration of the time limitation of rejection, it cannot be ascertained whether such international trademark registration may be entitled to the exclusive right in the end. Thus, according to the similar logic and reasons above mentioned for the application for three-year non-use cancellation of trademark obtaining registration after opposition procedure, the starting time of the application for three-year non-use cancellation against the international trademark registration designating China for territorial extension shall be calculated from the expiration date of the time limitation of rejection in China, rather than the registration date.

In addition , many differences exist between the international trademark registration designating China for territorial extension and the trademark application for registration directly filed in China. Compared with the trademark application for registration directly filed in China, the international trademark registration designating China for territorial extension is more complicated. Thus, the public and practitioners in China have relatively fewer knowledge of the procedures and regulations of the international trademark registration. At present, the CTMO website can directly demonstrate the registration date of the international trademark registration, but it cannot show the time limitation of rejection of such international trademark registration. The WIPO website cannot directly show the time limitation of rejection of the international trademark registration, either. The time limitation of rejection of the international trademark registration designating China for territorial extension may only be calculated after securing the information about the Docketing Date through the WIPO website. This is also an important reason why the interested parties, trademark agents and attorneys tend to confront with "minefield" and "blind spots" in practice.

Ⅳ. Suggestions

First, because of the legal vacancy and vague definition among different regulations, there are different understandings among the public about the starting time of the application for three-year non-use cancellation. This not only misleads the public to make wrong assessments and expectations, but also takes up the precious review resources of trademark administrative authorities. Avoiding unnecessary examination workload is a very important aspect to save the administrative resources and shorten the time frame of examination. Obviously, it is necessary to illustrate to and instruct the public by multiple means in addition to trainings and presentations concerning trademark business, such as specifying the starting time in special circumstances of three-year non-use cancellation against the registered trademark in legal instruments with the legal hierarchy such as as Trademark Examination Standard or notice, or even Implementing Regulations of the Chinese Trademark Law.

Second, the applicants, the trademark agents, and the attorneys involved in the case of three-year non-use cancellation of the registered trademark shall make full preparations in advance, investigate relevant facts and study relevant laws. Especially for the trademark agents and attorneys, they shall endeavor to probe into and reveal risks beforehand, so as to precisely master the time limitation of filing the application for three-year non-use cancellation of the registered trademark, combined with other information resources. Specifically speaking, the CTMO website can only reveal the date of the adjudication on trademark opposition and the opposition review, the information concerning the trademark administrative litigation procedures shall be verified combined with trademark publication gazette and other resources. As for the right status and information of the international trademark registration, it shall be acquired through the WIPO website and relevant trademark publication gazette in addition to the CTMO website. The trademark agents and PRC attorneys-at-law who newly enter into trademark agency industry shall pay more attention when engaging in the application for three-year non-use cancellation of the registered trademark.

* This article is the English translation for Mr. Wang's article in Chinese published on China Trademark magazine (Issue 2, 2013). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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