China: Beijing IP Court's Stricter Formalities For Trademark Administrative Lawsuits

Last Updated: 9 December 2016
Article by Xiaoming Liu

In China, if a party is dissatisfied with the decisions made by the Trademark Review and Adjudication Board (TRAB) on any trademark appeal or invalidation case, it is entitled to lodge a lawsuit before the Beijing IP Court. An increasing number of the plaintiffs, especially foreign legal persons, usually foreign companies, complained about the Court's stricter formality requirements in recent years. I would like to clarify the change from a professional perspective, and hopefully in a pragmatic manner.

  • Less strict formality examination policies before November 2014

Before the Beijing IP Court was set up in November 2014, all trademark lawsuits against TRAB needed to be filed with the Beijing First Intermediate People's Court. To lodge a lawsuit, a legal person plaintiff was required to file the following documents, after notarization, legalization and authorized translation, to meet the formal requirements in proof of the plaintiff's qualification to lodge the lawsuit:

  1. The original executed Power of Attorney (POA)
  2. A Certificate of Identity of Legal Representative 
  3. A copy of the plaintiff's Certificate of Incorporation

Usually, as long as the above listed documents can be notarized and legalized in the plaintiff's home country and then translated into Chinese by a few authorized or designated translation firms in Beijing, the case could pass the formality examination, without further challenge from the Court.

  • Tightened formality examination after November 2014

After the Beijing IP Court was set up in November 2014, all the trademark lawsuits against TRAB were to be exclusively lodged with the Beijing IP Court. The new Court requires the same formality documents regarding the plaintiff's qualification as in the Beijing First Intermediate People's Court, but it tightened the requirements to a large extent. In many cases, even if the above listed documents are well notarized and legalized in the plaintiff's home country, the documents, especially the "Certificate of Identity of Legal Representative" or "Certificate of Incorporation", may still be rejected

In practice, the Court's requirements can be summarized as follows concerning the above listed three documents, namely the POA, "Certificate of Identity of Legal Representative" and "Certificate of Incorporation":

  1. There are no special requirements about the natural person who signs the POA as the plaintiff's legal representative;
  1. The "Certificate of Identity of Legal Representative" should very clearly state that the natural person is the plaintiff's legal representative and is empowered to sign legal documents;
  1. It should be very clear that a natural person, usually a different natural person,  who signs the "Certificate of Identity of Legal Representative" has the authorization to sign on behalf of the plaintiff, and such authorization often originates from some statement inthe "Certificate of Incorporation". The following is a typical and good example of a clear statement regarding who can represent the company.

Statutory representation:
Under the law, the Board of Directors represents a company
Representation is based on position:
By the Chair of the Board and the Managing Director, each on their own, and by any two Board members jointly

Persons and titles/positions
... Chair of the Board
... Managing director
... Director
... Director

  1. The "Certificate of Incorporation" usually should be a copy issued by a competent governmental authority or downloaded from the governmental authority's official website. The downloading process should be conducted or witnessed by the Notary Public. And the Certificate should be one issued, updated or downloaded very recently, usually within the last 12 months, which can prove that the plaintiff exists and is in good standing at the time of lawsuit. In other words, the authenticity of "Certificate of Incorporation" should be endorsed by a governmental authority;
  1. If any of the three documents fails to satisfy the above logic, the plaintiff most likely will need to submit substitute documents. For example, if there is no clear statement in a "Certificate of Incorporation" about who can represent the company, but there is such a statement in the Articles of Incorporation or Resolution of the Board of Directors, then such Articles of Incorporation or Resolution of the Board of Directors might be acceptable as substitute or supplementary documents. However, if such Articles of Incorporation or Resolution of the Board of Directors are kept by the plaintiff itself but not previously recorded or docketed by a governmental authority, the documents might remain unacceptable due to a lack of governmental authority's endorsement about its authenticity.
  1. If there are no suitable substitute documents, it might be necessary to hold a board meeting to form a Resolution of the Board of Directors to grant written authorization to the aforesaid different natural person. In some judges' opinions, the Resolution should be formed, signed and witnessed by Notary Public, to ensure its authenticity. Alternatively, the Resolution should be firstly recorded in some governmental authority and then a copy is obtained from the governmental authority or downloaded from the authority's official website; and
  1. Some foreign parties have provided affidavits or Notary Public's personal acknowledgement, to prove that the different natural person is entitled to represent the company, but such evidence by itself usually will be regarded as insufficient to prove the different natural person's authorization. Consequently, the lawsuit shall be rejected.

From the practices mentioned above, we can see that the Court requires a complete chain of authorization. If any part of the chain is missing or not very clear, the case might be rejected. In addition, the documents obtained from or endorsed by the governmental authority are usually accepted without doubt about the authenticity.

The Court seems to want to make absolutely sure that the lawsuit is really lodged by a qualified plaintiff and the POA is really signed by a natural person who has the authorization, to avoid any mistakenly filed lawsuit.

In spite of the good intention, the consequences of such stricter formality requirements are too hard on the parties concerned.

  • The consequences of stricter formality examination

After the stricter formality requirements were adopted, it has become much more time-consuming to prepare such qualified documents. Today, the Beijing IP Court regarded as unacceptable much of the notarization done in the plaintiff's own familiar way in its home country. The plaintiff needs much more time to figure out firstly how to do the notarization in order to satisfy the stricter requirements.

As the notarization procedures vary from country to country, or even from region to region in the same country, it is not easy to tell how the notarization should be done in such a way that is acceptable to the Beijing IP Court and also in compliance with the local notarization law and practice.

  • The latest progress and some tips

The Beijing IP Court's stricter formality requirements have attracted widespread complaint. Upon receiving this information, the IP Court leaders took the complaint seriously and plan to draft some detailed guidelines to better help the foreign plaintiffs to provide acceptable documents, but the draft has not yet been published.

Before the draft is published or the strict requirements are loosened, the following tips might be helpful for passing the strict formality examination.

  1. In the countries where there is a tradition (such as Japan) or clear provision in the law that the corporation seal/stamp can represent the company, the seal on the above listed documents will be sufficient.
  1. In countries outside the scope of the preceding paragraph, the seal can still represent the company if it is so provided in the plaintiff's Article of Incorporation and a copy of seal is recorded in the relevant governmental authority.
  1. The plaintiff usually has three months to prepare and supplement qualified documents, and time extension is usually not possible. However, if the judge clearly knows that the plaintiff did its best to prepare documents but still cannot meet the deadline, then the judge may grant a time extension by using his or her discretion. Therefore, it is advisable to keep the judge informed of every effort made and any progress regarding the preparation of documents.
  1. It is more advisable to prepare and supplement documents as early as possible, rather than using up the entire three month period. This way, even if some documents are not qualified, the plaintiff still has time to re-prepare the same.

In general, the Chinese procedural laws are not detailed enough in some respect. The judges are empowered to use their discretion to accept or refuse certain documents. As a result, inconsistencies happen. We hope that the courts can standardize the formal requirements in a more predictable and consistent way, as soon as possible.

(This article was originally published in the IPPRO the Annual 2016/2017, Page 40-41)

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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Xiaoming Liu
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