Recently, in a cancellation proceeding represented by the author, we alleged that the registration of the disputed trademark violated the provisions of Article 19 of the China Trademark Law, "a trademark agency shall not apply for registration of other marks than those necessary for its agent service", and fell within the illegal behaviors of "...obtaining registration by other improper manners" as provided in the first paragraph of Article 44 of the China Trademark Law. The China National Intellectual Property Administration (hereinafter referred to as "the CNIPA") supported the cause under the first paragraph of Article 44 in its decision, declaring the disputed trademark being canceled, but did not support the cause under Article 19. In this situation, it is natural for the owner of the disputed mark to initiate an administrative action in the hope of overturning the cancellation decision. However, as the prevailing party, we still filed a separate administrative action against the seemingly favorable decision requesting for denial of the wrong determination with respect to Article 19 of the Trademark Law. The question arises: is it necessary for the prevailing party to appeal for the cause(s) that was not supported?
It can be attributed to the specific nature of the trademark prosecution, opposition, or cancellation litigation. These types of litigation cases usually take the CNIPA as the defendant because of dissatisfaction with the decisions made by the CNIPA. Under the current legal framework, they are classified as administrative litigation. Article 87 of the Administrative Procedure Law of the People's Republic of China stipulates that the people's court shall conduct a comprehensive review of the litigation case being appealed, reviewing all the causes raised in the verdict of the previous instance. This is called the Principle of Comprehensive Review in administrative litigation. However, the trademark opposition or cancellation litigation is more kind of disputes between the civil parties while the CNIPA's role is approximating a judicial adjudicator rather than an administrative authority. Therefore, this type of litigation is not utterly administrative. Considering the private nature of the trademark rights, the people's court usually limits its review to the plaintiff's claims in accordance with the Civil Procedure Law for heightened judicial efficiency. The second article of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Litigation Involving Trademark Prosecution, Opposition, or Cancellation, which came into effect on March 1, 2017, provided, "the people's court shall, in principle, limit its review to the plaintiff's claims and grounds when it reviews a trademark prosecution, opposition or cancellation litigation. If the CNIPA's decision involves any material mistaken findings or holdings other than what the plaintiff contests, the people's court may adjudicate on those after hearing all the parties' arguments." According to this judicial interpretation, when the court is reviewing a trademark prosecution, opposition, or cancellation dispute, it is subject to the principle of "no trial without complaint". The exception is that when there is any obviously untenable finding in the administrative decision, the court may adjudicate on the issues out of the plaintiff's claims after fulfilling the hearing procedure.
Back to the litigation at issue, although we prevailed in the administrative proceeding, we were not satisfied with the determination on Article 19 of the Trademark Law. If we did not file an action against the decision but merely participated as the third party in the administrative lawsuit filed by the opponent against the first paragraph of Article 44 of the Trademark Law, the court would have likely limited its review to the plaintiff's pleading on the first paragraph of Article 44 and refused to recall the issue related to Article 19. We had experienced the similar situation in the other case before where the judge asked us to contest what we were dissatisfied with in the administrative decision by launching a lawsuit separately. It can be further speculated that once the first instance court supported the opponent's pleading and reversed the decision restoring the validity of the disputed trademark, is it still possible for us to appeal Article 19 to the second instance court? According to the Administrative Procedure Law, when the appeal court hears an appeal case, it only conducts a comprehensive review of the trial court's verdict. Without involving Article 19 in the first instance judgment, we would have little chance to reclaim that in the second instance. How can this dilemma be resolved? A plausible advice is that the third party should assert its dissatisfaction with any findings of the decision at least in its brief in the first instance, showing it does not forfeit its right to appeal. This might save the possibility of reclaiming what the plaintiff did not contest in the second instance. But this approach seems lack of a solid legal basis, resulting in uncertainty. In the litigation at issue, we were able to accept anything but failing the cancellation. To diminish the risk to the lowest extent, we decided to take an unusual approach, that is, filing an action against the unsupported ground despite a favorable conclusion of the cancellation. We believed that the cause under Article 19 was more justified than the first paragraph of Article 44 in this case.
As such, the first instance court received two complaints from both parties against the same cancellation decision. One party asserted to negate the determination on Article 19 while affirming the determination on the first paragraph of Article 44, whereas the other party held the opposite, though both claiming to revoke the decision. So how should the court make a judgment? Finally, the court dismissed the trademark owner's complaint by finding the decision tenable on the first paragraph of Article 44. As for the lawsuit we filed as the requesting party of the cancellation, the court concluded that the disputed trademark fell under the circumstances as defined in the fourth paragraph of Article 19, and the defendant, the CNIPA, had made a wrong finding at this issue that needed to be vacated. At the same time, it affirmed the CNIPA's holding regarding the first paragraph of Article 44. On such a basis, the court ruled, "part of the findings of the decision is unjustified and should be overruled. The plaintiff's pleadings are affirmatively established. But in view of the disputed mark being declared canceled appropriately, the sued decision is ratified while pointing out its mistakes in order to avoid waste of administrative and judicial resources and settle the dispute sooner." In the end, the court also dismissed our complaint and burdened us with the litigation cost. We achieved our goal of prevailing on two grounds though we appeared to have failed the suit.
To the end, due to the specific nature of the administrative litigation involving trademark prosecution, opposition, or cancellation, they are influenced by both the principle of no trial without complaint as outlined by the Civil Procedure Law and the principle of comprehensive review as outlined by the Administrative Procedure Law. For those where the outcome must be guaranteed, we suggest appealing the adverse determinations or findings to assure a judicial review. In terms of legislation, we suggest permitting the third party to make counterclaims on the dissatisfied parts of the decision for the court's review instead of resorting to a separate action, as a result reducing unnecessary parallel litigation suits.
This article was first published in the 2025 Annual of The Trademark Lawyer.
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