Overcoming trademark refusal in China

By Nick Ji, Corner Stone & Partners
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With the continual increase of trademark applications, the total number in China has exceeded 30 million. In view of the huge volume of prior applications and registrations, new trademark applications are facing an increasingly higher risk of being held similar to prior trademarks, and greater difficulties in obtaining registration.

Trademark
Nick Ji
Partner
Corner Stone & Partners

A co-existence agreement signed with – or a letter of consent singed by – the owner of the prior conflicting trademark is a common and effective means to overcome trademark refusal. In current practice, although co-existence agreements and letters of consent still cannot play a decisive role in overcoming trademark refusals, China’s trademark examiners and judges are holding a more open attitude toward such documents, and over half of both the agreements or letters will be accepted, enabling trademarks to be granted registration.

Whether a co-existence agreement or letter of consent will be accepted is subject to such factors as the degree of similarity between the two trademarks, the respective business fields and customer groups, as well as the status quo of co-existence in the market. The reason for the authorities’ practice is that, despite the trademark right’s nature of a private right, the interests of consumers still need to be taken into account. Thus, co-existence of two trademarks, if likely to give rise to consumer confusion, will be considered detrimental to consumer interests and will be rejected. Otherwise, a co-existence will be deemed acceptable.

Submitting co-existence agreements

  • A co-existence agreement signed with an entity outside of the jurisdiction of China needs to be notarized and legalized;
  • If a co-existence agreement specifies the geographical scope of co-existence, mainland China must be explicitly included;
  • The co-existence agreement must specify the cited trademark and the trademark applied for;
  • Despite the absence of strict time limits for filing a co-existence agreement, it is advisable for the trademark applicant to submit the document as early as possible, since the timeframe for the Intellectual Property Office and the court to review a trademark refusal case is being constantly shortened.

Possibility of overcoming refusals with co-existence agreements. For better illustration of circumstances under which trademarks are allowed to co-exist in the current examination practice, the following are several cases in which co-existence agreements are signed in a bid to overcome trademark refusals:

Case A (successful).

Description: The trademark application for “COOLPRO” was refused by citing a prior trademark “CODIPRO”.

(1) The designated goods of the two trademarks, though all belonging to machinery equipment, fall under different categories.

(2) The two trademarks can be distinguished from each other to some extent in overall visual effects and pronunciations.

(3) The co-existence agreement and letter of consent in this case are the genuine expression of the cited trademark owner’s intention. The refused mark and the cited mark differ to some extent in terms of representations and designated goods. Hence, in absence of evidence proving that the co-existence agreement reached between the plaintiff and the cited mark owner will cause damage to the public interest, the cited trademark should no longer pose an obstacle against the refused mark.

Case B (successful)

Description: The trademark application for “AIRBORNE” was refused by citing a prior trademark “AIRBORNE HONEY & device”.

(1) The refused trademark and the cited trademark are distinguishable to a certain degree in overall visual effects.

(2) The co-existence agreement records the genuine expression of intention made by the cited trademark owner and represents the prior trademark owner’s free disposal of its right. In absence of evidence showing that the co-existence agreement would do harm to the interests of consumers, and in the circumstance that the two marks are distinguishable to a certain extent, this court accepts the co-existence agreement.

Case C (failed)

Description: The trademark application for “SmartWing” (stylized) was refused by citing a prior trademark “SmartWing” (standard font).

(1) The refused trademark and the cited trademark share identical component English letters and thus constitute similar trademark representations.

(2) The refused trademark, with its representation highly similar to that of the cited mark, and its designated goods the same as or similar to those of the cited mark, is likely to cause confusion and misidentification among the relevant public as to the source of goods concerned. Although the letter of consent has solved the conflict of civil rights and interests between the two particular entities of the refused mark applicant and the cited mark owner with respect to trademark registration and exercise of rights, the system of trademark approval and registration per se still operates to safeguard public order and the public’s interests. Under the circumstance that the possibility of confusion and misidentification by the relevant public concerning the source of goods cannot be ruled out, the application for registration of the refused trademark still fails to comply with relevant provisions of the Trademark Law.

Conclusion

Under current practice, a co-existence agreement generally will be disregarded if the trademark applied for is identical with the cited trademark, but will stand a chance of acceptance if the two trademarks are distinguishable to some extent. It is advisable for the trademark applicant to actively seek a co-existence agreement with the cited trademark owner so as to overcome the refusal. Moreover, since the court usually holds a more open attitude towards this issue, it is still worth trying to lodge a suit at the court even if a co-existence agreement/letter of consent is turned down in a trademark review case against refusal at the Intellectual Property Office.

Nick Ji is a partner and trademark & patent attorney at Corner Stone & Partners

trademark law

Corner Stone & Partners
1905, Tower B, Tian Yuan Gang Centre,
No. 2 Dongsanhuan North Road, Chaoyang District,
Beijing 100027, China
Website: www.cornerstoneip.com.cn

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