China ranks first in the world for the number of trademark applications. According to statistics from the Trademark Office of the China National Intellectual Property Administration (hereinafter referred to as the Trademark Office), in 2022, the total number of trademark applications in China reached approximately 7.5 million while that of appraisal cases accepted by the Trademark Office was as high as 420,000. To prevent these cases in vast number from dragging on, the Chinese Trademark Act stipulates that no matter which type of trademark cases is, the examination thereof must be finalized either within 9 or 12 months.
Suspension of examination is allowed under Article 35.4 and Article 45.3 of the Trademark Law, Article 11.5 of the Enforcement Rules of the Trademark Law, and Rule 31 of the Trademark Review and Adjudication Rules. However, in an attempt to improve efficiency, even if there are good reasons for suspension of examination, it is not of rare occurrence that the Trademark Office continues the examination of appraisal cases by its own authority without waiting for the examination outcome of the relevant pending cases. Although such an operational practice is not unlawful, it not only deviates from the time and economic interests of the trademark applicant but also is a waste of administrative resources.
On June 13, 2023, the Trademark Office published an Interpretation on the “Regulations for Suspension of Appraisal Cases”, in which it is enumerated various reasons which can be based upon to suspend an appraisal case.
As the Interpretation will hold a pivotal position as a guideline for Examiners, it is worth summarizing it as below:
I. Types of appraisal cases subject to suspension
According to the Trademark Law and the Trademark Review and Adjudication Rules, not all appraisal cases can be suspended. To be specific, only the following three types of appraisal cases are subject to suspension:
- An appeal has been filed by the applicant against the rejection of a trademark application.
- An appeal has been filed by the applicant against a decision deeming an opposition action to be well-grounded.
- An Invalidation Action has been filed based upon the relative grounds of unregistrability of a granted mark.
II. Suspension must be based on necessity
An appraisal case can be suspended only if a prior right has a substantial impact on the outcome of the appraisal case and should be addressed a step ahead.
III. Reasons for suspension of appraisal cases
- Mandatory suspension of appraisal cases:
(1) When an applied-for mark or the cited mark undergoes a change of name or transfer, and after finalization the change of name or transfer recordal, the conflict between the two marks will no longer exist.
(2) When an application for renewal of a cited mark has been filed and is pending or the cited mark is within the 6-month grace period of renewal.
(3) When a cited mark is undergoing withdrawal or removal proceedings.
(4) When an appeal has been filed against rejection of a trademark application based on Article 50 of the Trademark Law, and is waiting for one year from the time when the cited mark is revoked, invalided, or non-renewal.
(5) When a case involving a cited mark has been rendered a Decision and is awaiting the Decision to take effect, or is waiting for the Decision to be issued in accordance with the Ruling/Judgment rendered by the Court.
(6) The involved prior right or the exclusive right to the cited mark can be addressed only based upon the outcome of another case under trial by the court or being examined by an administrative agency.
- Optional suspension of appraisal cases
(1) The trademark cited in a rejected but appealed application has been declared invalid, and in the meantime the cited mark is already determined in another case as one maliciously registered under Article 4, Article 19 or Article 44.1 of the Trademark Law.
(2) An appraisal case is waiting for a Ruling on another case under the same or similar circumstances.
(3) Other situations under which an appraisal case can be suspended.
IV. Initiating and Lifting Suspension of Examination
When any party applies for the suspension of examination of a case, it should be submitted in writing, detailing the relevant case number, procedural status, reasons, and its relationship with an appraisal case. If the reasons for suspension no longer exist, the applicant who initiated the suspension may apply to resume the examination procedure.
Previously, even though there are legal provisions and reasons for suspension of trademark cases, the Trademark Office, when actually examining an appraisal case, would usually still proceed with the examination directly even if the prior right is soon to be extinguished or the cited mark has been challenged. The announcement of the Interpretation on the “Regulations for Suspension of Appraisal Cases” will encourage the Trademark Office to implement suspension of examination procedures in a more active manner, aiming to resolve disputes in one go, without requiring the applicant to laboriously start a new application process. According to the Interpretation, when the reasons for suspension arise, the Trademark Office should mostly suspend the examination by its own authority. However, it's undeniable that the large number of appraisal cases makes it hard to expect Examiners at the Trademark Office to thoroughly check for each suspension reason. Therefore, if there are any reasons for suspension, the applicant of an appraisal case should proactively provide relevant information and evidence to apply for suspension. This can save expenses and help enhance administrative efficiency.