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Comments on Article 41 of the Current China Trademark Law
Nancy GENG
Trademark Department Linda Liu & Partners
Article 41 of the current China Trademark Law defines the cancellation of improper registrations of the trademark, disputes and responses thereof. This article consists of four sections, the former three of which relate to the filing of dispute applications and the last section relates to the response thereof. It reads as follows:
Article 41
Where a registered trademark stands in violation of the provisions of Articles 10, 11 and 12 of this Law, or the registration of a trademark was acquired by fraud or any other unfair means, the Trademark Office shall cancel the registered trademark in question; and any other organization or individual may request the Trademark Review and Adjudication Board to make an adjudication to cancel such a registered trademark.
Where a registered trademark stands in violation of the provisions of Articles l3, l5, l6 and 3l of this Law, any other trademark owner concerned or interested party may, within five years from the date of the registration of the trademark, file a request with the Trademark Review and Adjudication Board for adjudication to cancel the registered trademark. Where a well-known mark is registered in bad faith, the genuine owner thereof shall not be restricted by the five-year limitation.
In addition to those cases as provided for in the preceding two paragraphs, any person disputing a registered trademark may, within five years from the date of approval of the trademark registration, apply to the Trademark Review and Adjudication Board for adjudication.
The Trademark Review and Adjudication Board shall, after receipt of the application for adjudication, notify the interested parties and request them to respond with arguments within a specified period.
The above Article 41 mainly regulates the necessary conditions and the related procedures for filing a request to cancel the registered trademark and respond the request by the trademark holder. It is likely that the abundant and ambiguous context of the article sometimes makes us misunderstood the article in applying it to the actual case.
In this paper the following several items will be briefly discussed except the case that China Trademark Office voluntarily cancel the registered trademark, because it is regarded as a kind of relief measure for the office himself.
Ⅰ.Types of Disputes
According to Article 41 of China Trademark Law，the adjudication cases must be filed before the Trademark Review and Adjudication Board (hereinafter referred to as TRAB) to cancel the registered trademark. Generally the adjudication cases are divided into two types.
The first type of adjudication refers to improper and unfair registration cases, so called “major disputes”, which stand in violation of the prohibitive articles of Trademark Law or the principles of honesty and credit of Civil Law. In this type, the request of adjudication is filed to TRAB according to the first or second section of Article 41 of Trademark Law.
Another type of adjudication refers to so called “minor disputes” cases. In the type, according to the third section of Article 41, the request of adjudication is filed to TRAB on the basis of comparative reasons that the registrant of the prior registered mark believes that the latter registered trademark is identical with or similar to his prior registered trademark in respect of identical or similar goods.
Ⅱ.The Qualification of the demandant and Time Limit in the adjudication
The former three sections not only clarify the clear distinction between the types of the adjudication but also regulate the qualification of the demandant and time limit for filing the request of the cancellation under different circumstances.
Firstly, the applicant who can file the dispute based on the section 1 of the article could be any entities or persons. Further it is noted that the dispute can be filed without time limit. The application of canceling the trademarks in violation of the prohibitive articles is filed in order to protect interests of the public. Thus there is no restriction with respect to the applicants and the time limit. On the other hand, the applicants who can file the disputes based on the section 2 shall be the trademark owners or the interested parties It means that the applicant owns certain prior rights of the disputed trademark or the other party may violate the principles of honesty and credit in registering the disputed trademark. As for this type of adjudication, the time limit is five years counting from the date of the registration of the trademark. However, the owner of a well-known trademark can file the disputes to the preemptive Party anytime because the owner is not subject to the limitation of the five years owing to the special clause to the well-known trademark. In practice, the applicant has to prove that his own trademark is well-known in case that he claims that others’ registered trademark infringes his prior rights while he has no prior trademark rights in China. In case of the disputes filed based on the section 3 of article 41, the applicant has to prove that others’ trademark is identical with or similar to his prior applied or registered trademark in respect of identical or similar goods. Further, the application has to be filed within five years from the registration date of the disputed trademark as stipulated in section 3 of Article 41.
Ⅲ. Analysis on the “Major Disputes” Clause
The Article 41 generally regulates not only the qualification of the demandant and the time limit for filing applications for adjudication, but also presents the substantive legal basis on which the applications may be filed. Section 1 covers three substantive articles, namely Articles 10, 11 and 12. Article 10 prohibits the use and registration of trademarks which contain the name of country, national flag and national emblem, and those detrimental to socialist morals or customs, or having other unwholesome influences as well as geographical names; Article 11 prohibits registration of marks which bear only indistinctive features such as generic terms, etc.; Article 12 prohibits registration of a three dimensional signs.
Section 2 of the Article 41 covers four substantive articles, namely Article 13 protecting well-known trademarks, Article 15 prohibiting un-authorized registration of a trademark by agents or representatives without the true owner’s permission, Article 16 protecting geographic indications and Article 31 protecting the other prior rights and prohibiting the preemptive registration out of bad faith.
Once a trademark registration stands in violation of any of the above mentioned substantive articles, the related right owner may file an application for adjudication to cancel the registration before TRAB on the basis of improper registration.
Article 41 is a remedy article dealing with those registered trademarks which should not have been approved for registration.
“Fraud means” in Section 1 of the Article 41 mainly refer to acts that the disputed party acquired the registration of a trademark by fabricating or hiding facts and filing faked application documents or other faked evidencing documents. “Other unfair means” refer to acts that except for the situations set forth in Articles 13, 15 and 31, there are sufficient evidence proving that the disputed party had designed and applied for registration of the disputed mark by imitating, translating, copying and plagiarizing other’s prior used mark which he knows or should have known with the purpose to seek illegal interests in unfair competition. These acts stand in violation of the principles of “honesty and credit” principle of Civil Law and Anti-unfair Competition Law. It could be decided by considering the following factors in judging whether the disputed party filed cases out of bad will.
1.There are business or cooperative relationship between the disputer and the disputed party.
2.The disputer locates at the same regions or shares the same marketing channels and distributing areas with the disputed party.
3.There are other disputes related to the disputed mark between the disputer and the disputed party.
4.There are personnel exchange and communication between the involved parties.
5.The disputed party once intimidated the other party to do business with him, extorted unreasonable assignment fee or royalty for granting license or claimed infringement damages in order to seek illegal interests after the disputed mark had been registered.
6.The disputer’s trademark enjoys strong distinctiveness and creativity.
7.Other circumstances that can prove the disputed party knows or should have known the disputer’s trademark.
From the above, we can say that “other unfair means” is provided with a nature of general provision. Only if one can prove that the holder of the disputed trademark breaches the principle of honesty and credit knowing the existence of the disputer’s mark, he can file an adjudication and request TRAB to cancel the registration of the disputed mark. This point is fully explained and shown in the administrative judgment (No.1016, 2007) on “Dispute case on WANGZI OJI & DEVICE” (Reg. No. 840299) by Beijing First Intermediate People's Court (the plaintiff: Oji Paper Co., Ltd.; the defendant: TRAB; the third party: Xiamen Xinshengjie Corporation Ltd.).
Ⅳ. Whether the Article 41 of Trademark Law is Applicable to Trademark Opposition Cases
The Article 41 is to resolve the dispute in terms of “registered trademarks”. Now the question is whether the substantive contents of this article are applicable to trademark opposition cases. Beijing First Intermediate People's Court ruled in the case of “The Gap vs. The Gap” (Administrative judgment No.178, 2006) that, “this article is literally related to the registered trademarks, but we should totally consider it from the purpose and intention of the legislation. The purpose of the legislation of Article 41 is to prohibit registrations based on the bad faith in accordance with the principles of honesty and credit, and thereby to keep the market order. This principle should be consistently applied in the whole procedures of examination, registration, opposition and dispute. Therefore, in case that Trademark Office or TRAB find out that the applicant try to register the trademark by fraud or any other unfair means, they may reject the application for registration based on this article. It is not necessary to cancel the trademark by way of the dispute procedure after the registration thereof. In addition, Article 10, 11 and 12 regulate a kind of signs and indications that are not allowed for use and registration as a trademark. While, there is no other article which lists or explains such acts as to “be registered by fraud or other unfair means” corresponding to those set forth in section 1 of Article 41. Furthermore, it is noted that the improper conducts for registering the trademark by unfair means, which are regulated in other articles, cannot identify all the circumstances of such registrations by unfair means. Therefore, it is understood as a procedural provision that the section 1 of Article 41 is entitling other entities or persons with certain right for requesting TRAB to cancel the improper registration. At the same time, it is construed as a substantial provision that it stipulates a general principle for prohibiting the improper conducts for registering the trademark by “fraud or any other unfair means”. Accordingly, Article 41 is applicable in adjudicating both trademark opposition and cancellation trial in the Trademark Review and Adjudication Board. As explained above, in the light of the substantive and procedural provisions thereof, it is apparent that the Article 41 of Trademark Law is applicable in trademark opposition examination.
Here, the authors tried to explain the Article 41 of the current Trademark Law in the concise and clear manner, since the article is practically of great significance in terms of the interpretation of the article, the scope of application and the time limit for filing the relevant applications, etc. In order to protect the legal right of our clients, we should fully understand the spirit of the law in all aspects and apply appropriate articles according to various situations of the cases. Finally, we will utilize every legislative articles and claim the legal right as widely as we can, so that we may better serve our clients and strive for a better result for the clients.
September 8, 2008
Reference:
1.China Trademark Law
2.Regulations for the Implementation of China Trademark Law
3.The Interpretation of China Trademark Law
4.Guide to Trademark Practice
5.Trademark Examination Criteria
6.Administrative Judgment (2007) No. 1016 by Beijing First Intermediate People's Court
7.Administrative Judgment (2006) No. 178 by Beijing First Intermediate People's Court
8.Prohibition of Improper Registration Is a General Applicable Principle
Translated by Pei ZOU & Min YAO
Proofread by Xiaoqing WANG
