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As the COVID-19 pandemic continues to spread, “quarantine” has become a term that is used very frequently in everyday life. In fact, there is also “quarantine” in the field of trademarks. Article 50 of the Trademark Law of the People’s Republic of China provides as follows:
Where a registered trademark has been cancelled, invalidated or has not been renewed upon expiry of the period of validity, the Trademark Office shall, during one year from the date of cancellation, invalidation or removal, reject any application for registration of a trademark that is identical with or similar to the trademark.
The legislative purpose of the one-year “quarantine” period is “mainly to maintain the market order, protect the interests of consumers, and prevent consumers from confusing the source of goods”. In practice, Article 50 of the Trademark Law is mainly applied by the China National Intellectual Property Administration (“CNIPA”) as a basis of refusal in the examination and review of trademark registration applications.
The exception to the “quarantined” trademark includes that when a prior trademark is cancelled on the basis of non-use, it has ceased to have any impact on the market because it has been out of production and sale for three years. Thus, such trademark is not the subject prescribed in Article 50 of the Trademark Law.
Besides the above, are there any other circumstances that could be classified as exceptions to Article 50 of the Trademark Law? How is it applied in practice?
In recent years, the phenomenon of malicious trademark squatting and hoarding registration has occurred frequently, and the CNIPA has severely cracked down on malicious registration through various measures such as taking the initiative to reject such applications and strictly examining opposition and invalidation cases, and has achieved good results.
When another party’s subsequent trademark application is identical with or similar to such a trademark that has been invalidated due to bad faith squatting, etc., is it still necessary to set a one-year “quarantine period” to reject such application pursuant to Article 50? The Trademark Examination and Review Guidelines did not include “trademarks that have been invalidated due to hoarding or bad faith squatting” as an exception to the one-year quarantine period prescribed in Article 50.
However, the author’s search has revealed that if the main cited prior trademark is the case of “bad faith squatting or hoarding registration” and has been invalidated, the one-year quarantine period is usually not applied for such trademark application in the refusal appeal cases so as to help the real right owner obtain the trademark registration as soon as possible.
However, in practice, the circumstance is often more complicated, and there are many cases where the applicant for refusal appeal is not the same applicant as that of the invalidation action against the cited trademark. In addition, when there are multiple cited trademarks, one or more of which are the above cases and have been invalidated, even if they are treated as an exception to the one-year quarantine period, the trademark application may still be rejected in the refusal appeal due to the reason that the remaining registration obstacles cannot be overcome.
Furthermore, to determine whether a cited trademark is a “trademark invalidated due to hoarding or bad faith squatting”, it is necessary to study the invalidation decision carefully, which will undoubtedly bring an additional burden to the review of refusal appeals.
The author speculates that the reason why the “trademark that has been invalidated due to hoarding or bad faith squatting” is not included in the Trademark Examination and Review Guidelines as an exception to the one-year quarantine period in Article 50 may be a comprehensive consideration of the above circumstances. However, in view that it is not included in the review guidelines, it means that there is a more flexibility in practice, and the examiner may achieve substantive justice by suspending the review of refusal appeals. The author hopes that the review of refusal appeals will be more rational, and it will be more conducive to the real right owner to obtain the exclusive trademark right at the earliest opportunity.