About half of the trademark registration applications are refused annually by the China National Intellectual Property Administration (CNIPA). In its 2022 report, the CNIPA informed that only 52% of the trademark applications passed preliminary examination, whereas 14.4% were partially rejected and 33.6% were totally refused.
The number of trademark applications and registrations in China is more than tenfold larger than in any other major jurisdiction, including the United States and the European Union.
While the strong performance in filing activity should be celebrated, new applications are facing increased risk of refusal due to similar prior trademarks in the first-to-file Chinese system. On top of that, the CNIPA has rigorous standards regarding a trademark’s registrability based on its legality and distinctiveness.
Relative grounds of rejection, due to the existence of a prior similar trademark over similar goods or services, is one of the most common reasons for rejection of a trademark registration application.
Similar trademarks
With millions of active trademark registrations in place, it is not uncommon for an aspiring brand
owner to find an identical or similar prior trademark filed by another applicant coincidently, or by a hoarder or a squatter in bad faith.
There are actions to take pursuant to laws and regulations trying to strike a balance between the first-to-file principle and the rights and interests in and to prior unregistered trademarks. As China has been taking a harder line on bad faith filing and registration, any person now has the right to try to oppose or cancel these trademarks.
If a specific unregistered trademark is cited, its prior use and reputation (mainly in China) will have to be established to fight against an identical or similar registration, which requires substantial evidence to prove that the unregistered trademark has become well known or at least influential to a certain extent among the relevant public before the confusing registration was filed.
It is important to be the first to file; however, if unfortunately, a company is not, it is critical to seek other ways to register, such as through copyright and preserving evidence of use for possible actions.
Ways to overcome refusal
Comparing similarities between the cited and the applied brands is the first step. There are different ways to solve this depending on the degree of likeness.
Not very similar:
Some aspects of both marks are similar, but there are other distinctive parts that can help distinguish them. The CNIPA examines the device, English and Chinese parts separately. In general, it is possible to argue that both marks have enough disparities to tell them apart.
Very similar:
This situation is more common. If the success rate is low by only arguing trademark dissimilarity, it should be considered whether the obstacles posed by the prior marks can be removed or not. There are certain options depending on the specific situation of the trademarks:
Coexistence agreement: prior trademarks' owners issue coexistence agreements allowing both trademarks to coexist. It is more feasible among entities outside of China while it is not widely accepted by Chinese owners. From 2021, the CNIPA tends not to accept coexistence agreements, on the grounds that such an agreement between owners may confuse or mislead consumers in the market. For this reason, seeking a coexistence agreement is not a recommended step.
Non-use cancellation: this is a relatively effective way for removing obstacles of cited marks. China Trademark Law gives anyone the right to file a cancellation against a trademark that has not been used for three consecutive years. The applicant only needs to file the application. The burden of providing evidence of use goes to the trademark registrant. In 2021, the CNIPA issued the new policy of "suspension of examination of review cases," improving substantive fairness and saving unnecessary time and money to applicants.
Invalidation: filing an invalidation against a cited trademark which has been approved for registration is also a measure, but it often occurs in cases where the cited mark is maliciously registered against the applied trademark. The cost of invalidation is relatively high, the requirement of evidence is a lot, and the success rate mainly depends on the sufficiency of the evidence. The examination period of an invalidation is also long but given the implementation of the "suspension of examination of review cases" policy, the examination period is not an issue anymore. This step should be taken when there is a good chance of invalidating the cited trademark.
Trademark assignment: the cost of purchasing a trademark can be high, while the negotiation and recording process may be long. If the cited mark is not used and the price is acceptable, this could be a possible option.
Besides the situations already mentioned, discrepancies in the names and addresses of the applicant may also lead to rejection. Unifying the names and addresses can resolve this problem.
Based on the Chinese trademark law, qualified elements for trademark registration are, any visual symbols able to identify the products and services of a legal person or company from others within the market. These symbols include words, letters, figures and digits, 3D signs, color combinations, or the combination of these elements.
According to the provisions of the China Trademark Law, once the application has been rejected, an applicant may appeal for re-examination from the Trademark Review and Adjudication Board (TRAB).
Re-examination can be requested within 15 days of receiving the Notice of Rejection. It will take a period of 18 – 24 months from the date of
application for the re-examination. The trademark law stipulates that foreign enterprises must delegate a Chinese agency or agent to handle registration for a trademark in China.
The Chinese trademark law system which protects registered trademarks is managed by the China Trademark Office (CTMO) under the administration of TRAB, which are branches of the State Administration for Industry & Commerce (SAIC).
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.
Talk to an expert
Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you.
Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia. In this free discovery call we will discuss your Greater China strategy, business plan, market entry and growth. Topics we can advise on include:
Business Advisory
Trademark Registration
Employer-of-Record
Company Formation
Ongoing Administration Services
Operational Compliance
Human Resource and Recruitment
or any other business-related questions.
Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request.
Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST (for those based in the Americas).