One of the key amendments to the Third Revision of China’s Trademark Law (the Revised Trademark Law) is that, for the first time, time limits have been prescribed for the examination and review of cases by the China Trade Mark Office (CTMO) and the Trade Mark Review and Adjudication Board (TRAB). For both brand owners and trade mark practitioners, however, the new time limits may prove to be something of a mixed blessing.

Be Careful What You Wish For

For years, brand owners and practitioners have complained bitterly about the inordinately long time it has taken the CTMO and TRAB to examine and review cases. The lengthy delays have made it difficult for brand owners to obtain rights in a timely fashion and to enforce the rights once obtained. Just five years ago, a straightforward trade mark application took around two years to proceed to registration; and if an appeal was necessary, that period could extend to four to five years. Similarly, an opposition at the CTMO took two to three years to be decided; and in the event of an appeal to the TRAB could take a further four years before a decision was rendered. Then, of course, there could be appeals to the Beijing Intermediate and Higher People’s Courts.

In recent years there have been gradual reductions in these periods, which is no easy feat, given that in 2013 alone, 1.9 million trade mark applications were filed, and at least 36,000 oppositions were pending at the CTMO. During the same period, TRAB reviewed approx. 108,000 appeals against application refusals, and approximately 36,000 opposition appeals.

Central to the Chinese Government’s desire for a knowledge-based economy is an efficient and effective IP system: this, it seems, is the impetus for the introduction of these new time limits. While the changes are likely to lead to significant improvements in the system, they are, however, also likely to place considerable pressure on trade mark authorities, and on trade mark owners themselves.

For the CTMO and TRAB to conclude their examinations and reviews within the new statutory time limits, the period granted to applicants will similarly have to be reduced. The draft Implementing Regulations shorten the time limit for the filing of supplementary evidence and detailed arguments from the current three months to a mere 30 days. Extensive lobbying is being undertaken to retain the three month period, but, given that the new CTMO and TRAB limits seem to have been set in stone, it is unlikely to be successful. One ray of hope is that in circumstances where further evidence becomes available only after the deadline, or where good reason can be shown for the submission of additional evidence, the CTMO and TRAB have a discretion to accept such evidence even where the deadline has passed. The uncertainty as to how the CTMO and TRAB will exercise their discretion remains, however, a cause for concern.

Lobbying is also being undertaken for suspension of the examination or review where the parties are negotiating co-existence, or where the case is pending the outcome of a non-use cancellation or other action against a prior mark before the trade mark authorities. Unfortunately, the State Legislative Council appears reluctant to introduce additional circumstances in which a suspension can be requested.

Introduction Of The Time Limits

Basically, the Revised Trademark Law introduces two time limits, nine and twelve months, and two extension periods, three and six months. All extensions must be approved by the State Administration of Industry and Commerce (SAIC), and only the Examiner, not the applicant, can request an extension. The nine month examination period for an initial application, however, cannot be extended.

Category	Type of Proceeding	CTMO/TRAB	Examination Time Limits (months)	Period of Extension (if extension granted)
Application	Initial examination of trade mark application	CTMO	9	N/A
	Examination of appeal against refusal of a trade mark application	TRAB	9	3
Opposition	Examination of an opposition	CTMO	12	6
	Examination of an appeal against  opposition decision	TRAB	12	6
Invalidation	Examination of invalidation application (based on absolute grounds) filed by any party	TRAB	9	3
	Examination of an appeal from invalidation decision (based on absolute grounds) on the initiative of the CTMO	TRAB	9	3
	Examination of an invalidation application (based on relative grounds) filed by the owner of a prior right or an interested party	TRAB	12	6
Cancellation	Examination of application for cancellation (on ground that the mark  has become generic or has not been used for a period of three consecutive years)	CTMO	9	3
	Review of decision in a cancellation application (on  ground that  a mark  has become generic or has not been used for  three consecutive years)	TRAB	9	3

In certain circumstances, the time limits referred to above will not be applied e.g. Article 35 of the Revised Trademark Law allows the TRAB to suspend its review if the prior rights involved will be able to be ascertained only on determination of a case that is pending at a People’s Court, or being handled by an administrative organ.

Supplementary Clauses on Time Limits

The draft Implementing Regulations set out certain periods that shall not be included in the time limits for trade mark examinations or reviews:

1) the period in which the CTMO or the TRAB is serving a document via public announcement;

2) the period for any party to submit supplementary descriptions of related documents or papers, and the period for carrying out further exchange of evidence;

3) the period to apply for the submission of evidence of use and lot drawing, taking place on the same day;

4) the period of re-notifying the respondent due to changes of any party;

5) the period awaiting the result of a case involving the determination of existing prior rights during a trade mark review or hearing; and

6) the period awaiting the settlement of the case on the basis of the applications of both parties.

Is Faster Always Better?

The introduction of these new time limits represents a vast improvement on the current practice. Brand owners will be able to obtain trade mark rights more quickly, which is necessary for the effective commercialisation of their brands. Also, a degree of certainty has been introduced into the system, as the trade mark rights of parties will be able to be ascertained within a reasonable time. The one overwhelming concern is whether the concentration on quantitative performance targets will have a negative effect on the quality of decisions – an effective legal system must not only be efficient, it must also be seen to be just.

The tight new time limits will impose a strain on the trade mark authorities. The CTMO and TRAB have had to gear up by hiring hundreds of inexperienced Examiners. Naturally, this will result in cases being examined in a text book manner by relatively inexperienced Examiners, which is likely to lead to greater inconsistency in decisions. Also, with huge pressure to meet their quota each day, there will be little time for Examiners to review thoroughly the evidence submitted or consider in detail the merits of the case. If the end result is ‘examination by numbers’, brand owners and practitioners will gradually lose confidence in the trade mark system.

Tick-Tock, Tick-Tock

Brand owners will have to get their houses in order, to avoid falling foul of the new time limits. In particular, foreign brand owners will need to devote extra time, resources, and attention to their trade mark rights in China.

To ease the anticipated time pressures caused by the new time limits, brand owners and foreign counsel are advised to put in place the following measures:

o prioritise office actions issued by the CTMO and TRAB – you only have 15 days to appeal a refusal and 30 days to supplement the appeal;

o put in place an effective watching service and, where a conflicting mark is spotted, take appropriate action during the three month publication period: either endeavouring to resolve the dispute through negotiation, or collating evidence of use to support an opposition – bearing in mind that opponents have lost the right to appeal an unfavourable opposition;

o once use of a mark commences in China, start collecting appropriate evidence of use, including in relevant promotional material;

o create and maintain a library of evidence for each of the marks you will want to enforce. Ensure the evidence has been translated into Chinese;

o draft and update an outline of arguments for each of marks you will want to enforce, which can then be tailored for individual cases.

Foreign brand owners, foreign practitioners, be alerted - forget the luxury of six months or more to respond to an office action. We are China, we do things fast, keep up or get left behind!

And last, but not least, spare a thought for your long suffering Chinese counsel.