By Zhou Xiaoli, Sun Huanhuan, King & Wood Mallesons’ Intellectual Property group

1. CNIPA Launched Normalization Mode for Oral Hearing

The newly built Trademark Review Tribunal was officially put into use in the China Trademark Building this March, marking the official opening of the “offline + online” working mode for the regularization of “oral hearing” of trademark review. On the day of the hearing, the Trademark Review and Adjudication Division VII conducted online oral hearings on two cases of “DaFu Feiyue and Device” (“大孚DaFu Feiyue及图”) opposition review case and “JuFengYuan” (“聚豊園”) invalidation case.

The two cases heard this time were both on the issue of the attribution of the rights of well-known trademarks and China’s traditional mark in the restructuring of state-owned enterprises. The disputed trademarks are highly well-known, with great value of goodwill and social influence.  After years of use and multiple transfers, the legal relations are very complex. On the basis of in-depth analysis and study of the case, the panel clarified the focus of the dispute, listened carefully to the elaboration of the parties, fully questioned and organized cross-examination around the key issues, and thoroughly identified the history, creativity and use of the relevant trademarks, laying a good foundation for better adjudication, fully protecting the legitimate rights and interests of the parties, and effectively settling the disputes. The online oral hearing broke the restriction of geographical space, which didn’t only overcome the adverse impact of the current epidemic situation, but also greatly saved the cost of the parties to defend their rights and improved the efficiency of the hearing, which was highly recognized and welcomed by the parties.

On 4 May 2017, the former State Administration for Industry and Commerce formulated the <Measures for Oral Hearing of Trademark Evaluation Cases>. The first oral heard case was on 21 August 2017 on the refusal review case of “高麗紅蔘” (“Ginseng”). In recent years, CNIPA has vigorously promoted the openness of trademark review, actively implemented oral hearings and the construction of circuit courts outside Beijing, actively accepted social supervision, and fully protected the legitimate rights and interests of the parties. The oral hearing of some cases with large disputes and complex legal relations helps the examiners to identify the facts of the cases more accurately, further improve the correctness of the administrative decisions, and strongly protect the legitimate rights and interests of the parties. In September 2019, the CNIPA started circuit adjudication court and held oral hearings in the city of Shanghai, Yiwu and Nanjing successively for review complex cases. On 22 September 2020, CNIPA inaugurated the first trademark adjudication circuit court at the Shanghai Trademark Examination and Collaboration Center.

2. Administrative Provisions on the Registration of Business Names (Revision 2020) has come into force since March 1, 2021: “Copycats” and other infringements will have regulatory basis

The newly revised Administrative Provisions on the Registration of Business Names (the “Regulation”) has come into force since March 1, 2021. It is the first comprehensive revision of its implementation in nearly 30 years. The “Regulation” strengthens the Interim supervision and Ex post supervision on enterprise name registration, specifies that where an enterprise considers that there are ”copycats” or other activities infringing its legitimate rights, it may file a request before the business registration authorities or file a lawsuit before a people’s court. Meanwhile, the prohibition adds “or may have other adverse effects “, which means that business registration authorities have the right to request an enterprise to correct the adverse impact due to its name in recent years.

The Regulation, with total number of 26 Articles, includes the main content that: 1) establishing the independent declaration system of the enterprise name, specifying the responsibility of business registration authority and the request on the independent declaration of enterprise names.; 2) improving the basic norms of enterprise names; 3) setting up the enterprise name dispute handling mechanism; 4) strengthening the Interim supervision and Ex post supervision. Among them, for the difficulty on the enforcement of an enterprise trade name which is identical or similar with a registered trademark, the Regulation clearly provides the below three points:

First, setting up the enterprise name dispute handling mechanism (Article 21). Enterprise considers that other business name infringe on the legitimate rights and interests of its enterprise name, it can bring a lawsuit in the people’s court or submit a request to the business registration authority which is responsible for the registration of the allegedly infringing enterprise; business registration authority once accepts the application, can conduct the mediation, in case the mediation fails, the business registration authority shall make an administrative ruling within the prescribed time limit.

Second, stipulating that the enterprise name shall not infringe other’s legitimate rights (Article 23). The use of a business name shall comply with laws and regulations, be honest and in good faith, and shall not infringe upon the legitimate rights and interests of others.

Third, affirming the legal consequences of violation on enterprise names. Article 23.2 provides that “Where a people’s court or business registration authorities lawfully determine that the use of a business name shall be ceased, the business shall, within 30 days as of the date of receipt of the effective legal document issued by the people’s court or the handling decision made by business registration authorities, go through the formalities for registration of change of the business name. Prior to the change of the business name, business registration authorities shall use the unified social credit code in lieu of the business name. In case the business fails to go through the formalities for registration of change within the time limit, business registration authorities shall include it in the list of businesses operating abnormally, and remove it from the list of businesses operating abnormally after the change of registration is completed.”

The Regulations specifies that an enterprise name shall not damage the legitimate rights and interests of others, and stipulates on how to deal with the situation when a people’s court or the business registration authorities recognize that an enterprise name should cease to be used. Under the frame of independent declaration system of enterprise names, the sharing of trademark database and enterprise credit information database might be further solve the conflict between the two; Whilst the sharing of cross-region corporate credit information database may play a positive role on the interim supervision for enterprise registration authorities to protect prior influential enterprise names, and may also improve efficiency and save costs for such enterprises to fight against copycats.