Trademark Oppositions: China vs US - Lexology

2023-03-12 04:31:48 By : Ms. Lily Jiao

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Trademark Oppositions: China vs US - Lexology

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Trademark oppositions are proceedings by which parties can formally request the refusal of another party’s trademark application. They are a feature of the trademark laws of just about every country, including China and the United States. Though trademark oppositions serve the same purpose in both China and the United States, the contexts in which they are used vary considerably.

Once it reviews an application to register a trademark, the China National Intellectual Property Administration (CNIPA) will “publish” the trademark. Then there follows a period during which oppositions can be filed. The length of this period is three months.

A trademark opposition must be based on specific legal grounds, which are specified in Article 33 of the Trademark Law. Certain grounds can only be invoked a “holder of prior rights or an interested party”, while others can be invoked by any party. For example, imagine that an application is filed to register the trademark STARSUCKS, in connection with coffee shop services. Only the Starbucks Corporation could oppose this trademark on the grounds that it is similar to one or more of its registered trademarks. However, any party could oppose the registration of STARSUCKS on the grounds that it is deceptive and may mislead consumers into assuming a connection between this trademark and the real Starbucks.

Once an opposition is filed, CNIPA will consider its merits. It may decide to side with the opposing party and deny registration of the trademark that is being opposed, or it may decide to allow the registration to proceed.

In our experience, trademark applications by foreign brands are rarely opposed (and the most recent China trademark opposition faced by one of our clients by filed by a US company!). This has to do in part with the way CNIPA reviews trademark applications. CNIPA trademark examiners search China’s trademark registry to identify any trademarks that are identical or similar to the one being applied for. Moreover, they take an expansive approach when deciding if two trademarks are similar; when faced with borderline cases, CNIPA examiners will usually find that similarity exists.

As a result, CNIPA preempts most potential oppositions, by nixing most trademark applications that could be of concern to other parties on the grounds that the applied-for trademark is similar to their own trademarks. The flip side of that approach is that CNIPA will often refuse applications for trademarks for being similar to another trademark, when in fact the applied-for trademark is sufficiently different — but that is a matter for another day.

Though foreign brands are rarely on the receiving end of trademark oppositions in China, they regularly avail themselves of opposition proceedings to counter problematic trademark applications. China does not require trademark applicants to use the trademark before it can be registered (as is required in the United States). What is more, under China’s first-to-file system, someone who registers a trademark will have superior rights to the trademark than someone who used the trademark earlier but did not register it.

These characteristics of the Chinese trademark system have made bad-faith trademark applications more attractive to bad-faith actors, such as trademark “squatters” who register trademarks in the hopes that the legitimate owners of the trademarks will pay a ransom for them. The Chinese authorities are increasingly cracking down on trademark squatting, but there are also risks from counterfeiters, competitors, and unscrupulous business partners.

For counterfeiters, registering a trademark means that, legally, their products are not considered fake in China. Meanwhile, brands may be prevented from registering their trademarks by bad-faith competitors that beat them to it. With a trademark registration obtained in bad faith, the competitor could also seek to block the export of products bearing the trademark. Bad-faith trademark registrations can also be used as leverage to prevent brands from looking for other suppliers or marketing partners.

This state of affairs makes it essentially for brand owners in the China market to constantly be on the lookout for bad-faith applications. And if they become aware that a bad-faith application has been filed, the timely filing of a trademark opposition will be the first shot they get at derailing that bad-faith application.

As to the procedure, it is relatively simple. After the opposition is filed, the trademark applicant has 30 days to respond. The parties then have an additional three months to submit additional evidence after their initial filings, which can be a lifesaver for brands that find out about a trademark application they want to oppose in the final days of the opposition period. After the evidence is submitted, there is no need for further action by either party. By law, CNIPA must make a decision within 12 months of the end of the opposition period.

To learn more about China trademark oppositions, check out China Trademark Oppositions: They Work!

The opposition period in the United States is one month, meaning parties have less time than in China to mount an opposition challenge. Time extensions can be requested, which is again a great plus for brands that find out about an application in the waning days of the opposition period.

Bringing a trademark opposition in the United States is far more involved and costlier than in China. In many ways, the process is similar to regular litigation, with both parties required to make numerous submissions. Parties may also engage in discovery.

Fortunately, it is less likely that a brand will want to file an opposition in the United States, as compared to China. For one, a trademark will not be registered by USPTO unless it is in current use, making trademark squatting and other bad-faith practices less effective (if at all effective). Moreover, U.S. trademark law affords superior rights to the party that first uses a trademark, not to the party that first registers it. While it may be a hassle for a party using an unregistered trademark to see off a challenge from a party that attempts to register that same trademark, conceptually the law is on the side of the earlier user.

Meanwhile, as is the case in China, USPTO examiners search the trademark registry to find potentially conflicting trademarks. And like their Chinese counterparts, USPTO examiners tend to be liberal when it comes to determining if likelihood of confusion exists between trademarks. As such, USPTO will generally take care of any trademark application that could raise concerns on the part of a brand with registered trademark rights, obviating the need for trademark oppositions in most cases.

For the reasons described above, brands are far less likely to encounter trademark applications that represent an existential threat that makes a trademark opposition a necessity. Often, trademark oppositions in the United States are filed by large brands that adopt a maximalist approach to brand protection and have the deep pockets for it.

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Trademark Oppositions: China vs US - Lexology

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